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Current CAS Initiatives

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Current CAS Initiatives. Robert F. Wolf, FCAS, MAAA. CAS Board of Directors ... March 13-14, Salt Lake City. Image of the Actuary Campaign. Profession-wide campaign. ... – PowerPoint PPT presentation

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Title: Current CAS Initiatives


1
Current CAS Initiatives
Robert F. Wolf, FCAS, MAAA CAS Board of
Directors Casualty Actuaries of the Southeast
(CASE) Fall 2005 Meeting, October 10,
2005 Ritz-Carlton Hotel at BuckheadAtlanta,
GAMonday, October 10, 2005
2
Agenda
  • CAS Centennial Goal
  • ERM Initiatives
  • Research Working Parties
  • Other Topics
  • Task Force on Actuarial Credibility
  • Task Force on Publications
  • Basic Education Initiatives
  • Continuing Education
  • Image of the Actuary Campaign
  • Your Input

3
CAS Centennial Goal
  • The CAS will be globally recognized as the
    preeminent resource in educating casualty
    actuaries and conducting research in casualty
    actuarial science. CAS members will be
    recognized as the leading experts in the
    evaluation of hazard risk and the integration of
    hazard risk with strategic, financial and
    operational risk.

4
Implementing the Centennial Goal
  • Centennial Goal Implementation Task Force
  • Subcommittee of Long Range Planning Committee
  • Working with Vice Presidents and Committee Chairs
    in setting goals.
  • How does my committee and its goals support the
    Centennial Goal?
  • SAM Goals
  • Significant, Attainable, Measurable
  • Interim milestones to help gauge progress towards
    the Centennial Goal.

5
ERM Initiatives
  • During its March 2005 meeting, the CAS Board took
    actions to help the actuarial profession benefit
    from new opportunities in Enterprise Risk
    Management (ERM)
  • Approved Joint CAS/SOA Risk Management Section.
  • Launched partnership with Enterprise Risk
    Management Institute International, Ltd. (ERMII).
  • Created new Vice President-Risk Integration
    position to oversee ERM-related activities.

6
Risk Management Section
  • Similar to the existing CAS special interest
    sections CARe and AIR.
  • Both CAS and SOA members are eligible to serve on
    the Council that guides the activities of the
    Section.
  • Members are encouraged to join the Section.
    Annual dues are only 20.
  • Look for the check box on the CAS dues notice in
    October.

7
Other ERM Initiatives
  • ERMII is a private, not-for-profit, independent
    educational and research organization led by CAS
    Fellow Shaun Wang.
  • ERMII is co-sponsored by an international group
    of universities and professional organizations
    including Georgia State University, University of
    New South Wales, University of Illinois, Wuhan
    University (China), and the CAS.
  • VP-Risk Integration to oversee and coordinate
    ERM-related activities.

8
CAS Strategies
  • Take the Lead More vigorous effort
  • Expansion of Research
  • Publications
  • Public Relations
  • A Though (Idea)-
  • Develop Global Journal of ERM
  • Joint Sponsorship with ERMII
  • Outreach to all Professions
  • Research Topics, such as Operational Risk

9
CAS ERM Definition
  • The discipline by which an organization in any
    industry assesses, controls, exploits, finances
    and monitors risk from all sources for the
    purpose of increasing the organizations short-
    and long-term value to its stakeholders
  • Key elements
  • Dual nature of risk
  • Value creation

10
CAS ERM Conceptual Framework Two Dimensions
11
Actuarial Techniques in the Broader ERM World
  • Credit Risk
  • One of the established methods is called the
    actuarial method
  • of borrowers by rating category exposure
  • Default rate by rating category frequency
  • Defaults claim count
  • Loss given default severity
  • Operational Risk
  • Basically an internal actuarial study of
    loss-generating events
  • State-of-the-art is basically re-created Basics
    of Actuarial Analysis
  • Dr. Ali Samad-Khans presentation from the 2004
    ERM Symposium
  • www.casact.org/coneduc/erm/2004/handouts/samad-kha
    n.pdf

12
Modeling Workshop
  • Education in risk integration techniques is
    consistent with Centennial Goal.
  • DFA added to Syllabus in 2000.
  • DFA taken off Exam 8 in 2003 due to inability to
    test in a paper-and-pencil environment.
  • Modeling Workshop Task Force established.
  • Piloting a hands-on workshop experience, with the
    final pilot conducted with new Fellows in May
    2005.
  • Consider adding this as a future FCAS requirement
    and/or continuing education opportunity.

