CIA (e)Bulletin/(e)Bulletin de l'ICA
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April 2016
 
 

Research Prioritization Process at the CIA

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By Chris Fievoli, FCIA

One of the more significant operations performed by the CIA is our research function. Each year, we have a number of projects under way, managed by the Research Committee (ResCo) and its various subcommittees. Please refer to our current research newsletter for an update on our most recent activities.

An important part of this process is deciding what projects we will pursue in a given year. This article provides some insight on the exercise we recently completed to prioritize projects for the 2016–17 fiscal year, which runs from April 1, 2016 to March 31, 2017.

Where Do the Ideas Come From?

There are two types of research studies that ResCo conducts—regular studies repeated on a periodic basis (referred to as maintenance projects, which are typically experience studies), and studies conducted on a one-time basis. The individual life mortality study that is completed annually is an example of the former; the water damage study is an example of the latter. Maintenance projects typically consume only a fraction of the total research budget, so a number of one-time projects need to be considered each year. ResCo strives to ensure that there is a reasonable balance between maintenance projects and one-time projects that support the CIA’s strategic objectives.

Having a balance across practice areas is important, so the Research Committee oversees nine subcommittees, each related to a specific field of practice. These subcommittees are as follows:

  • Annuitant Experience;
  • Segregated Fund Experience;
  • Group Life & Health Experience;
  • Individual Life Experience;
  • P&C Research;
  • Pension and Group Annuity Experience;
  • Enterprise Risk Management Research;
  • Academic Research; and
  • Individual Living Benefits Experience.

The subcommittees normally generate ideas for one-time projects, but ResCo wanted to make sure that a wider range of opinions within the CIA structure was considered. To that end, a number of CIA committees were contacted and given the opportunity to submit proposals. These included the following:

  • All practice committees;
  • Communications Committee;
  • Public Positions Committee;
  • Enterprise Risk Management Applications Committee;
  • Pension Advisory Committee; and
  • Health Committee.

Each proposal had to provide an outline of the project and an estimated cost for budgeting purposes. As well, submitters were asked to score the proposal according to a set of criteria.

Project Scoring

All one-time research projects submitted for consideration were scored according to the following criteria:

  • Impact (40% of total score) – how much of an impact would the proposed project have on both the public and the actuarial profession?
  • Cost-benefit (20%) – is the desired outcome justified by the estimated cost?
  • Uniqueness (20%) – is the project original, and is it likely to succeed?
  • Quality (20%) – has the research process been carefully considered, and will it deliver a high-quality product?

Proposals were also scored for achievability; that is, how plausible is the concept and methodology, and how reliable is the proposed researcher? The achievability score (0–100%) was applied to the overall score derived from the four criteria above.

Once the proposals were received, each ResCo member provided their own score for each proposal. These scores were collected and aggregated, which resulted in a preliminary ranking.

The Final Decision

The Research Committee met in person on February 25, 2016 to finalize the priority list. Using the preliminary scores as a guide, ResCo members discussed the merits of each project. The proposers of each project were invited to attend the meeting as well, in order to present additional facts on their idea and respond to any questions. ResCo members also considered the following:

  • Strategic importance – the CIA’s strategy emphasizes the importance of research to meeting the CIA’s responsibility to the public, and promoting the actuarial profession in Canada.
  • Academic relations – this year, the CIA agreed to provide specific grants to universities for academic research projects. ResCo ensured that a significant number of these projects made the final list. The Academic Research Subcommittee played a key role in sourcing and evaluating project proposals.
  • Opportunities for co-sponsorship – the Society of Actuaries has indicated an interest in co-funding some CIA initiatives. The potential for additional funding was a consideration in the final prioritization.
  • Public policy – Research projects were are also considered from the viewpoint of whether they could potentially lend themselves to the development of public positions.

The final list was shared with the CIA Board, and submitted to the Member Services Council, to ensure consistency with our strategic direction.

Assessment

Overall, the prioritization process was considered a success. Getting buy-in from a wider audience was an important goal, and ResCo members collectively felt that the final priority list was the right one.

CIA members are encouraged to contact me with any questions about our projects. Suggestions for future projects are always welcome.

Chris Fievoli, FCIA, is resident actuary at the CIA Head Office.

 

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