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The Actuary The magazine of the Institute & Faculty of Actuaries

GIRO: The Italian Job meets Easy Rider

This year the 35th annual General Insurance Research Organising (GIRO) Convention was set for another European adventure following a year off in Newport. The GIRO Convention is the premier conference in the general insurance actuary’s calendar and the 2008 conference reached another record attendance with over 550 delegates. Flocks of general insurance actuaries took flight bound for Sorrento, Italy in the hope of sun and even some CPD. There were even rumours that a merry band of ZZ Top look-alikes made their way to Southern Italy on their Harleys. If you know of their safe return, please write to the editor at the usual address.


To read Roger Massey’s review on two wheels and Henry Johnson’s GIRO biker diary, click

The convention started off with the now traditional fresher’s ball... sorry, the newcomers’ drinks reception. This is an opportunity for ‘newbies’ to meet fellow first-timers and extend their network within the general insurance (GI) community. The remainder of the first evening offered a buffet dinner and a chance for the more mature amongst us to catch up with some familiar faces.

Bigger and better
What really sets GIRO apart from the other pretenders is the richness and diversity of its sessions. This year was no exception with seven plenary sessions and over 60 workshops held across five concurrent sessions, all packed into a two-and-a-half day programme. Darren Michaels, GIRO Committee chair, opened up with a welcome address, pointing out that the 2008 convention was the furthest ever held from the UK. A full 1,291 miles from London and 40% further than Vienna in second place. Harold Clarke paid tribute to David Craighead, who sadly passed away earlier this year at the age of 89. David was a pioneer in developing a role for actuaries within general insurance and was instrumental in founding the London Market Actuaries Group in the 1980s.

The first plenary was tailored towards international perspectives. The first guest speaker, Nino Savelli from the Catholic University of Milan, highlighted the challenges faced by actuaries in the Italian motor market. He was followed by Satnam Bhooee who gave a light-hearted account of working in India and by David Campbell, who having worked in China for the best part of the last eight years, provided an informative insight into the Chinese insurance market and the need for a major flood in Shanghai! Following the opening plenary, delegates were ushered to the first instalment of concurrent workshops where they were able to choose from a wide choice of subject matter ranging from the General Insurance Reserving Oversight Committee (GI ROC) Reserve Uncertainty Working Party to opportunities and issues in the Middle East.

Flooded by Solvency II
After a break for coffee to nurse any hangovers, the second plenary was underway. Introduced by Neil Hilary as “the disaster session”, Julian Lowe and Jill Boulton of JBA Consulting, reported on the findings of the UK Floods Working Party. They gave a stern warning that if actuaries and insurers don’t take action to increase premiums, then the Government will not have any incentive to act. We were then provided with a perspective of European floods, by Dr Wolfgang Kron of Munich Re. Wolfgang demonstrated a programme that includes a catalogue of all major catastrophes back to the devastating eruption of Mount Vesuvius and the destruction of Pompeii in 79AD. The irony of a GIRO Convention organised in sight of an active volcano was not lost on everyone. The reminder certainly prompted a few anxious looks at breakfast the next morning, with the beautiful view over the Bay of Naples to Vesuvius.

Lunch was another opportunity to catch up with old friends and browse the GIRO Exhibition. The exhibition included a wide range of challenging CPD-related activities from Scalextric to Wii golf. Others took the break to enjoy their lunch whilst soaking up some late summer rays in the Mediterranean sun.

The third plenary focused on what has become a mainstay of recent GIRO conventions... Solvency II. Kathryn Morgan, from the FSA, gave a Solvency II update that included an announcement about the FSA’s discussion paper on Insurance Risk Management: ’The Path to Solvency II’ to be published the next day. Kathryn was obviously a crowd favourite as she received two rounds of applause as she rushed off to the airport to attend the Groupe Consultatif meeting in Zurich. Tom Woolgrove, managing director of HBOS General Insurance, closed the plenary with a business perspective and challenged us to be the business partners, teachers and guides in the new Solvency II world. Following the developments at HBOS in the preceding weeks, Tom appeared to enjoy standing up in front of an auditorium of general insurance actuaries. In the evening, delegates were treated to the “Sorrento experience” as they were finally allowed out of the hotels to enjoy the local delicacies.

