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The Actuary The magazine of the Institute & Faculty of Actuaries

General Insurance (GI) Board news

GIRO 2005 Blackpool

It was good to see so many of you at this year’s GIRO convention, both in various sessions and socially. What Tony Jones said in his GRIT presentation about reserving equally applies to the whole practice area of general insurance (GI): ‘It is exciting and interesting – it is the place to be.’

It may sound clichéd, but the convention really does go from strength to strength. The numbers attending this year were at an all time high of 420. For the first time ever we were in the difficult position of having to turn people away. There were also a record number of workshops.

Elsewhere in this issue, title="Opens in a new window" target="_blank">Kate Angell’s report sets out the highlights of the convention.

As I mentioned in the recent GIB Mail (www.actuaries.org.uk/Display_Page.cgi?url=/general_insurance/gibmail.html), while I am delighted by the success of GIRO 2005, I am also aware that increasing numbers of GI actuaries are, for one reason or another, unable to attend our annual convention, and that there are limited alternative sources of CPD available to them. Properly undertaken and regular CPD is important, and so expanding the number and range of GI-related CPD opportunities is something that the GI Board will seek to address over the coming months.

The GI research programme is flourishing with a good number of working parties established at GIRO 2005 – the challenge for them will be to ensure that this momentum is maintained, particularly during the coming winter months which I know are an extremely busy time for many GI actuaries. We were fortunate to have a good number of Casualty Actuarial Society (CAS) actuaries at GIRO this year and I am particularly keen that our collaboration with CAS should continue. Research is an obvious area for us to further co-operate to mutual benefit. This was also highlighted during Amy Bouska’s recent visit to the GI Board meeting in November.

Amy is the vice-president of CAS with responsibility for international Affairs, and she emphasised how much we could each benefit from working with one another. The dates for next year’s convention have been changed to 26–29 September 2006.

Finally on the subject of GIRO 2005, there were a number of very important issues aired in Blackpool which will have a significant impact on the future of our profession and on the way that we all do business. These have been widely aired by the presidents and Caroline Instance (chief executive), but I make no apology for mentioning them here as well.

The introduction of the BAS – Board for Actuarial Standards

Michael Pomery’s address at GIRO made clear the extent of the changes to come with regard to the recommendations from Sir Derek Morris, in particular the establishment of the Board for Actuarial Standards (BAS). Michael also highlighted the strategy review of the profession (details of which are prominently displayed on the website). Do please read this and send in your comments and use the bulletin board set up for this purpose. This is your chance to influence the shape of your profession – please do not let this opportunity pass you by.

In April 2006 the BAS takes over all responsibility for the setting of actuarial technical standards. From reactions at GIRO, both the immediacy and the potential impact of this change have come as a surprise to many.

As most of you should know, Eamonn McMurrough and his team have been working on revisions to GNs 12, 20, and 33 and the proposed new guidance note (GN) on principles and practice (which goes under the working title GNPP). We would like to take advantage of all the hard work put in by Eamonn and his team to get these agreed and in place by 1 April 2006, to ensure that we hand over a fully up-to-date set of professional guidance, for the benefit of both the BAS and our members. The revised drafts were outlined in Blackpool during the working party’s plenary session and at Henry Johnson’s workshop on Lloyd’s issues. They are now ready to go through the profession’s approvals process and, subject to the revised guidance notes being approved by the Faculty and Institute Management Committee (FIMC) on 12 December, the two-month exposure period will commence then. Please note that, despite what was said at GIRO, the revised GN12 will not be in place by mid-February 2006. Indeed, even if any of these revised GNs do come into force by 1 April 2006, it is not the intention that they apply to normal year-end 2005 work.

A common theme at GIRO was the need to be better at measuring, managing, and reporting on uncertainty. This is reflected in the changes proposed for GN12, which is more explicit on the need to consider uncertainty. The change to ‘practice standard’ will promote a higher standard of consistency.

Most of the proposed changes to GNs 20 and 33 are structural, moving paragraphs around under different headings. There have been some changes to reflect changes in the Lloyd’s Valuation of Liability Rules, mainly related to one-year accounting.

Date for your diaries:

A consultation meeting to discuss the proposedrevisions to the guidance notes has provisionally been arranged at Staple Inn on Wednesday 18 January 2006 at 4pm. Please take the opportunity of sending in your comments either by email, in writing, or in person at the consultation meeting.

General insurance Reserving Issues Taskforce (GRIT)

GRIT, under Tony Jones’s chairmanship, has worked extremely hard and produced an excellent, comprehensive paper, which can be found at:www.actuaries.org.uk/Display_Page.cgi?url=/general_insurance/grit_consultation.html

If there are any general insurance actuaries who have not yet read the report, I strongly recommend that you do so now (if you can’t face it all then please at least read the 20-odd page summary at the beginning, but there is much of value throughout the entire paper and it is a commendably easy, and very rewarding, read). The report makes about 20 recommendations, covering all facets of general insurance reserving, including communication skills, behavioural awareness, and the education and CPD of GI actuaries. One of my priorities is to drive forward the implementation of the GRIT recommendations, subject to review of the comments emerging from the consultation meetings.

General insurance Rating Issues working Party (GRIP)

Following close on the heels of GRIT is GRIP (the acronym clearly came first!). This research is intended to do for actuarial involvement in premium rating what GRIT has done for actuarial involvement in reserving. Duncan Anderson is leading this and offers his thanks to those who contributed their initial views at his plenary and workshop sessions at GIRO. This has been an invaluable source of information in the setting of the working party’s terms of reference to ensure that they deliver what is required, and will ensure that they focus on the key issues which members of the profession will be able to influence.

The board and its committees

The board and committees are essential to the future of the GI practice area. We rely heavily on the hard work and generosity of time given by the volunteers. It is this which gives credibility to our work within the profession and for our members. GI is still an expanding area of the profession with many areas of research and development still to be explored. If you – whatever your experience or seniority – would like to play your part and help your profession either through joining a working party or helping one of the committees, please contact either me or the board secretary, Peter Stirling, email peter.stirling@actuaries.org.uk.