Pricing and underwriting are critical aspects for the effective functioning of the property/casualty insurance industry. Successful companies recognize the need for a strong connection between these areas and how one may impact the other. This connection can include having actuaries working in the underwriting function.Executive SummaryFor an insurance company to be highly successful, underwriting and pricing must be in lockstep from a strategic and tactical standpoint, and a proven way to make that happen is to have actuaries become part of the underwriting function, writes Pinnacle Consulting’s Greg Frankowiak.
Based on my experience and observations, there are a number of positives that both actuaries and underwriters can achieve from this close connection. Conversely, there are also some challenges that may need to be overcome. Let’s take a look at both sides.
The Benefits
Property and casualty insurance, especially personal lines automobile, is a highly competitive business and has only grown more so over the past several years.