During our Chief Actuary roundtables last month, we asked over 40 Chief Actuaries where they see most engagement from their Boards with actuarial insight.
In this blog, I’ve included the headline results and explored some of the key points that came out of the discussions. There were some interesting ideas that may help you form your strategy for ensuring that your Board engages with and clearly understands your actuarial work.
Please do get in touch if you would like to discuss this topic further or would like to attend one of our future roundtables.
The importance of deep dives
Across all the attendees at the roundtables, deep dives are seen as the single best way to ensure engagement from Boards.
These deep dives are particularly valuable when presented in response to Board questions. This is consistent with what we are hearing from Boards themselves, as reported in our latest research into the virtuous cycle between actuaries and insurance Boards.
Deep dives are enabling Boards and actuaries to take a focused view on current and emerging hot topics, with more time to debate the findings and the related strategic business decisions. Chief Actuaries also commented that the more deep dives there are, the more follow-on questions they get from the Board – again, helping to build that virtuous cycle.
In addition to full deep dives, actuaries are improving engagement by sharing focused insight on key issues, from industry-wide events, such as COVID-19, through to specific internal developments in claims trends for a specific class of business. For example, this could take the form of a short presentation covering the latest position, key uncertainties and recommended further analysis. Making this available in a timely manner (rather than waiting for detailed and full actuarial analysis), and in an easy to digest format, ensures the actuarial team remains a valued business partner.
Formal presentations vs 1:1 conversations
Both formal Board presentations and informal 1:1 conversations featured highly in the poll results – in 2nd and 3rd places respectively. This emphasises how important it is to have a clear narrative to support the written actuarial work, and that the best forum for discussion will depend on the specific insurer and the particular topics under discussion.
We discussed how the preference between formal and informal conversations varied between different sized insurers. There were a range of views, e.g., that the 1:1 conversations ahead of key meetings are critical for larger insurers, where the formal meetings tend to be more structured. Actuaries from smaller insurers noted that the Board engagement came more readily, as they were working closely with Board members on a day-to-day basis.
The Chief Actuaries also commented that there is often insufficient time for proper discussion of the actuarial matters at the full Board, and they value having these discussions at a sub-committee level.
Spelling out the “so what”
Spelling out the “so what” was also an effective way to ensure strong Board engagement – in particular when there was a range of contrasting views to discuss.
One attendee commented that, when presenting differences of opinion, the Board has no choice but to engage as they have to take a view. This approach was relevant both for immediate decisions and plans for the future. Another Chief Actuary shared the example of forward-looking analysis, focused on potential developments planned for 12 to 18 months time. This approach was particularly powerful, as it presented a range of alternatives whilst there was still plenty of time for meaningful challenge. As a result, there was strong engagement and discussion.
Another Chief Actuary commented that they are looking out for the ‘ah-ha’ moments – when the actuarial insights become clear to Board members for the first time. A number of Board members, including long-standing insurance professionals, were still developing their knowledge of actuarial matters – and focusing on the implications and key decisions were making a real difference in filling these gaps in understanding.
Surprising silver linings?
There were also some key improvements to Board engagement from potentially unexpected sources.
Whilst it has been time-consuming (and not always welcome by Boards), the increasing regulatory demands on insurers over the last decade have led to a strong improvement in the level and quality of debate and challenge from the Board. This is particularly the case where regulators have asked specific questions either as part of the insurer’s regular review or in Dear CEO, Dear CRO and Dear Chief Actuary letters.
The move to remote working over the last year was also cited as a major reason for increased Board engagement. In particular, regular video conferencing has enabled Chief Actuaries to communicate more regularly and effectively with individual Board members.
As always at our roundtables, I’ve really enjoyed hearing the range of views and the wider sense of community around the attendees.
We regularly run roundtables on a range of topics, including for NEDs, CROs, Chief Actuaries, Heads of Capital and Heads of Reserving. Please do get in touch if you would like us to add you to the invite list to attend future events.