5 Changes in Your Risk Profile Your Actuary Wants to Know About
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When is the last time you read through an actuarial report and felt confident in your understanding of the numbers?
For most program managers, actuarial analysis is a bit of a mystery … the calculations and estimates provided are central to the success of their business, yet their justifications remain unclear. And many managers may be just fine with that, as long as they trust their actuary’s judgment.
However, the best analyses require strong collaboration between actuaries and their clients. With a better understanding of what actuaries do, program managers can better identify the pieces of information needed to produce accurate estimates of future losses, IBNR reserve requirements and optimal self-insured retention levels.
“We use historical data to make assumptions about what will happen going forward. But when businesses undergo significant changes, that historical data may no longer be predictive or sufficient. If a client company is not aware of all the information we need to know, it could significantly impact our results,” said Aaron Hillebrandt, principal and consulting actuary, Pinnacle Actuarial Resources.
“That’s why we try to educate companies as much as possible about what we do, and the data points that are most helpful for us.”
Insurers have certainly experienced COVID-19 impacts that actuaries need to measure, but other significant shifts should also be taken into account. Here are five key changes businesses may undergo that program managers should communicate to their actuarial partners.
To learn more about Pinnacle Actuarial Resources, Inc., please visit their website.