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Why P&C insurers prefer versatile actuaries

Four ways insurance companies benefit by hiring actuaries with cross-disciplinary training

Technological advances like telematics, artificial intelligence and blockchain won’t give insurers a competitive edge without the right people driving such innovation initiatives. (Photo: iSotck)
Technological advances like telematics, artificial intelligence and blockchain won’t give insurers a competitive edge without the right people driving such innovation initiatives. (Photo: iSotck)

Amid all the buzz the InsurTech wave is generating for its potentially seismic impact on the Property & Casualty (general insurance) business, some of the industry’s leading strategic thinkers are cautioning insurers not to overlook the human element.

Technological advances like telematics, artificial intelligence and blockchain alone won’t give insurers a competitive edge in the marketplace, EY Americas Insurance Leader David Hollander asserts in a recent report. "Without the right people, driving the next stage of innovation and transformation for P&C insurers will be impossible."

"The right people" in this case includes actuaries. Insurers are realizing that in order to develop and deliver the innovative products, lines, service and support consumers demand, while protecting themselves and their customers from the increasingly complex, interconnected and borderless risks they face, they need actuaries with greater multidisciplinary training and a broader global perspective on risk.

Actuarial education organizations such as the Society of Actuaries (SOA) are responding to employer needs by adjusting their education programs to give candidates an even stronger multidisciplinary foundation early, at the associate level. From the outset, candidates for the Associate of the Society of Actuaries, or ASA, start learning and applying concepts from all areas of actuarial practice, developing a diverse skillset that will serve them — and their employers — well.

SOA is in the process of strengthening its actuarial education programs across the board with a series of updates to its ASA and CERA curriculum. Drawing heavily from feedback solicited from insurers themselves, the reshaped SOA educational pathway emphasizes immersive, case-study-based learning using advanced modeling and predictive analytics tools and techniques to address real-world risk scenarios that cut across disciplines — scenarios they’re likely to face as working actuaries.

That cross-disciplinary foundation also becomes the platform for continuing their actuarial education at the fellowship level. SOA, the world’s largest actuarial professional organization, offers Fellowship-level education in Retirement Benefits, Individual Life and Annuities, Group and Health, Corporate Finance and ERM, Quantitative Finance and Investment, and most recently, in General Insurance.

Nowhere is a well-rounded actuarial skillset more important than in the sprawling area of general insurance/property-casualty. The SOA’s General Insurance track focuses on global risk and the global regulatory environment, so candidates emerge from the pathway to Fellowship armed with the ability to tackle some of the most formidable risks that insurers and consulting firms face, from climate change to insurability of terrorism losses to the development of catastrophe models and beyond.

Hiring actuaries who come with grounding in multiple disciplines brings a range of benefits, including:

        1. A freer flow of ideas and solutions. Having actuaries who are willing and able to borrow and apply strategies, practices and solutions from other disciplines to address multifaceted risks like cybersecurity and climate change can open new channels for communication and cross-pollination of ideas among and across an insurer’s various lines of business. The result is a smarter, more efficient and strategic way of doing business.
        2. Immediate strategic assets. Actuaries arrive not only with a deep working knowledge of general insurance/property-casualty, but with a firm grasp of other disciplines to draw from, so insurers can devote less resources to on-the-job training and more to other strategic priorities.
        3. Maximizing tech, data and analytics investments. Insurers gain access to actuaries whose multidisciplinary background gives them a keen sense of how and when to use the emerging technology, data and analytics tools in which insurers are investing so heavily.
        4. Flexibility. Actuaries with a deep working knowledge of multiple disciplines give employers more options for how they deploy their actuarial resources.

Cognitive era advancements like predictive modeling and analytics, artificial intelligence, autonomous vehicles and blockchain may indeed give property-casualty insurers the means to transform their business. But to unlock the game-changing potential in these tools, it’s up to insurers to find ways to leverage the multidisciplinary skillset that an SOA general insurance actuary brings to the table. Because as experts like EY’s Hollander point out, technology means little without the "right people" to maximize it.

With roots dating back to 1889, the Society of Actuaries (SOA) is the world’s largest actuarial professional organization with more than 28,000 actuaries as members.

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