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Gone are the days when a stereotypical view of an actuary, with their pocket protector and scientific calculator, is a fitting description. In fact, the need and value are so important, Berkley Human Services has a dedicated team of actuaries who help guide strategies and success.

In today’s insurance companies you will find actuaries contributing in broad and diverse ways. They are becoming broad based financial and risk management professionals and are more valued, many times even having a seat at the management “table.”

Pricing/Casualty Actuaries

Today’s Property/Casualty pricing actuary is facing a myriad of business challenges to keep up with the ever-evolving pricing for insurance risks and claims.

Insurance product pricing actuaries are asked to evaluate the ultimate loss costs (claim settlement values and expenses) of the products currently being offered. However, the final settlement of claims on a policy written today may not happen until many years in the future. Therefore, actuaries need to make assumptions today for settlements which may not be finalized for quite some time and at a financial level that may significantly change due to inflationary factors as well as social trend factors. These factors may include things discovered by a more informed claimant who is now savvier than ever when it comes to claim settlement value worth. This all means that actuaries have to do their best to stay on top of these trends so they appropriately price the products being offered.

Actuaries and Big Data

Actuaries must also price products in a more refined fashion than ever before. In today’s age of “big data,” pricing refinement is required to ensure the prices of the products being offered are fair in the marketplace. They cannot be too low to not cover future claim settlement values, or, too high to not be a viable and marketable product. Big data (and the access to it) has helped insurance companies refine their pricing models to reflect elements which may not have been considered in the past. Notably, telematics in auto insurance has allowed auto insurance pricing to reflect a driver’s driving habits and offer premium credits for safe driving habits, as measured by small monitors in the vehicles or on the driver’s cell phone. Comparably, other types of insurance, including property insurance and commercial liability insurance, are continuing to evolve to recognize predictive data in their approach to fine tune product pricing. On the property side, this includes the impact of weather pattern changes and the higher incidence of rampant wildfires.

Actuaries and their analysis are critical when it comes to developing sophisticated pricing models and setting product development strategies. The actuary is most typically a highly trained professional with a knowledge base of math and statistics but more recently the role is requiring additional business analytic and strategic management skills. As financial and societal trends are becoming increasingly complex and volatile, just maybe, the stale stigma of the actuary of the past will be extinguished as actuaries play more prominent roles and are at the forefront of the exciting developments happening within insurance companies.

Berkley Human Services actuaries know the nonprofit insurance field and they incorporate these unique factors when determining pricing structures. At the heart of Berkley Human Services is understanding of the individual needs of nonprofit and human service organizations.

Learn more about actuaries and why they are important to today’s insurance company.