Life and health insurers’ actuarial teams currently operate with inefficient legacy tools, systems, and processes which dramatically limit the value they can deliver. Insurers must invest in flexible and efficient solutions to automate these processes and free up their actuarial resources.
The traditional day-to-day of most actuarial teams is bogged down in time intensive processes due to their software’s inability to process data quickly, efficiently, and clearly enough for actuaries to move on to the most valuable part of their work: analysis.
Consider the following workflows:
- Actuarial run time, which can take hours or even days depending on the amount and type of data
- Model migration, consolidation, and replication, which can take months
- The time and risk cost of the ‘key-person’ - a common problem with actuarial models
- Data cleaning, management, and integration (in the experience study process alone, this part of the process can take months)
- Reviewing, organizing, and comparing outputs, which are limited on the amount of information they can consider because of processing time
Now, consider what actuarial teams could accomplish if the data management part of these workflows was completely automated. The potential this unlocks is significant, particularly with regards to freeing up actuarial resources, which are already severely limited in many life and health insurers. By automating the manual, time and resource intensive portions of actuarial workflows, actuaries can instead focus more time on insights, analysis, product development, pricing strategy, or other high-value work.
In order to realistically automate actuarial workflows, insurers must consider whether they have the following capabilities:
- A user-driven, open and flexible, low-code environment
- Rapid and cost-effective model runtimes
- Transparent models which don’t suffer from the ‘key person’ risk
- Automated model reconciliation
- Actuarial and data science models in the same environment
- Open, low-cost APIs
In 2022, life insurers must consider their capabilities with regards to actuarial workflows, particularly whether or not they’re investing the right ones. Regardless of how it’s achieved, whether by third-party vendors, internal development, or partnership, life and health insurers must gain the above capabilities to remain competitive and effectively leverage their actuarial teams.