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Expert judgement

Published online by Cambridge University Press:  15 April 2016

M. Ashcroft ,
R. Austin ,
K. Barnes ,
D. MacDonald ,
S. Makin ,
S. Morgan ,
R. Taylor  and
P. Scolley
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Abstract

Expert judgement has been used since the actuarial profession was founded. In the past, there has often been a lack of transparency regarding the use of expert judgement, even though those judgements could have a very significant impact on the outputs of calculations and the decisions made by organisations. The lack of transparency has a number of dimensions, including the nature of the underlying judgements, as well as the process used to derive those judgements. This paper aims to provide a practical framework regarding expert judgement processes, and how those processes may be validated. It includes a worked example illustrating how the process could be used for setting a particular assumption. It concludes with some suggested tools for use within expert judgement. Although primarily focussed on the insurance sector, the proposed process framework could be applied more widely without the need for significant changes.

Keywords

Expert JudgementSolvency IIMaterialityProcessValidation
Type
Sessional meetings: papers and abstracts of discussions
Information
British Actuarial Journal , Volume 21 , Issue 2 , July 2016 , pp. 314 - 363
Copyright
© Institute and Faculty of Actuaries 2016 

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