The Actuary October/November 2018

60 Pages·2017·7.16 MB·English

VOLUME 15 ISSUE 5
OCT
18
NOV
THE COOL FACTOR
More than machines
Seeking simplicity
Picture of health

THE
VOLUME 15 ISSUE 5
OCT
18
14
NOV
36
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CONTENTS
FEATURES
14 30
MORE THAN MACHINES PICTURE OF HEALTH
The evolution of the actuary through automation Electronic health records have the potential to disrupt
By Darryl Wagner, Tony Johnson, Nate Pohle and and improve the underwriting process
James Dunseth By Jeff Huddleston, Jeevan Duggempudi and Chris Stehno
22 36
THE COOL FACTOR UPPING YOUR GAME
Applying actuarial skills beyond the walls of an How to use behavioral economics to optimize
insurance company decision-making and become a better actuary
By Lauren Minches By Kurt J. Wrobel
26 44
SEEKING SIMPLICITY DREAM BIG
The InsurTech revolution strives to create the best Q&A With Albert Moore, ASA, MAAA, second vice
possible customer experience president of Illustration Architecture & Development
By Mark A. Sayre at Ohio National Life Insurance
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SOA PRESIDENT CREATIVE SERVICES
Mike Lombardi
FSA, CERA, FCIA, MAAA
52
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6 FROM THE PRESIDENT or the respective authors’ employers.
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Industry Briefings and SOA News
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FROM THE PRESIDENT
The Actuary
Looking Back
(and Forward)
erendipity is the phenomenon of finding same profession and we face the same challenges.
S
valuable things while seeking something During visits to actuarial clubs; employer visits;
else. In many ways, it has been a serendip- conferences; and meetings of the SOA, the Inter-
itous year. national Actuarial Association (IAA) and other
Many of you know that I previously served as actuarial organizations, many of you shared your
president of the Canadian Institute of Actuaries thoughts and ideas about how to move the profes-
(CIA) and that my employment background sion forward.
included working for insurance companies, con- Throughout the year, I also stressed the need to
sulting firms and reinsurance. That exposure to the maintain our relevancy as a profession. Technology
actuarial profession in the United States, Canada, startups are making a dent within InsurTech. Arti-
Europe and Asia provided a very broad perspective ficial intelligence is here. Data science is constantly
and demonstrated to me just how varied, vibrant improving. Models and management of risk are what
and successful our profession has been. we know and do best. We must either learn how to
During my year as president of the Society of harness these developments more efficiently to do
Actuaries (SOA), I devoted most of my time to our jobs, or we risk someone else taking the lead.
strategy, education topics, issues involving other Our subject-matter expertise is the foundation
practice areas and relations with other organi- of our strength as a profession. In addition to our
zations—and there were quite a few challenges, subject-matter expertise, our other great collec-
indeed! A lot of progress was made in each of those tive strength is our commitment to volunteerism.
areas, and I would like to We are here today as a successful and respected
thank all those on the SOA profession thanks to those who came before us.
Board of Directors, the We stand tall because we stand on the shoulders of
SOA staff and the many giants—actuarial pioneers who devoted their lives
tireless volunteers who to ensuring the profession we enjoy today would
helped make this progress grow and thrive. We owe a huge debt of gratitude
possible. to them and to all the many tireless volunteers for
But the work of build- their contributions.
ing a great profession is As SOA members, you, I, we—all of us collec-
MIKE LOMBARDI, FSA, never done—the work tively—play a key role in shaping our common
CERA, FCIA, MAAA,
must go on. In a larger future. We face two roads ahead of us—one of
is president of the
sense, this task goes well threats, doubts and fears; the other of opportunity,
Society of Actuaries.
beyond me—and well confidence and excitement.
He can be reached
beyond the SOA Board. Let us resolve, together, to choose the brighter
at mlombardi@soa.
Regardless of our home path and focus on making our profession even
org. Find him on
LinkedIn at bit.ly/ country or practice areas, more successful and vibrant in the years to come.
MLombardiSOA. we are members of the Thank you.
6
OCT/NOV 18 | theactuarymagazine.org
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EDITORIAL
TThhee AAccttuuaarryy
Modern Day
Technology Tales
BY SARAH HINCHEY
DIGITIZATION, Emerging Tools and industry, it only makes
MODERNIZATION, Technology to Modernize sense that actuaries play
TRANSFORMATION: the Actuarial Function a prominent part in the
These are some of the The article “More Than growing InsurTech mar-
Traditional terms used to describe Machines” brings to life ketplace. This year, we
the changes the financial how cognitive technologies continue the “actuaries in
distribution
services industry is including AI, machine InsurTech” theme with
models, undergoing globally. learning and robotics two articles from actuaries
Traditional distribution have the potential to working at New York–
product designs
models, product designs fundamentally change the based startups.
and business
and business processes future of work for actu- In the article “The Cool
processes are being challenged aries, enabling actuaries Factor,” you will hear
by new “born-digital” to deliver greater value firsthand from one trail-
are being
InsurTech/FinTech start- for and improve partner- blazing actuary who has
