Sessional Research Event: Expert judgement, London

Solvency II is a key driver of change within the prudential regulation of insurers - the difficulties around developing appropriate and proportionate practical solutions to the various challenges this regime change presents are well known, and common approaches/themes have emerged within the industry for several of the key problem areas. One area within the industry over which there appears little consensus is on the approach to expert judgement

This paper/presentation aims to provide some clarity of thinking on expert judgement and practical suggestions on how companies could tackle this difficult concept. Key to ensuring expert judgement is managed appropriately within the business is ensuring a robust, clear and consistent approach to decision making is in place. This should involve embedding an expert judgement framework, including the creation of an expert judgement policy, governance structure, standards, expert judgement process and validation structures. In this paper/presentation we focus on the areas we believe are the most challenging – process and validation.

The session will set out the key elements of an expert judgement framework, propose a structure for an expert judgement process (including introducing some additional concepts to help facilitate an understanding of the materiality/uncertainty associated with any judgement) and also put forward possible approaches to independent validation of expert judgements to ensure that the robustness of these decisions can be evidenced in line with the expectations of the wider Solvency II regulations.

This session is aimed at members of the IFoA working in the insurance sector, particularly those involved in Solvency II, Governance/oversight roles, assumption Setting or model development. Given the wider potential application of the expert judgement framework, non-actuaries or those working in other fields are welcome to attend.