We live in an increasingly dynamic and interconnected world where risk is constantly present in our daily activities and impacts the outputs we create.

Since ancient times, insurance has been a silent enabler of human progress. Used primarily to mitigate risks, insurance has helped make socio‑economic activities possible that would otherwise have been far too dangerous to undertake.

Today, the insurance industry stands at the crossroads of risk and opportunity. It exists to protect individuals and businesses from risks they face – while at the same time creating value for those who provide the capital that makes this protection possible.

But insurance is itself a risky business – more so than finance – primarily because its ‘production cost’ is uncertain, and also due to complexity of risks it assumes which are typically asymmetric, and heavy in the tail.

To succeed in this space, we must think across disciplines – combining actuarial science, finance, risk management, business & market intelligence, natural science and technology –to manage risk and capital holistically to be able to effectively steer an insurance business towards the efficient use of capital and enhanced firm value.<

Yuriy and Richard have created this masterclass to share their experience of tackling real-world challenges in risk and capital management – and to show how analytical thinking and practical insight come together to solve them.

They explore the fundamentals of value creation in insurance, with a particular focus on general insurance.

They unpack the insurance value chain – who needs what, who delivers it, and who controls which parts of the insurance market – and they look at how market forces and dynamics drive the insurance cycle.

They discuss how to effectively chart a risk-taking path – balancing the art and science of defining and maintaining risk appetite within an insurance firm.<

By watching this masterclass, you will learn to think and act like a modern insurance leader – one who understands how risk, capital, and operations interact to shape business performance and resilience.

You will learn how to build and use risk intelligence – models, tools, processes, and procedures – to turn data and information into insight, and insight into sound, forward-looking decisions – even when information is limited.

You will explore integrated approaches to managing risk and capital dynamically as well as relevant models of firm value management – to quantify firm value, evaluate strategies, and support decisions that drive long-term success.

If you want to understand what integrated risk and capital management is, and how it can effectively be used to support value creation in insurance, then this masterclass is for you.

Yuriy and Richard combine solid theory, practical examples, and proven frameworks for anyone committed to building stronger, smarter insurance businesses.

Guy Carpenter / Marsh Reinsurance and Capital, London, UK

About the Yuriy Krvavych:

Yuriy has over twenty-five years of experience working in general insurance and has delivered a number of strategic risk and capital projects globally.

In his current role as a Managing Director at Guy Carpenter, Yuriy has specific responsibility for the Risk and Capital Advisory offerings. His main areas of focus cover a wide range of global strategic advisory services, including internal capital model development and model use in supporting strategic capital optimisation.

Prior to joining Guy Carpenter, Yuriy was a Senior Manager at PwC’s Actuarial Services in London, UK, providing consulting services to the Lloyd’s market and the London company market in Enterprise Risk Management. This included risk and capital modelling, model validation, advanced risk analytics and reporting, and capital model use. During his time at PwC, he acted as a Head of Risk & Capital Modelling on a number of secondments to PwC’s top-tier insurance clients in the UK, Germany, France, and Switzerland. He was also involved in derivative pricing model validation and CCAR test submission, as well as balance sheet optimisation assignments for PwC’s top-tier investment banking clients.

Prior to PwC, Yuriy worked in Australia at Insurance Australia Group (IAG) as a DFA and Capital Modelling Manager responsible for providing strategic advisory services to the C-suite of the Group. He also worked at Hollard Insurance Australia, where he led the actuarial function.

Yuriy holds a PhD in mathematics from the National University of Kyiv, Ukraine, and a PhD in actuarial science and risk management from the University of New South Wales, Australian Graduate School of Management / School of Risk & Actuarial, Sydney. He is also active within the global actuarial profession and is currently serving as a volunteer on the ASTIN Board, the Non-Life Insurance Risk Section of the International Actuarial Association (IAA), where he runs the ASTIN Masterclasses initiative. Yuriy has contributed to a number of global R&D projects on risk and capital management and has published industry-led research papers. In 2018, Yuriy shared the prestigious Bob Alting von Geusau Prize awarded by the IAA for the best ERM paper.

About Richard Rodriguez: Richard joined Guy Carpenter in June 2019 as Head of Advisory and Analytics. The role covers analytics for reinsurance structuring and placement as well as specific client advisory projects. Advisory projects cover a multitude of activities from rating advisory, to the impact of IFRS17, to assisting clients in respect of all aspects of their ERM and regulatory framework from the detailed modelling to training and governance.

