How GAD worked with government to protect academies
Advising on alternatives to commercial insurance.
The Government Actuary’s Department (GAD) advised the Department for Education (DfE) on an alternative to commercial insurance for academy trusts. The risk protection arrangement (RPA) means DfE covers the property and liability losses incurred by academies instead of using commercial insurance.
Analytical support
We have helped with the operation of the RPA since its inception in 2014. As the arrangement has matured, we have worked in partnership with DfE to further improve the value for money that the arrangement offers.
We provided analytical support to better understand the risk profile and potential costs of new areas of cover. This led to overseas travel and cultural assets protection being offered at no additional cost for the 2018 to 2019 academic year.
Realistic disaster scenarios
We estimated future cash flows and the range of costs for ‘realistic disaster scenarios’. The work gives an indication of the size of shock losses that may need to be absorbed by the RPA.
The concept of realistic disaster scenarios builds on techniques used by the commercial insurance market to better understand extreme events. In the context of the RPA, such an event could include a severe UK-wide flood, terrorism or even an abuse scandal.
GAD’s analysis helped support DfE when making decisions on the price of membership. This led to a price drop from £20 per pupil to £18 per pupil in the 2019 to 2020 academic year.