We recently attended the General Insurance Research Organising Committee (GIRO) conference hosted by the Institute and Faculty of Actuaries (IFoA) in Liverpool from the 21st to the 23rd of November. Being the first in-person GIRO conference in the last three years, the event buzzed with so much activity, excitement, and positive energy. It was the perfect place to meet and connect with other experts in the actuarial industry.
The agenda was crammed with many insightful plenary sessions and workshops, discussing everything from climate change to risk assessment, ESG, the future of actuaries, pricing practices, and more.
Keep reading to see our top 5 moments from the conference and action items for all actuaries and insurers!
Emma revealed that inflation is currently at its highest since 1982, bringing lots of uncertainty to inflation projections for the next year. The speakers discussed the tremendous impacts inflation has on the insurance market and how actuaries have a responsibility to help insurers make better decisions and gain actionable insights by leveraging data available to the business to build better predictive models.
Louise Bennett, Mairead Skelly, Kishan Patel and Mirjam Spies from Lloyd's came together to share some updates from Lloyd's on various areas, including the pricing maturity matrix, key uncertainties around inflation, the war in Ukraine, COVID-19, and the general economic environment.
The Lloyd’s team noted that 2022 has been dominated by uncertainties, however, there is still a need to make reasonable assumptions for the future. To this end, the team shared an update highlighting that Lloyd's has now moved to a principle-based approach which has been defined across performance, solvency, and operational areas. The approach aims to ensure one consistent process for syndicate and agent categorisation based on qualitative and quantitative assessments against the defined principles.
On the Pricing Maturity Matrix, Lloyd's defined three focus areas: data and infrastructure, technical, and application. The team also shared that Lloyd's conducted 87 assessments in the first half of 2022 and will conduct reviews based on cyber and reinsurance in the coming year.
In addition, the team shared some insights and trends from the past year, including the increase in robustness of pricing models, stronger governance around Excel spreadsheets, improved portfolio management, data centralisation, and accelerated pricing governance in the form of a structured process for model validation and development.
In the coming year, it'll be essential for Lloyd's syndicates to prioritise adopting the best practices around pricing and actuarial workflows to stay compliant with Lloyd's regulations. Check out our guide to Lloyd's Pricing Maturity Matrix and see how hyperexponential can help streamline self-assessment and accelerate performance improvement.
We loved this session by Graham Oswald and Clare Campbell from PwC on the importance of actuarial modernisation in any insurance organisation. The speakers established the case for actuarial modernisation, citing the need for actionable insights, more efficient processes, and regulatory changes as key reasons. Graham and Clare also shared some best practices for developing a modernisation strategy, including:
Setting a vision
Creating your desired end-to-end process design
Deciding on the right infrastructure and applications to invest in
Building the right skills in your team and focusing on buy-in from all levels
In addition, the session highlighted the need for actuaries to collaborate with other business functions, including IT, data scientists, and broader reporting teams, to increase efficiency and drive change.
We might be biased but the session of the conference for us was “The Future of Pricing”, featuring our very own VP of Customer and Consulting, Tom Chamberlain, alongside Alice Boreman from EY, and Rob Spaul, Head of Technical Pricing at AIG. The speakers discussed the need for pricing transformation, highlighting internal challenges like poor historical performance, external pressures from regulators and competition, and technological developments across the market as drivers for modernisation. Alice also called out seeing expensive, valuable talent spending significant time on low-value activities – something that simply has to change for insurers to attract and retain the best people.
In a poll of the 150 actuaries in the audience, 63% predicted that investing in better models and data could result in more than a 2% loss ratio improvement for their companies. A second poll showed that, as a result, the insurance industry is increasingly prioritising pricing transformation with 37% reporting that pricing transformation is the key priority for their business right now. Interestingly, 25% stated that despite the pressing need to transform, their companies were either not investing at all when they should be, or not investing enough.
So where should insurers begin their pricing transformation journey? Rob shared from his own experience that Excel and Excel-based tools are not the answer, concluding that instead, insurers should optimise for commercial pricing platforms that enable faster updates and allow actuarial teams to build and execute models in one place.
Tom demonstrated how our next-generation pricing tool, Renew, optimises the workflow for actuaries, underwriters, and executives, enabling fast model creation, data-driven decision-making, automated reporting, reduced loss ratios, improved regulatory compliance, and many other benefits.
For this session, Ronald Richman from Old Mutual Insure dived deep into discrimination in pricing, discussing its negative impacts and highlighting the increased regulatory scrutiny on ensuring pricing models are not influenced by discriminatory factors like gender or race.
He explained that the EU legal basis covers two types of discrimination in pricing: direct and indirect discrimination. It's essential to avoid both categories while building effective models. To this end, Ronald demonstrated some ways actuaries can remove discriminative elements in their pricing data and deliver discrimination-free insurance pricing.
We enjoyed three memorable days of learning, networking, and amazing conversations. For the future, insurers must empower actuaries with access to better tools and technology to deliver improved business results, stay ahead of the competition, comply with regulatory changes, and attract top talent.
At hyperexponential, we're enabling high-growth insurers to unlock access to data, refine actuarial and underwriting processes, and enable automation at scale. Our customers have generated real business value across multiple business lines and have enabled their teams with technology for a better work experience.