General Insurance Convention 1982
Stratford, 1982
Actuarial reporting on non-life solvency. - General Insurance Study Group. 11 pages.
At its 1981 Dublin seminar, GIRO members had the opportunity to discuss the subject of the solvency of non-life insurance companies and the work produced by three working parties: one looking at the underwriting and claim risks, another at investment and currency risks and the third with the remaining miscellaneous risks, mainly reinsurance. Following this meeting the GIRO committee members, plus the chairmen of the three working parties have met on a number of occasions with the objective of bringing together the threads of these papers, and the comments made at Dublin, into a single document for discussion at the 1982 Stratford seminar.
It is only fair to report that there was found to be some difficulty with this objective. The problem arose from the vastness of the subject and from deciding to which of the many questions the working group's report should be addressed. In the end, it was decided to report back to GIRO with a short paper on the involvement of a UK actuary in reporting to company management on the adequacy of an insurer's capital resources. It should be noted that this is a substantially different topic from that of advising on what the statutory regulations should be.
Analysis of bonus systems in motor insurance. - Christensen, Jens Erik. 32 pages.
A continuous time Markov Chain model is proposed for the analysis of bonus systems in motor insurance which as a particular merit takes explicitly into account the effect of cancellation of policies. Most analysis of bonus systems treat these as "closed" systems while in reality they are very "open" systems with a considerable change of the portfolio within one year. Relating to Danish experiences there is a yearly number of cancellations (excluding lapses i.e. failure to renew) corresponding to 15-20% of the portfolios and a level of new business of approximately the same size making the real changes of the portfolios rather small.
General insurance expenses. - General Insurance Study Group. 24 pages.
The overall cost in expense terms of running an insurance operation is the total of the amount of management expenses incurred and of the commission paid to intermediaries. The commission offered by an insurance company in respect of a particular type of business is normally expressed as a fixed percentage of the charged (written) premium. It is straightforward to analyse commission by type of business and to forecast commission for an assumed future portfolio of business. This monograph is mainly concerned with management expenses exclusive of commission.
A note on the theory and practise of multiplicative rate making. - Ajne, Bjorn. 34 pages.
On solvency and risk models. - Pentikainen, Teivo; Rantala, Jukka. 14 pages.
A comprehensive research project was recently completed in Finland concerning the solvency conditions of insurers in general, and some related problems such as the dimensioning of the fluctuation buffer (equalization reserve) in particular. Empirical data and experience were collected and the risks jeopardizing insurers were analysed making use of a specially constructed model. The resulting research report comprising two volumes is now published in an English-language version and will be offered as a discussion contribution to the colloquium subject: the generalised risk models. In this paper some of the background factors concerning modelling and its applications will be discussed making references to detailed considerations in the report.
The solvency report (briefly SR) will be frequently referred to in the following text giving the volume (I or II) and chapter, section, subsection, and item e.g. I.2 or II.3.1 or II.3.1.14.1. References to pertinent books and publications indicate the reference lists at the end of both volumes.
Premium rating for personal lines coverages in the United States. - Grady, David J. 63 pages.
The United States has a population of over 230,000,000 living in nearly 100,000,000 homes and owning approximately 150,000,000 motor vehicles. The Property and Liability exposures of this population are covered by nearly 3,000 insurance companies (Life, Accident and Health coverages are provided by less than 2,000 companies), and Property-Liability premiums are approaching the $100,000,000,000 mark. Consequently, by pooling their resources the insurance industry of the United States has access to the largest bank of data on relatively homogeneous risks in the world.
The difficulty with having a large amount of reasonably homogeneous data readily available is that forces operate to tear off pieces which are even more homogeneous. For example, Massachusetts drivers are perceived to be distinctly different from Connecticut drivers by the respective state legislators, regulators, and the drivers themselves. By extension, fifty separate states leads to fifty separate regulators supervising fifty slightly different insurance programs developed by fifty separate legislatures. Certain insurance companies perceive the possibility of "skimming the cream" off the automobile insurance marketplace and, rather than share their secret formulas for detecting superior risks with their competitors, drop out of the information pool. Young male drivers owning sports cars in Boston are shunned by all insurance companies and forced into state operated assigned risk pools. What remains after all the chunks and bits and pieces have been torn off is still the largest bank of data on relatively homogeneous risks in the world.
Statutory regulation of short term business. - Abbott, William M. 29 pages.
This monograph is concerned with the statutory regulation of short-term business. It covers regulatory aspects affecting the contract of insurance and regulation of the insurer. It does not cover tax legislation.
With its lack of codification, the development of statutory regulation in the UK has been one of reaction to adverse events or to threats of adverse events. As a result the current legislation may be criticised as being somewhat haphazard and with a certain lack of cohesion. The bulk of the legislation has been directed towards the protection of the consumer.