Strategic Issues: Moving Beyond the Point Estimate

There are usually many issues raised in the course of performing actuarial analysis for a property/casualty insurance company. There are numerous ways in which all-important subtleties and implication of the work performed can be lost. In the most extreme case, this might involve either the author or the audience of the work (or both) taking away a point-estimate without having an appreciation of either the alternative business arrangements that may be more suitable under the circumstances, or the possible strategic implication of the work which could lead to enhancing the intrinsic value of the insurance company. This paper explores some of these issues in detail. We illustrate our paper by examples drawn from a number of actuarial appraisal, loss reserving and ratemaking engagements which we have conducted in the past, outlining issues that the actuary may wish to consider as any adjunct to "traditional" actuarial analysis. Clues to addressing these issues are often evident in the actuarial database but require in-depth probing. We believe that such consideration is essential if actuaries are to broaden their role and become insurance company "business-managers". Other key words: management information, strategy.