13
FCAS Education
  • Task force established in late 2004 to recommend
    Learning Objectives for what it means to be an
    FCAS in the year 2014.
  • Considerations
  • Perhaps reducing total number of exams by one
    (i.e., 8 exams plus VEE).
  • include a mandatory workshop (e.g., DFA Modeling
    Workshop).
  • Final Recommendations due to CAS Board in
    November 2005.

14
Research Working Parties
  • 2003-04
  • Correlations and Dependencies Among All Risk
    Sources
  • Executive-Level Decision-Making Using Dynamic
    Risk Modeling
  • Elicitation and Elucidation of Risk Preferences
  • Quantifying Variability in Reserves Estimates

15
Research Working Parties
  • 2004-05
  • Dynamic Risk Modeling Handbook
  • Public-Access DFA Model
  • Bornhuetter-Ferguson - Initial Expected Losses
  • Tail Factors
  • Risk Transfer Testing

16
Bottom Line
  • Actuaries are the top candidates for ERM
    leadership in insurance and pensions
  • We need to stop thinking protectionist and
    embrace expansion fearlessly and confidently
  • Lets lead, not follow
  • Actuaries must reframe traditional roles as part
    of the larger ERM context

17
Other Topics of Interest
  • Your Inputs are Welcome

18
Task Force on Actuarial Credibility
  • Established to identify, prioritize, and
    investigate the feasibility of possible
    strategies for enhancing the perceived
    credibility of the actuarial profession and to
    develop action plans for implementation of those
    strategies considered to have the greatest
    potential for high impact.

19
Task Force on Actuarial Credibility
  • Enhance the transparency of the actuarys
    conclusions by clearly identifying differences
    between managements best estimate and the
    actuarys best estimate.
  • Enhance the publics understanding of actuarial
    estimates.
  • Improve the transparency of disclosures by
    requiring that the actuarial report contain an
    exhibit that summarizes changes in the actuarys
    estimates from one period to the next.

20
Task Force on Actuarial Credibility
  • Enhance the quality of corporate governance by
    educating audit committees or board of directors
    or both on the roles and responsibilities of the
    appointed actuary.
  • Enhance the self-governance of the profession by
    requiring the appointed actuary to provide an
    explanatory document with the ABCD whenever the
    change in the actuarys reserve estimates over a
    defined period exceeds certain predetermined
    thresholds..
  • Elevate the unique role of the appointed actuary
    within the statutory financial reporting
    environment by incorporating an Actuarial
    Statement within the Jurat Page of each companys
    Annual Statement.

21
Task Force on Actuarial Credibility
  • Task Force Report presented to the CAS Board in
    May 2005.
  • Board accepted the Report and directed the
    Executive Council to consider the recommendations
    and implement them as appropriate.
  • Follow-up report due to Board in November 2005.
  • Report available on CAS Web Site.
  • Member comments and input are welcome.

22
Task Force on Publications
  • Remove papers from PCAS. Keep CAS-specific
    content and add Yearbook content.
  • Create a yearly Membership Directory publication
    as a separate soft-cover publication.
  • Create a new journal called the Journal of
    Casualty Actuarial Science where refereed papers
    will be published.
  • Encourage non-CAS members to publish in the
    Journal actively solicit articles from around
    the world

23
Task Force on Publications
  • Continue to publish the Forum in hardcopy if it
    is economically feasible and subscribing members
    pay the full cost of producing and distributing
    it.
  • Change the name of the Forum to The Forum A
    Clearinghouse for Expressing Ideas and
    Stimulating Discussion.
  • Create a process to publish monographs (e.g.,
    collections of study notes, call papers of
    particularly high quality and focused on one
    topic).
  • Produce an international monograph in 2007 to
    commemorate the ASTIN Colloquium.

