ICAT workstreams overseen by the Risk Management board

Effectiveness of ERM frameworks

Code: Risk1

Lead: Jasvir Grewal

Detail:

• How well have the existing ERM frameworks coped with the pandemic? Did they operate as expected?
• What can we learn from the experience of Covid-19 with a view to improving ERM frameworks?
• Were all implications of the pandemic (financial and operational) sufficiently covered by the framework?
• Were roles and responsibilities sufficiently clear?
• Were processes circumvented and if so, was there appropriate governance?
• In general terms, was the ORSA, including prior scenario testing and business continuity planning helpful in managing through the crisis?
• Is there any information in the soon-to-be-published SFCRs that might help with the research?
• Are there new risks that need to be incorporated into the ERM framework?

Outputs: pending

Great Risk Transfer

Code: Risk2

Lead: Peter Telford

Detail: What impact will the pandemic have on the Great Risk Transfer? Will it accelerate the transfer of risk to individuals or will it highlight the need for a return to more pooling and centralisation of risk, away from individuals? Is there a need for a pandemic equivalent of Flood Re, for example? Are there any generational issues, with some losing out relative to others, as a result of decisions taken in respect of Covid-19? It’s likely that the impacts on the Great Risk Transfer will emerge over the coming months (and maybe longer) so there is value in the volunteers tracking developments.

(The "Great Risk Transfer" is an IFoA initiative for 2020 looking at the consequences of the transfer of financial risks from government, financial services providers and employers onto individuals)

Outputs: pending

Scenario Modelling

Code: Risk3

Lead: Maryam Abdullah

Detail: 

• What scenarios have companies been modelling during the pandemic?
• How will this impact the suite of scenarios that are modelled going forward?
• The research should look across Life, Pensions & GI areas
• It should also consider and capture broader issues, such as societal impacts, the effect of changing government policy etc, to be as comprehensive as possible.

Outputs:

• Covid-19 and Future Pandemic Scenario Modelling for Property and Casualty (P&C) Insurers and Reinsurers
  In this report, we explore the various lines exposures to Covid-19 and we look at the potential P&C market changes caused by it. We also attempt to define processes for P&C pandemic scenario modelling and exposure management.
   
• Pandemic impact on the insurance and pension industry
  The paper, authored by John Dalmaris, Ashley Campbell, Aparna Batra and Naman Jain as part of the IFoA Covid-19 Action Taskforce, summarises the impact of the recent pandemic caused by Covid-19 in the insurance and pension industry with respect to key demographic, economic, underwriting and operational components.
   
• General Insurance Pandemic Scenario Modelling: Constructing a Simplified Exposure-Based Realistic Disaster Scenario (RDS)
  This paper provides a framework for general insurers to begin constructing pandemic scenarios in their planning and risk management work.
   
• Forecasting Disease Spread: A Review of Some of the Available Methods Including References
  Presentation by Ashley Campbell, March 2021
   
• Introduction to Reproductive Number (R) & Its Calculation
  Presentation by Haedeh Nazari, March 2021
   
• Factors Impacting Covid-19 Outcomes by Country & Relevant Data references for Actuaries to Use in Scenario Modelling
  Paper by Aparna Batra & Maryam Abdullah FIA, March 2021
   
• Scenario Modelling of Covid-19
  Covid-19 along with the subsequent volatility in market conditions have undeniably been affecting insurers around the world. Sometimes events are very difficult to predict and past trends are not always a good guide to the future. For example, although investigations of historical pandemics provide an insight into possible future scenarios, a simple extrapolation of can be highly misleading. This paper by Darshan Purmessur and Haedeh Nazari gives guidance on stress testing and scenario analysis and aims to offer a perspective on the forecast of some key classes of business for general insurers. This would allow the analysis of the impact of severe events or sequence of events on the financial state of short-term insurers.

• Covid-19 Scenario Modelling: Healthcare Sector Scenarios 
  This paper presents some of the parameters that can be used for pandemic scenarios. However, modelling might require time-dependent variables for some of the scenarios. This paper proposes 5 possible stress scenarios using the following parameters. By Ritu Kotnala, June 2021.

• Mauritius non-life industry 2020 analysis 
  This article analyses the impact of Covid-19 on the Mauritius non-life industry. An analysis of the environment of Mauritius is first presented followed by a high-level analysis of the industry results and finally looking at other key considerations for insurers over the next years. By Darshan Purmessur, November 2021.

Cyber security

Code: Risk4

Lead: Hazel McNeilage

Detail: 

• What cyber-related issues have arisen as a result of the pandemic?
• How much of this was predictable and were companies adequately prepared?
• What needs to be improved going forward?

Note that this idea does not include the impact on cyber insurance, which the RM Board believes is best captured through the GI practice area.

Outputs: pending

Blue Sky Thinking – What does a transformed post-Covid-19 society look like?

Code: Risk6

Lead: Geoff Chaplin

Detail: A think tank research activity to think through what the “new normal” might look like and hence some of the possible broader implications of Covid-19. For example, what is the impact of people more routinely working from home? Are there broader lessons that can be learned and on which the IFoA can contribute?  This might lend itself well to link in with the IFoA’s Wider Fields activities.

Outputs: pending