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Client Examples: How We're Solving for Unique Challenges with Actuarial Consulting Work

May 07, 2020 / by Ben Cohen, FSA, MAAA

As we enter into an unprecedented global economy spurred by COVID-19, it’s more important than ever for insurance carriers to evaluate their financial results. With the world’s workforce undergoing ever growing challenges like personal and family illness, working remotely and taking time off, insurance carriers need to be prepared. 

Like many of you, we’re working remotely, but we continue to work closely with our clients to manage various actuarial issues and their potential volatility. Here are a few of the ways we’ve been helping our clients during this unique time

Forecasting/reforecasting

The future is arguably more unpredictable and uncertain than it’s been in decades, and many of our clients have looked to us for guidance in developing recommendations and models that make sense of how to approach the coming months. We’re working with clients to help them reforecast their budgets for the rest of 2020. 

Filing rate increases

With the potential for state insurance departments to be disrupted, we have worked with multiple clients to expeditiously file what’s needed to get ahead of any potential changes or delays. This isn’t necessarily related to the increase in anticipated future claims, but keeps our clients in compliance with various state regulations and allows those states ample time to approve new filings.

Hospital claims/ICU exposure review

The expected number of needed hospital beds and ICU stays has increased dramatically over the last several weeks. Using our actuarial models, we have worked with some clients to help them determine how much hospital/ICU exposure they have and to review what the possible outcomes could be. 

New product sales

Some clients have initially expressed concern that their sales may decline due to the inability of customers to visit companies or for agents to sell insurance. We work closely with them to develop scenarios for reduced sales.

Interest rate sensitivity

Another issue our clients are concerned about is interest rates, which are currently at or near record lows. We are helping to develop plans around what happens if interest rates do not return to normal levels in the coming months.


Working with an actuarial consultant during this time can ease your burden while improving your offerings; here’s how:

Specialized expertise 

Actuarial consultants are highly trained in and devoted to understanding statistics, probabilities and economics. They are informed and uniquely positioned to assess and advise on how to best plan for and pivot in response to evolving economical situations. Having been involved in measuring multiple scenarios for a range of clients, they can provide sound financial advice when it comes to understanding the factors at play and related pricing implications

Lower overall cost

Generally, it could take an internal team significant additional time to fully evaluate the scenarios at hand, make decisions and complete associated tasks. While they may be fully capable of doing so, it could be costly to put this responsibility on your team. With the impacts changing rapidly, it can be hugely cost-effective to partner with a consultant who is wholly devoted to understanding what’s at play and the best solutions to meet challenges.

Third-party perspective

It can be difficult to look outside one’s own company to see the bigger picture. During this time, you may be faced with competing needs and requirements, while trying to remain profitable. Outsourcing actuarial reporting, modeling or analysis can help ensure that you are proactively offering the most strategic decisions for your business.

Interested in discussing your unique situation and how your company can navigate the waters during this time of uncertainty? Drop us a line, we’d love to talk.

 

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Photo by Charles Deluvio on Unsplash

Topics: Insights

Ben Cohen, FSA, MAAA

Written by Ben Cohen, FSA, MAAA

Ben serves as Wakely Actuarial’s President & Consulting Actuary. He joined Wakely in 2002 and enjoys the variety in the day-to-day of his current role.

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