Three waiters and a sub-prime crisis
On Thursday morning, there were two sessions of concurrent workshops, with subject matter including: ’We have lift off – from actuary to leader’; ’The opportunities and hazards of being a lone actuary’; ’London market pricing in the soft market’; and ’Reserving risk – making the invisible visible’.

Sandwiched between the workshop sessions was for me this year’s most topical plenary, an insight into the thinking and work of the Securitisation and Sub-Prime Working Parties. Graham Fulcher gave a witty account of the history of the markets and how share price bubbles and market crashes are reoccurring events. Peter Yeates explained how the sub-prime crisis occurred and how it resulted in the collapse of Freddie Mac and Fannie Mae. Alex Marcuson rounded off the plenary with a presentation that had been subject to many re-writes over recent days in light of the current market developments. He warned that the sub-prime crisis may only be the tip of the iceberg with potentially enormous economic costs.

The afternoon plenary incorporated an assortment of topics. Steven Fisher reported on the preliminary findings of the Effectiveness of Reserving Methods Working Party after its first year, a GI ROC workstream. Unfortunately, conclusions from the exercise were limited due to the challenge of analysing the overwhelming number of 44,000 actuarial estimates in a very short space of time. We wait in anticipation for their full findings - watch this space! Julian Leigh gave an update on the new incarnation of the GI Board – GI Practice Executive Committee (GI PEC). It was a presentation of acronyms, and even Julian was at a loss as to what some of them stood for. Julian was followed by Derek Newton, who, after proclaiming his session as “important but boring”, explained in colourful detail the principles of the Actuaries’ Code to be launched next year.

At the end of the second day, delegates were given the opportunity both to suggest and sign up to future working parties for next year’s GIRO Convention. After a quick change into black tie, everyone took their seats for the traditional convention dinner. Food and wine was interspersed with singing from the aptly named Three Waiters, a tribute act to the Three Tenors. Mike Brockman was awarded the 2008 GIRO Lifetime Achievement Award; a worthy winner after many years challenging actuarial thinking and pushing our profession forwards.

Pricing to prizes
Friday, the morning after the night before, saw this year’s final plenary sessions. Duncan Anderson (with what seemed like boundless energy for 9am and talking almost at lightning speed) asked us not to forget the humble claims model and that it should deserve increased focus for general insurance pricing in an aggregator-dominated marketplace. Simon Sheaf gave us his perspective on commercial lines pricing and ten easy steps to gain the trust of your underwriters. Camilla Bennett and members of the Free Market Working Party reported back to delegates in a well choreographed role-play on the effects of opening up insurance markets to free pricing.

The customary presidential address was shelved as Nigel Masters remained grounded in the UK following issues with air traffic control. Luckily for us, Julian Leigh admirably stepped up to the mark and after exclaiming that, “Your profession needs you!” he presented the Finlaison Medal to Dr Greg Taylor. To complete the prizegiving, the Brian Hey Prize was awarded to the members of the working party, chaired by Jean Bernard Crozet that produced the paper entitled ‘Integrating Pricing & Capital Modelling’. The final slot was bestowed to guest speaker Professor Eddie Obeng of Pinnacle, the world’s first virtual business school. He certainly woke us up before our flights home with an energetic hour on the exponential rate of change we are seeing in the world and how we can deal with it.

As GIRO 2008 drew to a close, some headed straight for the airport, while others stayed to enjoy the cultural delights and natural wonders of the area including Capri, the Amalfi Coast, Pompeii and Mount Vesuvius. Thanks to all those on the GIRO Committee and those who contributed to another record breaking and successful conference. The UK has a lot to live up to when GIRO 2009 heads to Edinburgh. Slides from this year’s workshops and details of the new working parties should now be available on the Profession’s website. Ci vediamo l’anno prossimo!


To read Roger Massey’s review on two wheels and Henry Johnson’s GIRO biker diary, click