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Old 09-19-2019, 06:52 PM
actsci123451 actsci123451 is offline
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Why is Investments/ALM/Reserving more important for Life companies than P&C companies? And what do the P&C actuaries do if they aren't doing these things?
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Old 09-19-2019, 08:02 PM
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Ever heard of pricing?
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Old 09-19-2019, 08:12 PM
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Vorian Atreides Vorian Atreides is offline
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Quote:
Originally Posted by actsci123451 View Post
Why is Investments/ALM/Reserving more important for Life companies than P&C companies? And what do the P&C actuaries do if they aren't doing these things?
Take a look at the typical products each area generally works with and see just how important investment and reserving might be to each on a year-by-year basis.


Hint: How long do you have to wait after binding the policy until you have a good idea that you know everything about the real cost of that policy?
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Old 09-19-2019, 08:13 PM
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On the ALM/Investments question: This is an overgeneralization, but P&C contracts are generally for one year, while certain forms of insurance under the SOA's big tent can have contracts of significantly longer duration. ALM/Investments are important for P&C companies, but they generally don't play as big a role in valuing our reserves or pricing our products. Therefore, such matters are left to finance/investment teams rather than being viewed as a core P&C function.

Reserving is very important for P&C work, but the details are somewhat different than for life work Reserving is one of the bread-and-butter functions of P&C actuaries.

P&C products tend to evolve/change more quickly than many "life" contracts. As a result, all other things being equal, pricing and resulting state filings take up a considerable amount of actuarial resource.

That doesn't even begin to touch on all the different semi-actuarial roles that actuaries may adopt at P&C companies: product management, large account analysis, catastrophe modeling, etc.

And of course, P&C actuaries stay busy looking cool and getting their AO post counts up.
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Old 09-20-2019, 08:38 AM
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Investments play a big role on the P&C side in the determination of the underwriting profit provision to target for ratemaking. They often don't play a major role in reserving on the P&C side (as they might for a lot of life products).
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