General insurance actuaries attending the London Market Student Groups first programme event of the year found themselves challenged to rethink their views on actuarial modelling.
Phil Ellis, a partner at Lane Clark and Peacock (LCP), pictured right, kicked off his presentation at the networking event on 1 March by asserting: 'Much actuarial modelling, and in particular reserving, is not as good as it should be'.
Ellis went on to say that GI actuaries should be wary of blindly turning to the basic Chain Ladder and Bornhuetter-Ferguson methods without considering that different tools may bring better perspectives. He went on to suggest that more attention should also be paid to actuarial judgement.
Rob Murray, also an LCP partner, then deconstructed the claims process into components which were then reassembled into a cohesive model. The technique benefits from being usable with little or no past data, though of course additional data improves the model's accuracy, according to Murray.
The London Market Student Group organises events for senior figures in the general insurance industry to present directly to the next generation of actuaries to improve their knowledge of the London Market and give them the opportunity to hear from and challenge the senior figures in a relaxed environment.
LMSG events normally include a presentation by a guest speaker followed by the opportunity to socialise and network with actuarial students (and newly-qualified actuaries) working in general insurance. The location is usually a bar in the City where complimentary drinks are commonly provided by the firm of the speaker.
LMSG's next event is expected to take place at the beginning of June. If you would like to learn more, be added to the mailing list or are interested in speaking at or sponsoring an LMSG event, please contact chairperson [email protected].