Integrating Actuarial and Underwriting Disciplines to Improve Underwriting Outcomes

This paper will present a practical method of integrating Actuarial and Underwriting objectives, with an emphasis on achieving correct rates, correct pricing, and correct reflection of individual risk characteristics in the final premium. It will discuss how implementing these in an insurance operation can improve synergy between the underwriting, actuarial, claims, and marketing functions of the company. The approach described relies on a meaningful segmentation of the book of business. By its nature the insurance business is an underwriting business, so integrating actuarial and underwriting approaches should be a natural goal of the Actuaries. This paper contributes to the literature with powerful yet practical techniques practitioners can quickly employ.