SHORT TERM INSURANCE COMMITTEE (STIC)
REPORT TO COUNCIL OF ACTUARIAL SOCIETY – 25 JULY 2011
This is a summary of the activities of the Short Term Insurance Committee (“STIC”) over the
period May 2011 to July 2011 for the July 2011 Council meeting.
2. Items where a decision/approval from Council is requested
2.1. Approval of new chairperson – Beverly Dias
The existing chair has completed his two year term. Due to business reasons beyond his
control, Alex our deputy chair is unavailable to take over the chair for a two year term as
originally planned. STIC members have discussed this at their 21 July 2011 meeting and
would like to propose Beverly Dias from SCOR as the incoming chair for a two year term.
We request Council’s approval for the proposed nomination of incoming chair.
3. Areas where assistance / guidance from Council is needed
3.1. Follow-up on restructuring of STIC
Although we have not had any feedback through Ray from Council on the proposed re-
structuring outlined in our May 2011 report, we continue to welcome any comments Council
might have on the proposed re-structuring of the STIC.
4. Items Council should note to be informed on activities of the Society
4.1. Update to PGN 401
A revised version of PGN 401 (Guidance note on technical reserving in Short-term
insurance) is still planned to be tabled with Council for approval within the course of 2011.
4.2. Discussion paper – Compulsory 3rd party motor insurance for property
By means of a questionnaire approach, expert input has been obtained on assumptions used
in a rudimentary model. Quite surprisingly, the views of various experts were materially
different on the assumptions questioned. Despite this, the working group is in the process of
incorporating these views into the model assumptions. Work continues on using the model
output to draft a discussion paper on the financial implications of compulsory 3rd party motor
insurance (property damage) while purposefully refraining from tackling the ethical issues of
such compulsory insurance or the delivery mechanism.
It seems the end of May 2011 Department of Transport workshop on 3rd party motor
insurance (property damage) did not occur. As a result, the STIC did not have an opportunity
to present at this forum.
4.3. Annual convention
STIC broke with past tradition in having a separate convention and joined the 2011 annual
Actuarial Society convention as a separate track. Based on my understanding, the following
were among the challenges that have presented themselves with this transition:
Travel costs for overseas speakers (something we did from our sponsorships in the
Venue for the full day short-term insurance track (we generally had 100 to 120
delegates attending); and
Inability for delegates to register and attend the short-term insurance day only (we
foresee a loss of student members where employers will not pay for the full 2 days).
We had discussions with the organising committee on these matters and are continuing to try
our best to offer a short-term insurance track as part of the 2011 Actuarial Society
4.4. F103 Study notes
A project to produce a single set of F103 notes that combines the best of the UK’s ST7 and
ST8 courses is making steady progress. In the interests of keeping the size of the course in
line with the other F1 subjects, a decision has been taken to limit the amount of technical
material covered and relegate this material to the relevant earlier courses. It does not appear
as though much material will be shifted to the later F203 course.
The F103 syllabus has been split into three main sections namely;
1. General principles which are applicable to both Pricing and Reserving (Capital
2. Objectives specific to Pricing, and
3. Objectives specific to Reserving and Capital Modelling
Current milestones aim to have a complete set of notes by end of Sep 2011. The outcome of
this project will be an updated set of F103 notes in line with Institute and Faculty. With
updated notes being used to lecture F103, our intention is to attract more students to pursue
general insurance as a speciality.
4.5. SAM project
The FSB has issued its QIS I for voluntary completion by 16 September 2011 for registered
insurers (life and short-term). QIS I will be used to calibrate the standard model capital
requirements for SAM when it becomes effective in 2014. Many short-term insurers
(especially leading players) are directing resources at completing QIS I.
5. Progress of committee’s actions against annual plan for 2011
STIC has its third quarterly meeting in July 2011. With pressing demands on actuarial
resources in short-term insurance, progress on many initiatives has been taking longer than
6. Contact with the Regulators and/or other authorities
Nothing to report.
Regular interaction with the FSB occurs through the SAM project.
6.3. SAICA short-term interest project group (STIPG)
Nothing to report.
The main committee (subject to proposed re-structuring as explained in the May 2011 report)
has welcomed a much needed representative from Mutual and Federal. Below is the list of
25 members (including representatives from FSB, SAICA, SAIA and Council) currently
serving on the STIC:
Name Email Company / Organisation
André Jansen van Vuuren (Outgoing
chair) firstname.lastname@example.org Guardrisk
Alex Thomson (Outgoing Deputy
Chair) Alex_Thomson@quindiem.com Quindiem
Erik Harkema (Secretary) ErikH@hollard.co.za Hollard
Beverley Dias (Incoming chair) email@example.com Scor
Charles Hitchcock firstname.lastname@example.org SAIA representative
Colin van der Meulen email@example.com Munich Re
Eugene van der Westhuizen Eugene@hannover-re.co.za Hannover Re
Ed Chihambakwe firstname.lastname@example.org University of Cape Town
Hantie van Heerden email@example.com FSB representative
Ilse French firstname.lastname@example.org SAICA representative
Jaco van der Merwe email@example.com Deloitte
Jacques du Preez firstname.lastname@example.org Mutual and Federal
Johan Nothling email@example.com Sigma Synergy
Lance Moroney Lance.Moroney@aon.co.za AON
Manoli Damoulakis Manoli.Damoulakis@flagstonere.bm Flagstone Re
Matthew Weaver MWeaver@MunichRe.com Munich Re
Natalie van de Coolwijk firstname.lastname@example.org Natsure
Ninette Meyer Ninette.Meyer@absa.co.za ABSA
Paul Radomsky email@example.com AON
Ray Welham firstname.lastname@example.org Council representative
Sias Esterhuizen email@example.com Deloitte
Sumarié Greybe firstname.lastname@example.org Quindiem
Vuyo Rankoe email@example.com Centriq
Only participates in a sub-
Annemarie Sinclair (Examination) Annemars@hollard.co.za Hollard
Wynand Viljoen (SARS) firstname.lastname@example.org Quindiem