24
Basic Education
  • Starting Spring 2005
  • Prerequisites Linear Algebra and Calculus
  • Validation by Educational Experience
    Economics, Finance, Applied Stats
  • Exam 1 Probability with Calculus (3 hours)
  • Exam 2 Interest (2 hours)
  • Exam 3 Actuarial Models Statistics (4 hours)
  • Exam 4 Actuarial Modeling (4 hours)

25
VEE Options
  • Approved university course (grade of B- or
    better)
  • Approved exams (e.g., AP exams for Micro and
    Macroeconomics, CFA exams, CAS transitional
    exams).
  • Other approved experiences (courses/seminars
    designed specifically for VEE credit.)

26
Computer Based Testing
  • Candidates take exam at a standardized testing
    center.
  • Can schedule exam any time during a specified
    period (e.g., three days).
  • Software tutorial provided online and before exam
    begins.
  • User friendly software with easy navigation.
  • Potential for immediate grading.

27
CBT Implementation for Exam 1
  • May 2005 - standard paper and pencil exam.
  • September 2005 - CBT (paper and pencil backup for
    areas without CBT centers).
  • November 2005 - no exam.
  • 2006 - 4 to 6 CBT administrations.
  • Immediate release of grades beginning some time
    in 2006.
  • Rollout to other exams in future years.

28
Code of Professional Conduct
  • Beginning in 2006, candidates taking CAS Exams 3,
    and 5-9 will be required to agree to abide by the
    terms and conditions of the CAS Code of
    Professional Conduct.
  • Recognizes that candidates who have not yet
    achieved Associateship perform responsible
    actuarial work and that this work should be done
    within the framework of the Code.

29
Research Working Parties
  • Research task forces
  • Process should result in quality work products.
  • Brings together the research energy of individual
    researchers.
  • Proven to be effective for GIRO, the general
    insurance research organization of the Faculty
    and Institute of Actuaries (UK).

30
Continuing Education
  • AAA Exposure Draft recommends that the
    Qualification Standards apply to all statements
    of actuarial opinion defined as follows
  • an opinion expressed by an actuary based upon
    actuarial considerations, and intended by the
    actuary to be relied upon by the outside person
    or organization to whom the opinion is addressed.
    The phrase outside person or organization
    refers to persons or organizations other than the
    actuarys direct employer.
  • A statement of actuarial opinion, although
    usually conveyed in writing, may also be conveyed
    orally.

31
2005-06 Calendar of Events
  • Seminar for the Appointed Actuary (with the
    CIA), September 22-23, Montréal
  • CAS Annual MeetingNovember 13-16, Baltimore, MD
  • Online Course on Financial Risk
    ManagementNovember 4-20, CAS Web Site
  • 2006 Seminar on RatemakingMarch 13-14, Salt Lake
    City

32
Image of the Actuary Campaign
  • Profession-wide campaign.
  • Image Advisory Group, made up of members from
    each of the North American actuarial
    organizations, oversees campaign.
  • Campaign kick-off CD ROM sent to all actuaries.
  • www.imageoftheactuary.org/ for more information.

33
I welcome your input regarding . . .
  • CAS Centennial Goal
  • ERM Initiatives
  • Task Force on Actuarial Credibility
  • Basic Education Initiatives
  • Research and Publications
  • Continuing Education
  • International Issues
  • Whats On Your Mind?
  • Questions?

34
  • Thank You!

Robert F. Wolf, FCAS, MAAA Principal, Mercer
Oliver Wyman 10 South Wacker Drive, Suite
1700 Chicago, IL 60606-7500 312 930 0648 Fax 312
930 0641 Mobile 312 560 5228 rwolf_at_mow.com www.mer
ceroliverwyman.com
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