Quadrant: Study Shows New Cloud-Based Technology Reduces Staff Labor Needed to Produce Quarterly Numbers

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Aided by tools such as Quadrant Information Services’ InsureWatch, today’s actuaries are positioned to improve risk management and trend projection in the insurance industry, as well as other areas of the economy.

Michael Macauley, CEO of Quadrant Information Services, comments on technologies effect on actuaries.

In fact, InsureWatch is a technological breakthrough that helps actuaries do their jobs better while improving the health and competitiveness of the companies for which they work.

When Quadrant Information Services introduced InsureWatch—the first cloud-based, big-data-driven competitive pricing analytics tool for the property and casualty insurance industry—a few industry observers voiced concern that technology of this sort might make actuaries obsolete. “We knew, and our customers very quickly discovered, that this is absolutely not the case,” Quadrant CEO Michael Macauley said. “In fact, InsureWatch is a technological breakthrough that helps actuaries do their jobs better while improving the health and competitiveness of the companies for which they work.”

Macauley noted that a property and casualty actuary, as defined by the Casualty Actuary Society, is a professional skilled in the analysis, evaluation and management of the financial implications of future contingent events, primarily with respect to certain risk exposures. A property and casualty actuary also has practical knowledge of how these various risks intersect with each other, as well as of the environment in which these risks occur.1 “The speed and data granularity of InsureWatch,” Macauley said, “contribute greatly to broadening that understanding.”

Advanced tools such as InsureWatch come at a time of expanding possibilities not only for insurance companies but for the entire actuarial field. Organizations of all types are restructuring their approach to risk management to effectively balance the limitation of downside risk with the exploitation of the upside potential.2

One area in which actuaries are becoming increasingly active is the development of financial products for investors—partly as a reaction to recent events. It’s been suggested that a contributing factor in the financial crisis of 2008 was an over-reliance on value-at-risk calculations that did not take into account the possibility of infrequent but large (and potentially calamitous) events, accompanied by an under-reliance on standard actuarial principles. “In the recent financial crisis,” a member of a leading European actuarial society commented, “problematic mortgages did not perform as modeled because underwriting standards deteriorated; in some cases, they were not even there.”3

“As the importance of actuaries to the overall economy increases,” Macauley said, “the importance of advanced data technology tools for actuaries will increase, as well.” In fact, he noted that the benefit of using such tools has already firmly established itself. In a recent study of a UK life insurance carrier, the results of a switch to cloud-based technology included a 95%+ reduction in the time and staff labor required to produce quarterly numbers; a 95% reduction in the number of manual processes; a reduction from hundreds of modeling and processing systems to one unified platform; expanded opportunities for business growth; and lowered operational risk.4

All of this, per Macauley, points to a better and brighter future for actuaries as such technology takes hold. “Actuaries desirous of making the most of their possibilities need to both embrace technology and seek relevant continuing education.” To help provide that education—and to help provide a steady stream of people trained for this important profession—Quadrant Information Services is developing an Actuarial Sciences program for the Actuarial Sciences department at Arizona State University that goes into effect next year.5

“We’re very pleased to be able to do this,” Macauley said. “It seems likely to us that actuarial science—the real science of risk management—will come to be the core expertise driving the financial sector in the same way that engineering is the core expertise driving the tech sector. The development of the profession is important not just for insurers, but in general for the better-run businesses of the future.”

About Quadrant Information Services:

Quadrant Information Services, headquartered in Pleasanton, CA, provides pricing analytics solutions for property and casualty insurance companies. Quadrant gives actuary, product development, pricing, sales and marketing personnel at its client companies—which include all the major insurance carriers in the United States—the data they need to make accurate, data-driven decisions. An industry innovator since its founding in 1991, Quadrant has provided the P&C insurance field with a long list of technological advances—most recently InsureWatch, the industry’s first cloud-based pricing tool, which allows the user to produce unlimited combinations of reports with the click of a mouse. For more information, and to learn why Quadrant is for insurance companies that are tired of losing the right customers and winning the wrong ones, please visit http://www.quadinfo.com.

1. “What is a Property and Casualty Actuary?” Casualty Actuarial Society, 2016. https://www.actuaries.org.uk/practice-areas/risk-management/ifoas-risk-strategy.

2. “The IFoA’s Risk Strategy,” Institute of Faculty and Actuaries, 2016. https://www.actuaries.org.uk/practice-areas/risk-management/ifoas-risk-strategy.

3. “The Importance of Actuaries,” Cypress Association of Actuaries, 2016. http://www.actuaries.org.cy/Welcome/ImportanceofActuaries.aspx.

4. Baribeau, Annmarie Geddes, “Fast Forward: Emerging Technology and Actuarial Practice,” Contingencies, July/August 2014. http://www.contingenciesonline.com/contingenciesonline/20140708?pg=38#pg38.

5. “Actuarial Science Program,” Arizona State University School of Mathematical and Statistical Sciences, 2016. https://math.asu.edu/actuary.

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