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Utilizing Independent Actuarial Resources to Gain a Competitive Advantage

Oceanus Partners

Oceanus Partners recently published an article titled, “Utilizing Independent Actuarial Resources to Gain a Competitive Advantage.”  The article provides an excellent summary of analytics as a differentiator.

On August 30th, SIGMA will participate in an open webinar hosted by Oceanus Partners to discuss the actuarial advantage.  Please REGISTER NOW for the webinar.  For your convenience we have included the article below:

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Utilizing Independent Actuarial Resources to Gain a Competitive Advantage

By Christina Boussias, Communication Specialist
Do you want to differentiate in the marketplace, and gain the capabilities to write and retain larger accounts? In today’s world, as technology continually evolves, data analytics and data mining models are emerging as powerful tools that are greatly impacting industries across the board. In our industry, where most agents aren’t effectively positioned to win large accounts, or are afraid to rock the boat with their existing clients, those who utilize actuarial resources to leverage these tools have a compelling advantage over their competitors. Past performance is often very indicative of future performance, and actuaries can use a combination of data analysis and experience to help forecast and evaluate risk related exposures and how they might impact employers. Have you considered aligning with an actuarial resource to develop a mutually valuable strategic partnership? If you answered no, and you want to bring leadership to your large account strategy, it may be time to reconsider.

What an Actuary Can do for You

Why is it important to have a strong actuarial resource? Many agents know that they have some clients that need actuarial work, but because they don’t have an actuarial resource they tend to put off addressing that need. In turn, they open the door for another agent to step in with a solution. For example, let’s say your client has grown beyond their guaranteed cost program, and another agent comes in and presents a Large Deductible. Even though this may not be the best solution for the client, they are more likely to leave you when it’s the only other option they are presented with. Defending and protecting your largest and most profitable accounts is more important than ever, and utilizing actuarial resources to have a discussion about alternative financing options allows you to lay the groundwork for your client to choose the right program, as opposed to falling for your competitor’s sales pitch. You need resources to support your communication efforts with your clients that allow you to quantify the risk they’re taking and the potential variability in their losses. If you know there may be a good opportunity to bring in data analytics, don’t avoid the topic, instead, leverage an actuarial resource to be sure there is a good flow of communication and support to your existing clients around this topic.

It’s clear that there is a large opportunity to defend your existing accounts using actuarial resources, but the best defense is a good offense. And, if you’re avoiding the actuarial topic, it may be limiting the growth of your agency. Supporting materials and education for producers who aren’t comfortable talking with CFO’s can be used to have a more consultative discussion. For example, let’s assume an agent is having a discussion with a CFO whose company has just switched to a loss sensitive program, but their current agent hasn’t addressed how it’s going to affect their cash flow and the impact of their collateral requirements. In a reversal of the example above, this agent uses an actuary to estimate the loss that the prospect should expect, and more importantly, how it will be spread out over time. It’s a conversation the CFO has never had with any other agent. Additionally, during the sales process, if you’re talking to a prospect whose current program wasn’t analyzed the way it could and should have been there is a huge opportunity for you to step in with leadership and support. Clients today expect their agents to show analytical capabilities, and independent actuarial resources make analytics deliverable. The accounts you want to target—larger, more profitable accounts—often require actuarial support. What if you had the confidence to target prospects that are at the highest level your agency’s capabilities can address? Build a partnership with an actuary to use as a valuable resource, and you can go after the best accounts.

* Coomer, Timothy. “An Actuarial Advantage: Maximizing the Benefit of An Actuarial Analysis.” SIGMA Actuarial Consulting Group.

We welcome your feedback by posting a comment, or contact me at  TLC@SIGMAactuary.com. If you have not registered for access to our resource portal, you can do so at  www.SIGMAactuary.com/register. Registration is quick, easy, and access to all of our resources is free.

© 2013 SIGMA Actuarial Consulting Group, Inc.

 

 

 

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Timothy L. Coomer, Ph.D.

About Timothy L. Coomer, Ph.D.

Dr. Coomer has a Bachelor of Engineering Degree with a double major in Mechanical Engineering and Mathematics from Vanderbilt University. He holds a Masters in Business Administration with a concentration in Finance from the Owen Graduate School of Management at Vanderbilt University and received his PhD from the Spears School of Business at Oklahoma State University. He founded Specific Software Solutions, LLC (1990) and developed the ModMaster Suite of software products. Dr. Coomer also co-founded SIGMA Actuarial Consulting Group, Inc. (1995). He presently serves as Chief Executive Officer of SIGMA and retired from Specific Software Solutions, LLC in 2010 after selling the business to Zywave, Inc. Dr. Coomer is now focusing on leading SIGMA’s RISK66.com effort along with traveling to meet brokers and clients around the country.

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