Commercial Fire Underwriting Working Party report
The working party feel that the level of knowledge of commercial fire insurance is relatively low within GISG. This may be a relevant factor contributing to the recent decline in numbers of specialist general insurance actuaries within the larger composite companies. Actuaries may have entered the arena with some worthwhile ideas on reserving, statistical analysis and motor rating. However, while their ideas in these areas have been refined over the years, they have never made the important transition into the centre of the general insurance stage within the direct writing companies. This would involve contributing ideas within the commercial insurance field and considerable contact with underwriters. The members of the working party feel that actuaries have a lot to offer in this area. Others may agree when they see the wide diversity of thinking between actuaries and underwriters that is portrayed in the paper. In many ways this is a "chicken and egg" situation. Actuaries cannot be helpful to commercial underwriters until they are involved in and understand the business; yet they are unlikely to be involved in the business unless they can be helpful to underwriters. It is hoped that this paper will be a start in helping to break the vicious circle. With the above thoughts in mind the working party has produced this basic educational paper on commercial fire underwriting - a class of business which covers any property except domestic dwellings. Such business produces nearly £1 billion worth of premium in the UK alone. Although the paper does give background information, particular emphasis is given to areas where actuarial ideas could be most profitably employed. These could perhaps be developed in later papers. Similar work could also be usefully done in other areas of commercial insurance business.