WHAT DO ACTUARIES DO? There are two main prongs to being a Property and Casualty Actuary: Rate-making and Reserving. An actuary is instrumental in setting the rates for the premium that is going to be charged for signing a risk. The other job of an actuary is to take an inventory of all open claims and estimate what the ultimate cost will be. They utilize historical and industry data to predict what is going to happen.
HAVE A DATA-DRIVEN CULTURE: You have to have a culture that enjoys data and isn’t scared of it. It requires employees to be curious and wanting to see the data. When employees get comfortable with the data, they will start to ask for more of it. Analyzing data requires volume (you will need lots of it), and having clean data (accurate information). Let your team know how important they are to the whole analytic enterprise. Have a philosophy of “every click counts.” If the data isn’t being inputted accurately, you will not be able to properly analyze it. Managing data, and providing regular feedback to employees, is vital to avoiding “dirty data,” or inaccurate information. If the employees who are going to use the data in the claims and underwriting departments have the buy-in, they are more likely to work hard to accurately record the information.
THE DATA YOU NEED MAY CHANGE OVER TIME: The data points that you originally needed will likely change as time goes on. You must ask: is this information needed? The information being collected may be extraneous and is no longer needed. There may be another way to obtain the information, to avoid being onerous for the people working on the front line. Processes should change as your company evolves.
EVIDENCE-BASED DECISION MAKING: Intuition works well 95% of the time, but the 5% it doesn’t can be very problematic. The human brain makes mistakes, so it is important to read the data without bias. Do not cherry-pick data that confirms or negates your opinion; you must take all the data to make a proper analysis.
DOES YOUR AUDIENCE UNDERSTAND YOUR DATA? It is important to put yourself in your audience’s shoes. While your chart may look great, it may be very difficult to process the information. A simple chart that reaches a wider audience is a better choice when presenting the data results.
DO YOU LOVE MATH AND STATISTICS? CONSIDER A CAREER AS AN ACTUARY: The path to becoming an actuary requires taking several exams and can take several years, but it is a very rewarding career. Data takes on different meanings to an actuary. While the general public sees data as charts and graphs, an actuary sees the information comparable to looking out of a windshield in a car, and asking “what is going to happen tomorrow?” If you have a natural curiosity and enjoy taking a deep dive into data and statistics, this could be the start of a wonderful career choice!