Casualty Quarterly, Fall 2021
VOL 5 | NO 3
NiamiThe Casualty Practice Council’s (CPC) Cyber Risk Task Force (CRTF) held a webinar Aug. 26, “Cyber Risk Trends and Issues in Insurance,” looking at some of the key current issues in cybersecurity, cyber risk, and insuring against cyber threats.
CRTF Chairperson Norman Niami moderated the session, and presenters were Erin Kenneally, director, cyber risk strategy, Guidewire Software; Chris Hedenberg, director of data science, Corvus Insurance; and CRTF member Samuel Tashima.
Panelists provided insights into cyber risk insurance issues—including the exposure to financial and reputational harm resulting from cyberattacks specifically and cybercrime generally—which has become increasingly prevalent and persistent in recent years as to be commonplace.
They discussed ransomware, cyber insurance rates, actuarial data, predictive modeling and risk-driven data modeling, and took questions from attendees throughout the presentation. Slides and audio are available free to logged-in Academy members.
Cyber Risk Toolkit Released
In conjunction with the webinar, the CRTF released a series of papers combined together as a Cyber Risk Toolkit—resources for the general public, public policymakers, actuaries, the insurance sector, and other stakeholders. The toolkit is composed of an Introduction to Cyber, Cyber Threat Landscape, Silent Cyber, Cyber Data, Cyber Risk Accumulation, Cyber Risk Reinsurance Issues, and Ransomware. It also includes common cyber-related policy language definitions.
This introductory paper examines some of the key aspects of cyber risk coverage such as general insurance product market. It also discusses some of the more well-known cyberattacks and looks at the cyber threat landscape. Other upcoming CRTF papers will be added to the Toolkit as they become available.
The Academy’s Annual Meeting and Public Policy Forum, to be held as a hybrid event Nov. 4–5 at the Fairmont Hotel in Washington, D.C., will include several plenary sessions with property/casualty (P/C) content. P/C breakout sessions will include:
Affordability in Auto Insurance (Nov. 4)—A panel discussion on factors that affect affordability of auto insurance as well as the Federal Insurance Office in U.S. Department of the Treasury’s recent request for information to update its 2017 Affordability Study and what that might mean for automobile insurers and policy holders going forward.
Wildfire Risk: Still a Hot Topic (Nov. 4)—A panel discussion on the current effects of recent wildfire seasons, some of the most costly and destructive on record, on the insurance industry and public policy arena, and what it could mean in the future.
Impact of Telehealth on Workers’ Compensation (Nov. 5)—A panel discussion on what the increased focus on telehealth means from the perspective of injured workers, their employers, and insurers.
Plenary sessions will cover cross-practice critical issues including COVID-19; diversity, equity & inclusion; insurance regulation at the state, federal, and international levels; and professionalism and ethical concerns relating to data analytics and artificial intelligence applications. All of these sessions will offer the opportunity to have a discussion directly with policymakers, subject-matter experts, and Academy leaders.
New this year: Individual-session registration is also available.
Featured speakers will include Robert Costa, co-author with Bob Woodward of the No. 1 bestseller Peril, who will speak at the opening plenary session for in-person attendees only; and Cathy O’Neil—author of the bestselling book Weapons of Math Destruction: How Big Data Increases Inequality and Threatens Democracy—who will keynote the professionalism plenary session that will be accessible to both in-person and virtually connected attendees.
The Academy will also honor recipients of its annual service awards—the Jarvis Farley Service Award, the Robert J. Myers Public Service Award, and the Outstanding Volunteerism Awards—and Maryellen Coggins will succeed outgoing President Tom Campbell during the Academy’s presidential transition.
The Academy is committed to following local health guidelines. Learn more about the Fairmont Hotel’s commitment to health and safety here. Join your peers and connect with Academy members and leadership by attending the Academy’s premier annual event. Register today.
GibsonA recent episode of the Actuary Voices podcast features an interview with Rich Gibson, the Academy’s senior casualty fellow. Gibson traces his career as an actuary, which began in a high school math class and progressed to Miami University in Ohio, and then to becoming a P/C actuary. Working at the Academy, Gibson has been “dealing with different issues,” including cyber risk, business interruption insurance, and wildfires. “I like being part of that,” he said.
Lauren Cavanaugh, vice president, casualty, and Laura Hanson, vice president, life, co-presented verbal comments to the NAIC’s Special (EX) Committee on Race and Insurance regarding then-proposed charges being considered by the committee. Their remarks addressed concerns with the special committee’s property/casualty and life workstreams previously provided in a comment letter submitted by Academy President Tom Campbell in May.
Academy volunteers gave presentations to the National Association of Insurance Commissioners (NAIC) as part of its 2021 Summer Meeting in virtual meetings leading up to its in-person meeting in Columbus, Ohio, in August.
Casualty Vice President Lauren Cavanaugh and Committee on Property and Liability Financial Reporting (COPLFR) Chairperson Derek Freihaut gave an update of Casualty Practice Council and COPFLR recent and forthcoming activity to NAIC’s Casualty Actuarial and Statistical (C) Task Force (CASTF).
COPLFR Comments to CASTF
COPLFR sent an updated version of its comment letter to the NAIC Blanks Working Group on proposed changes to P/C annual statements.
The Automobile Insurance Committee sent comments to the U.S. Department of the Treasury’s Federal Insurance Office (FIO) on its request for information regarding FIO’s future work relating to monitoring the availability and affordability of automobile insurance.
Academy President-Elect Maryellen Coggins and Steve Jackson, assistant director for research (public policy), presented in mid-September at the Virtual Casualty Loss Reserve Seminar (CLRS) on the Academy’s scalars research paper released earlier this year.
Scalars are designed to allow regulators in a jurisdiction to have access to a metric of the capital adequacy of an insurance group—or more generally, of a financial services group—based on the capital adequacy metrics of its individual components, including those entities regulated in other jurisdictions.
The annual CLRS, which was held Sept. 13–15, is sponsored jointly by the Academy and the Casualty Actuarial Society (CAS).
Climate extremes still happening with great frequency, ACI chair reiterates
The release of the winter 2020–21 data of the Actuaries Climate Index (ACI), which provides objective measures of specific and aggregate changes in climate extremes and sea level across Canada and the United States, shows a second consecutive small decline in the ACI’s five-year moving average which now sits at 1.19 points above the index’s reference period.
“The decline does not change the overall results that the ACI’s measures of climate extremes have been consistently occurring at well above the rate seen from 1961 to 1990,” said Doug Collins, chair of the Climate Index Working Group. One factor behind the small decline in the five-year average was the new seasonal value reflected in this data release for the winter 2020–21 period, which was relatively low compared to seasonal values in recent years, Collins said.
The ACI is sponsored jointly by the Academy, the Canadian Institute of Actuaries, the CAS, and the Society of Actuaries.
Richmond Fed Cites ACI
The ACI is used as a research basis for a working paper published by the Federal Reserve Bank of Richmond, Extreme Weather and the Macroeconomy, as part of its Working Paper Series.
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