challenged by ups and growing consumer ships across their broader taken her career to new
new “born- expectations. Companies organizations. Benefits of heights at a startup that
are rapidly adopting new the optimization of the is reinventing the income
digital” startups
technologies such as actuarial role are discussed, annuity by using modern
and growing artificial intelligence (AI), as well as educational and day technology to make it
robotics and process auto- professional implications. easier for people to save
consumer
mation to fuel change and for retirement. Her story
expectations.
innovation. This issue of Actuaries in InsurTech is a great inspiration for
The Actuary explores some Given the historical role how actuaries can leverage
of the emerging trends in of actuaries as the “engi- their skill sets to succeed
the industry. neers” of the insurance in nontraditional roles.
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OCT/NOV 18 | theactuarymagazine.org
The Actuary
In the article “Seeking widespread digitization of grounded in behavioral whole—by stepping outside
Simplicity,” you will hear health records has inciden- economics to achieve of our comfort zones and
from a pioneering actuary tally created opportunities their goals. In the article continually expanding our
who is taking a ground-up for life insurers to improve “Upping Your Game,” knowledge and skill sets
approach to reimagine the their customers’ experi- the author gives readers a across new tools, technol-
customer experience at a ences by utilizing electronic background in behavioral ogies, roles and ways of
startup life insurance agency health data to modernize economics principles and working. Enjoy the issue!
that is recognized across their new business, discusses how to apply
the industry as a leader underwriting and claims them to help organizations
in customer experience management processes. The improve decision-making.
excellence. As the head of article “Picture of Health”
policy design, he shares his provides a background on Wrapping It Up
perspective on adapting to this emerging data source in I hope you enjoy reading
startup life and some of the life insurance while high- the articles in this issue of
challenges he has overcome. lighting a specific example The Actuary. They have
of one insurer’s experience been sourced to cover a
New Data Sources Create and lessons learned through wide variety of technology
New Opportunities an electronic health data and innovation-related
Regulatory changes and pilot project. topics, and collectively the
incentives have accelerated authors provide a clear ABOUT THE WRITER
efforts in the health care Behavioral Economics demonstration that we can
SARAH HINCHEY, FSA, CERA,
sector to digitize the col- Some organizations are continue to develop our-
MAAA, SCPM, is a manager for
lection and storage of, and pairing new tools and selves as individuals—while Deloitte Consulting in San Jose,
patient access to, patient technology with business building the reputation California. She can be reached
health care data. The models and solution designs of the profession as a at  [email protected].
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NEW NOTEWORTHY
The Actuary
Actuary of the Future Section Update
interviewing actuaries from different backgrounds and
Earlier this year, the Actuary of the Future (AOF) career paths. Additionally, we have an internship program
Section Council had an all-day in-person meeting at for students and candidates looking to join the AOF Sec-
the Society of Actuaries (SOA) office. This meeting tion Council.
was long overdue, as most council members had never Our offerings for experienced actuaries include sessions
met each other in-person before. The meeting proved at SOA meetings, such as the SOA Annual Meeting &
to be invaluable in building bonds within the council Exhibit, Health Meeting, Predictive Analytics Symposium,
and generating discussions to better serve our section and Life and Annuity Symposium. We also host webcasts
members. The two main portions of the meeting were that count toward continuing professional development
to review existing frameworks and brainstorm new (CPD) requirements and are free to members one year
ways to bring value to our members. The council is after their release date.
excited to bring the renewed vision to life. The AOF is in the unique position to present a wide
Here is what the AOF Section can offer to SOA range of topics and bring a diverse audience together.
members, students and candidates: The Section Council is committed to serving its members
as best it can and welcomes all feedback and suggestions.
We aim to keep actuaries at all levels current with If you are looking for a place to start getting involved
the latest advances. with the SOA, look no further. Join the AOF Section today,
We discuss topics ranging from exam preparation, and better yet, volunteer with us!
job search and career development to industry trends
and everything in between.
ABOUT THE WRITER
We publish newsletters that showcase ideas and
EMILY HSU, FSA, CERA, ACIA, is a senior assistant actuary at Sun
perspectives from different authors.
Life Financial. She can be reached at [email protected].
We send out a monthly “AOF Hot Topics” email
with summaries to a curated list of news articles.
We collaborate with other sections to bring you
exciting events such as a speculative fiction contest
and networking mixer.
For college students and candidates, we host web-
casts that teach about the actuarial profession from a
panel of working actuaries. We also produce podcasts
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OCT/NOV 18 | theactuarymagazine.org