On this blog post, I choose to analyze three articles from "The Actuary;" a magazine relating to information pertaining to actuarial work. I selected the December 2013/January 2014 Issue and the article, “ Big Data: How is it Collected and How Might Life Insurers Use?” I found this article particularly interesting in regards to the basic nature of the life insurance industry. It seems apparent that actuaries need information in order to make informed decisions regarding the price of policies and premiums. However, the source of this information can be questionable. The article explains that mass-information sources is a relatively new technique used by life insurance companies. It also says that technology companies are often the ones to gather crucial information about people. Some of this information may include health risks, body measures, shopping preferences, etc, information that the life insurance industry could use to better predict any misfortune. However, companies life Facebook, Google and Amazon are often, and logically, the ones that use this information before any other company since they are the ones with massive gathering tools. This, in turn, helps these companies positively by offering better products to their clients. Companies, like the Life Insurance Industry, have a disadvantage because they rely on information from the aforementioned companies to make better business decisions. By the time they received this information, it may have become outdated or obsolete. The question I wonder now is whether or not the Life Insurance Industry should pursue obtaining its own massive information gathering tools by itself rather than relying on social media, or online-shopping websites. If yes, this would bring a lot of benefits to the industry. Some of these include faster and perhaps better decisions that could impact their business positively. Furthermore, this would also allow life insurance companies to quickly react to the changing of price of their companies. The questions remains as to how life insurance companies can start doing this and if this strategy would be cheaper in the long run compared to buying this information from other sources.
The second article I selected comes from the same issue as the previous one, from the December 2013/January 2014 issue and it is called “The SOA Research Portfolio: A Profitable Investment.” I found this article to be particularly interesting n the sense that it is fully related to the real world. By this I mean, that this article is related to investments done by the SOA. Some of these investments are focused on the complexity science and behavioral finance, regulatory risk for insurers, risk adjustment bias in health insurance exchanges, a climate change index and more. The article contends that these investments will bring a positive return to the SOA since they are valuable investments. I believe so too. I believe that the SOA should focus in non-traditional fields related to the Actuary Field such climatology such as developing an index that can be used as a resource for actuaries and others to develop predictive models and other risk management strategies related to climate change. This would a valuable piece of information since it could help Life and Casualty insurance companies predict any contingencies caused by the weather. Furthermore, the SOA has also invested in a research proposal to study to the effects of the controversial Affordable Care Act. I am very interested about the results of this research, which I believe may have come out by now. Being someone who believes that health care is a right and not a commodity; I am a supporter of the A.C.A. However, from the actuarial side, actuaries have to make the necessary calculations to see if the Affordable Care Act is in reality affordable. I will be keeping an open eye for the results of this research.
The third article I selected is from the June/July 2012 edition. The name of the article is “Actuarial Thinking: Knowing When To Avoid Left Turns.” This article was the most interesting article of the three. It deals with what I believe to be the core of the actuarial business: decision making. The article starts with a simple yet powerful idea: that delivery trucks should avoid left turns, which saves time and money. This idea is so powerful because it must have taken a lot of research in order to discover that avoiding left turns saves time and money. It would have taken someone to notice this idea, someone to collect traffic information, and someone to test this information. The process seems straight and simple, yet it must have taken quite a while to discover. This is where actuaries come in. Their ideas allow them to use their ideas and implement them in the real world. The article also points out that most actuaries lack stronger statistical techniques necessary to analyze the information collected that is transformed into understandable date. Even though when these actuaries have the necessary skills, they lack the ability to transmit these information to the less mathematically skilled people. I believe this is a crucial point; the most valuable actuaries are those that can communicate their ideas clearly to those who don’t have these skills. Furthermore, the article also discusses the idea of heuristic process, which are rule of thumb that other actuaries can use. This is an important idea. These heuristics process can be used by other actuaries to help them identify problems. Overall, I though the article was enlightening in the sense that it demonstrated that actuaries require more than math skills, they also require the ability to communicate clearly and efficiently.
As a summary, I found these articles to be very informational about the actuary career. They taught me more about what an actuary could do and where they are needed, which proves that there is a demand for their skills and that it is worthwhile to pursue this career.
The second article I selected comes from the same issue as the previous one, from the December 2013/January 2014 issue and it is called “The SOA Research Portfolio: A Profitable Investment.” I found this article to be particularly interesting n the sense that it is fully related to the real world. By this I mean, that this article is related to investments done by the SOA. Some of these investments are focused on the complexity science and behavioral finance, regulatory risk for insurers, risk adjustment bias in health insurance exchanges, a climate change index and more. The article contends that these investments will bring a positive return to the SOA since they are valuable investments. I believe so too. I believe that the SOA should focus in non-traditional fields related to the Actuary Field such climatology such as developing an index that can be used as a resource for actuaries and others to develop predictive models and other risk management strategies related to climate change. This would a valuable piece of information since it could help Life and Casualty insurance companies predict any contingencies caused by the weather. Furthermore, the SOA has also invested in a research proposal to study to the effects of the controversial Affordable Care Act. I am very interested about the results of this research, which I believe may have come out by now. Being someone who believes that health care is a right and not a commodity; I am a supporter of the A.C.A. However, from the actuarial side, actuaries have to make the necessary calculations to see if the Affordable Care Act is in reality affordable. I will be keeping an open eye for the results of this research.
The third article I selected is from the June/July 2012 edition. The name of the article is “Actuarial Thinking: Knowing When To Avoid Left Turns.” This article was the most interesting article of the three. It deals with what I believe to be the core of the actuarial business: decision making. The article starts with a simple yet powerful idea: that delivery trucks should avoid left turns, which saves time and money. This idea is so powerful because it must have taken a lot of research in order to discover that avoiding left turns saves time and money. It would have taken someone to notice this idea, someone to collect traffic information, and someone to test this information. The process seems straight and simple, yet it must have taken quite a while to discover. This is where actuaries come in. Their ideas allow them to use their ideas and implement them in the real world. The article also points out that most actuaries lack stronger statistical techniques necessary to analyze the information collected that is transformed into understandable date. Even though when these actuaries have the necessary skills, they lack the ability to transmit these information to the less mathematically skilled people. I believe this is a crucial point; the most valuable actuaries are those that can communicate their ideas clearly to those who don’t have these skills. Furthermore, the article also discusses the idea of heuristic process, which are rule of thumb that other actuaries can use. This is an important idea. These heuristics process can be used by other actuaries to help them identify problems. Overall, I though the article was enlightening in the sense that it demonstrated that actuaries require more than math skills, they also require the ability to communicate clearly and efficiently.
As a summary, I found these articles to be very informational about the actuary career. They taught me more about what an actuary could do and where they are needed, which proves that there is a demand for their skills and that it is worthwhile to pursue this career.