School trip cancellations
We provided actuarial support and modelling options to government as it worked out the cost of school trips which had been cancelled due to COVID-19.
Work undertaken by the Government Actuary’s Department (GAD) supported parts of the education system, as the country recovered from the pandemic.
We worked with the Department for Education (DfE) as it looked to help schools and academies, which are members of the Risk Protection Arrangement (RPA).
These educational establishments were seeking to cover losses arising from school trip cancellations due to COVID-19.
Commercial insurance alternative
The RPA is a mechanism through which the costs of risks are covered by government funds. It provides an alternative to commercial insurance for schools across England.
It includes coverage for losses arising from property damage and business interruption, employers’ liability, public liability, and travel for domestic and overseas trips.
During the pandemic, most school trips were cancelled due to COVID-19 restrictions. DfE and HM Treasury decided that the RPA should continue covering losses arising from domestic and overseas travel cancellations, despite the uncertainty caused by the pandemic.
GAD’s involvement
As part of our analytical and strategic support for the RPA, we helped build and review a model which estimated the value of trips cancelled due to COVID-19.
The model looked at how long this period of uncertainty might be and approximated the ultimate frequency and cost of potential claims arising from travel cancellations.
The analysis included multiple scenarios which evolved as more data was acquired. The results from the model were used to inform decisions made by senior leaders at DfE and at HM Treasury and helped inform RPA’s future planning.
Spending profiles
The GAD team continues to support this modelling. We built in allowances in our regular provisioning exercise for a potential re-emergence of COVID-19 over the next couple of years. This allowance for COVID-19 re-emergence has been estimated by analysing expected spending profiles in the future.
GAD actuary Sam Davies has been involved with the analysis. He said: “Almost three-quarters of academies in England and an increasing number of local authority schools are signing up to the RPA.
“As part of our work, we will re-examine the data and information regularly. We have built in allowances and have made bespoke adjustments to the calculations.
“This is to help the RPA get a clearer understanding of what could happen and to plan for the impact of further COVID-cancellation claims in the future.”