General Insurance Convention 1984
Bournemouth, 1984
Considerations in evaluating reinsurance security. - Hart, David M. 1 page.In world markets, very great sums are expended on the purchase of reinsurance protections which, like many general insurance contracts, promise the reimbursement of certain future payments if they are incurred. The ceding company obviously needs to have some confidence that the reinsurer will be in a position to meet this obligation, or the cedant would be advised to retain the business for his own account - at least he would then be in the position of having some additional premium to assist in meeting the additional retained liability. Otherwise, in the event of the failure of the reinsurer, the liability will revert to the cedant although the reinsurance premium has already been paid away.As a consequence of such thoughts, quite an industry has developed in monitoring reinsurance security, which has recently been a very 'hot' topic, given the vast number of reinsurers participating in the market, often at cut-throat rates.
The contribution approach in practice. - Allen, Mark. 1 page.The expression of profitability by policy class in contribution format rather than using traditional "underwriting profit" methods has considerable advantages, namely:1) Investment income (on technical reserves) is included on an explicit basis making results on long-tail classes much easier to interpret.2) Overall expenses include a large proportion of costs which are not strictly allocatable between the various policy classes. The contribution method does not incorporate an arbitrary and often grossly misleading split of these costs between classes.
Draft Guidance Notes: Actuarial reporting in general insurance. - Abbott, William M. 10 pages.The Institute have issued guidance notes and official "exposure drafts" on a number of topics. None of these specifically relate to general insurance, although those on professional conduct and practice and legal liability are not irrelevant.There is a perceived need to fill that gap. However, the absence of a statutory or traditional role imbues a certain lack of clarity in the ground to be covered by any such guidance notes. The attached draft, which has no status other than as a discussion document for the Bournemouth seminar, could be regarded as the first of a series of guidance notes related to general insurance.The present aim is to prepare a second draft of the discussion document following the discussion at Bournemouth and any other contributions. It could then be presented to the General Insurance Committee of the Institute for further consideration not only on its content but for the need for such guidance notes.
The education and training of actuaries. - Brimblecombe, Roy E; Macharg, John M. 4 pages.In November 1982 the Joint Education Committee of the Institute and the Faculty established an ad hoc committee to review the structure for the education and training of actuaries. That Committee (known as the Review Committee) has now reported and the Joint Education Committee has forwarded the Report to the two Councils. The Councils consider that the Report raises such fundamental issues that it should be exposed within the profession as a consultative document before final decisions on some of its recommendations are taken by each Council.
Extended warranty. - Christofides, Stavros. 1 page.Extended Warranty insurance on home appliances was first introduced to the British market in early 1981 and is now estimated to be generating premiums of about £100m per annum.The insurance covers the cost of repairs or replacement of parts in the event of mechanical or electrical breakdown due to faulty workmanship or materials in manufacture, extending the manufacturers usual one year guarantee for a further four years.It has proved a popular cover for consumers despite early problems with the demise of the Cavalier and the collapse of Multiguarantee. Most retailers of electrical goods now offer warranty insurance to their customers and, apart from commission income, this usually ensures that future repairs will be directed to their servicing arms.
General insurance investment principles. - Thomson, Andrew K; Hodkinson, Philip A. 8 pages.Below are what we perceive as being four basic investment principles. In the following sections, we discuss why they are important, how they may be achieved and problems that may be encountered.1) To maximise net rate of return.2) To maximise investment security.3) To meet the liabilities.4) To meet legislative requirements.In setting out and commenting on these principles, we do not consider it essential to draw a distinction between capital and income.
Provision for bad debt in credit risk. - Sanders, David E A. 1 page.This method is being used to assess the bad debt provision for companies in their Companies Act Accounts. It has implications in respect of insurance business:1) which insures bad debt; and2) in respect of its own bad debts.The conditions when the method has been used are where there is a large volume of data, and the analysis of claims is relatively stable. Repayment of part of the debt is made monthly.Basic initial analysis is undertaken on various average debt amounts. These are subdivided into arrears categories. It must be remembered that unlike a delay pattern a person can go from arrears 3 to arrears 1 by partial payment of debt.A model is then developed using transition probabilities, which represents the probability of going from arrears case X to arrears Case Y.This model is then used to simulate the provision requirements.
Some notes on the London market. - Coutts, Stewart M; Craighead, David H; Duncan, Frederick; Einck, N; Green, Peter A G; Hart, David M; Hunter, Ray J; Lyons, Graham E; Matthews, Peter N; Mathers, S; Ryan, John P; Schreiber, S; Sutton, J. 36 pages.The three papers that follow cover some aspects of reinsurance business written in the London Market. They are not meant to depict the main or even the most important features. They are simply samples that have been produced by a group of actuaries working actively in that field.
Valuation of long term claims in a stable environment. - Sanders, David E A. 1 page.The method described below makes the following implicit assumptions:1) The question of claims is known reasonably accurately (or can be simulated) and is relatively stable.2) The assets held in respect of such claims are separately identifiable and segregated.
No paper is available for the following Working Party:
- Reporting standards for general insurance companies. - Cooper, Susan M; Daykin, Chris D; Devitt, E R F; Levy, G; Ward, G N C; Wilkinson, Richard C.
If anyone can supply a copy of this paper we will add it to the site.