Our thoughts

On our travels we speak to a lot of people about underwriting manual developments. One topic which comes up time and again is calculators: great invention or the work of The Devil? Some underwriting manuals have had simple calculators for many years, for example for pulmonary function tests, financial ratios and BMI, all of which are designed to help the underwriter by speeding up and simplifying assessment. In recent years calculators have increased in number and complexity. There are calculators for overall cardiovascular risk, coronary heart disease itself, breast and skin cancer, liver function tests, and even occupation risks. In…

By Dr Kevin Somerville Ah, rating tables – convenient, elegant and simple. They’ve been used for decades and even a trainee underwriter can use them. So much easier to understand than those calculators and so much easier to compare the offerings in the various underwriting manuals and complain that ratings are too high or low… Besides there’s the current mantra in the market: simplicity. Tables have the virtue of being as simple as we want them to be. Yet there’s a problem that refuses to go away: actuarial risk pricing. Actuaries price for the risk to multiple decimal places on…