Prior to joining Guy Carpenter Richard was the Chief Actuary at Lloyd’s responsible for the Lloyd’s central reserving and capital activities and regulatory compliance as well as the monitoring and regulating of each syndicate’s reserving and capital process, models, returns and results. The role also encompassed the authorisation of syndicate business plans, review of syndicate rating models by class of business, exposure management, risk management and reinsurance.

Prior to joining Lloyd’s Richard was the Global Product Leader for P&C Capital Modelling at TowersWatson. This involved the delivery, development and industrialisation of P&C financial risk solutions for global and single entity (re) insurers. The role covered all aspects of implementation and use, from data identification right through to the use of economic and statutory models in reporting and monitoring of results for the Executive Team and regulators.

Prior to being at TowersWatson Richard was a Partner at EMB Consultancy where he was responsible for client projects involving reserving, reinsurance optimisation, large case pricing and financial risk modelling and governance involving the development, implementation, validation and use of economic capital models.

One of the largest items on an insurance company’s balance sheet, often the largest, is the loss reserve, the liability for future claim costs for which the company is already obligated. It isn’t possible to operate a risk business without a thorough understanding of its liabilities. Modern insurance businesses rely on reserve models to:

• • establish bottom-line profit for each accounting period;

• • price new business effectively;

• • report to relevant statutory authorities;

• • understand the risk associated with the estimates of liability; and

• • manage the capital commitment to the business of its owners.

Loss reserving methodology has evolved over 50 years or so, from models of a strictly heuristic nature in the early years to properly formulated stochastic models more recently, and has evolved further in the very recent past into machine learning models. Loss reserving is often viewed as a necessary evil, divorced from the excitement of the marketplace, and dull in nature. Greg Taylor shows you that the statistical processes underlying it, and the associated modelling challenges, can lead you down stimulating by-ways.

About the Greg Taylor: Greg is an Adjunct Professor in the School of Risk and Actuarial Studies at University of New South Wales (Sydney, Australia).  Greg Taylor was a founding director of Taylor Fry Consulting Actuaries, where he acted as a consultant for 15 years. Prior to the foundation of that company in 1999, he worked as an actuary in the finance and insurance industry for 30 years, and a further 8 years as an academic. He is an Officer of the Order of Australia, and recipient of one of the only two Gold Medals ever awarded by the Actuaries Institute of Australia. He also holds the Finlaison Medal (Silver Medal) of the UK Institute and Faculty of Actuaries. He specializes in the theory of Insurance Loss Reserving, and has authored two books, and co-authored a third, on the subject. One has been translated into Japanese. He has lectured and held research positions in many academic and industry institutions in Europe and the North America.

Click here to access the Masterclass Reference List.

“The Insurance-Risk Landscape: An Eclectic Survey” is a Masterclass video series written and narrated by Professor Michael R. Powers of Tsinghua University. Through a collection of ten engaging episodes, Professor Powers navigates the metaphorical landscape formed by the many manifestations of insurance risk — from natural and human-made perils to insurance company insolvency. Along the way, he stops to explore some of the most intriguing twists and turns in the landscape, with an ability to make the complex simple, and the simple profound. The eclectic choice of topics includes:

• • the origins of insurance, with relevant insights for today’s markets;

• • the roles of randomness, complexity, and uncertainty in generating losses;

• • rationales for the most commonly used frequency and severity distributions;

• • the interplay between hedging and diversification in risk finance;

• • explanations (and common misconceptions) of insurability and underwriting criteria;

• • the meaning and implications of heavy-tailed losses;

• • the nature of the property-liability underwriting “cycle”;

• • the opposing effects of advancing technologies on insurance markets

Modern financial businesses rely on thousands of models to support decision-making from pricing and reserving through risk and capital to management bonuses and shareholder decisions. These models sometimes fail. Forecasts prove to be inaccurate, or decisions supported by models may turn out to be unwise.

What can we do about this? We cannot eliminate the possibility that the future turns out differently to a model prediction. However, we can ensure that assurance we give on models is both truthful and statistically meaningful. We can reverse stress-test models by feeding them awkward simulated data until they break down. We can choose between harsh validation tests that reveal model weaknesses, or we can apply powerless validation methods where a green light is a foregone conclusion. We can foster a culture where people who become aware of model shortcomings are heard rather than silenced.

This 8-part ASTIN Masterclass uses a series of examples to highlight quantitative approaches to model risk management, using examples related to underwriting risk, stochastic reserving and the modelling of asset price changes. Andrew offers tips for actuaries pressured into expressing undeserved confidence in risky models, together with tips better to support decision making in the context of uncertainty.