Communicating Risks Flashcards
Summarise the qualities actuarial communication must have
Must be appropriate to the particular circumstances, taking into account the intended users.
Clear and use language appropriate Unambiguous
Must be relevant to the task.
Give an example of when you may not be dealing with communication to people in finance in an actuarial role
Dealing with members of public for communicating with pension scheme members
To communicate effectively what do you need to know your client
Their level of understanding
The barriers they might have in accepting what you say Ex: Might have difficult messages
Who might support your idea,
who might be against it
The key decision-maker’s priorities and concerns
Anything you should avoid talking about
Define the actuarial report
Actuarial Report—The set of actuarial documents that the actuary determines to be relevant to specific actuarial findings that is available to an intended user. It is subject to actuarial standards. Should be completed if the actuary intends the actuarial findings to be relied upon by any intended user.
What must be detailed in the actuarial report and what are key traits of the report.
Includes: the actuarial findings methods, procedures, assumptions and the data used.
May be in several different formats.
Actuary should communicate which documents comprise the report.
These should be of sufficient clarity that another actuary can reproduce what you have done
Should have clear identification of the actuarial report itself and the responsible actuary
List the Disclosures in Actuarial Reports
The intended users
Scope and intended purpose
Identification of the signing actuary;
Any cautions about risk and uncertainty
Any limitation or constraints on the use or applicability of the actuarial findings
Information on which the actuary relied that has a material impact on the actuarial findings for which actuary does not assume responsibility
The effective date of report
Subsequent event(s)if have a material effect
Any conflict of interest
Additional disclosure requirements
the documents comprising the actuarial report.
Why is oral communication important and how to approach it
Oftentimes people don’t read reports - they’re only for if something goes wrong. Mostly rely on oral communication
Approach your meetings and presentations with the client as conversations
But try to get audience to ask questions
Name some actuarial biases
Study a world where “all human experience is monetised”.
Conservative
Prudence
Equity: A belief in underwriting risks to set an actuarially fair premium.
Anti-human rights
Anti-consumerism
Collective before Individual
Explain conservative actuarial bias
Be aware people may not want stability or the status quo.
Explain equity actuarial bias
A belief in underwriting risks to set an actuarially fair premium. A belief in equitable distribution of surplus.: Idea that if you can’t discriminate on all aspects of risk and characteristic of risk then you can’t set ‘fair’ premiums. This was proved wrong in the gender directive!
Explain the anti human rights actaurial bias
Profession campaigned for right in actuarial applications to discriminate on the basis of gender, racial origin, disability, sexual orientation…so favoured statistical discrimination. Ex: Idea of ramps for disabled access - by actuarial premiums or actuarial fair idea would have people paying for the construction of the ramp, cross subsidy
Explain anti consumerism actuarial bias
Profession often hostile to consumer empowering legislation
Explain collective before individual bias
Concerned with policyholders as a group, scheme members as a group, etc. and not as individuals. Other Professions put the individual before all other considerations but not actuaries. Ex: continuation of actuarial jobs over the good of individual
Name four types of communication
Director style
Strategist style
Presenter style
Mediator style
Why is important to acknowledge biases
Key to bear in mind the biases I have and the elements of what I’m comfortable with which are affecting my communication.
