By Ted Gotsch
Senior Policy Analyst, Content and Publications
The world is an uncertain place, one where we often find ourselves not in control of everything happening around us. We face risks every day—to our health, our property, our finances, and even our own lives.
It is fruitless, and even unhealthy, to let fear of that truth take control of us. Thankfully, there is a fallback that can give us some sense of safety and protection—insurance. June 28 is National Insurance Awareness Day, a day where we should take a moment to not only delve into its significance in securing our health and assets, but also recognize the pivotal role insurance plays in fortifying our future.
For consumers, it is a good time to review policies and see if they are still meeting our needs and the needs of our families. As time goes by, people’s needs change and what might have worked a year ago (or longer) might not be the best match for us today. For those who have had minimal coverage, or have even gone without some forms of insurance, such a reality check is essential.
Here at the Academy, our members have a special understanding of the insurance industry. Many work juggling probabilities to ensure the sustainability of insurance products. Whether it’s calculating insurance premiums, estimating reserves, or designing new products, actuaries are the linchpin of sound decision-making that bolsters the industry. With soaring health care costs and property claims straining the bottom line for providers, their work is crucial.
Using their wealth of knowledge, Academy volunteers often weigh in on issues facing the insurance industry. For example, the Casualty Practice Council’s Extreme Events and Property Lines Committee commented in April on the California Department of Insurance’s proposed catastrophic modeling regulation, advising the agency “to define the settings and assumptions used for modeling risks, as there could be impacts to the output—which could lead to an unbalanced marketplace.”
Similarly, the Health, Life, and Casualty practice councils submitted a joint comment letter in March on a New York State Department of Financial Services proposal addressing the use of artificial intelligence and external consumer data in insurance underwriting and pricing. The councils noted that they all support efforts to curtail underwriting and pricing practices that “reflect systemic biases and can reinforce and exacerbate inequality.”
Given that the insurance industry is in a constant state of evolution, policy insights from actuaries are vitally important. Actuaries are able to leverage their analytic expertise to assist insurance providers in adapting to the world around them, empowering them to more effectively address affordability concerns, navigate regulatory compliance, and create new product offerings. This, in turn, makes the industry stronger and more resilient, which benefits all of us as consumers.
What’s the net impact of actuarial work for American consumers? Hopefully, affordable and accessible products that meet their needs and offer them the financial protections that insurance is intended to provide. That will help them ensure (pun intended) that they can keep themselves, and their families, more financially secure, no matter what lies ahead.
