As the insurance industry continues to evolve at an unprecedented pace, firms are reviewing their front, middle and back-office functions to support growth strategies and deliver against business objectives. Insurance leaders acknowledge the important role of the actuarial function, as they look to improve processes, enhance risk strategies and deliver operational excellence.
The actuarial function is central to the insurance proposition. Actuaries not only allow insurers to properly assess and price policy risk, but they also play a key role in helping insurance organizations manage their own enterprise risks and opportunities and optimize capital. In addition, leaders are looking to their actuaries to expand their support into evolving areas such as quantifying ESG risk, financial planning and analysis enhancements, artificial intelligence (AI) integration and identifying new market opportunities. Insurers want their actuaries to be delivering better insights, across a broader range of topics that are more aligned to the business.
In this report, KPMG insurance professionals explore some of the drivers for actuarial transformation in today’s market, identify the opportunities and barriers, and share key considerations to help insurance organizations on their transformation journey.
Actuaries hold a unique position within insurance companies. They understand financials, underwriting, product design, distribution channels and risk, while possessing the ability to tell a story. Now that they have largely achieved compliance with IFRS 17, Solvency II and other standards, they’re at a pivotal stage where they can shift their attention to propelling the business forward and navigating their companies through the broad range of risks faced.
Laura Gray
Global Head of Actuarial and Partner
KPMG in the US
How can actuaries get organizations closer to the customer?
The actuarial function can help insurance organizations unlock deep insights into their customers and enhance customer experiences. Actuaries are using enterprise data to better calculate customer lifetime value, enabling the business to tailor their strategies based on value. Others have used their data science capabilities to more accurately segment their customer markets in order to shape their marketing efforts.
Making this a reality, however, will require four things to come together — perspective, data, skills and technology. Actuaries will need to understand what insights the business requires in order to drive their strategy; they will need the right data, skills and capabilities to help them unlock those insights; and they’ll need the right technologies and tools to help the business visualize and understand the insights they are providing.
Five considerations when modernizing the actuarial function
Transformation never stops. Neither do we.
KPMG professionals believe transformation starts with people. Our global network of experienced insurance professionals provides clients with deep industry knowledge, actionable insights and implementation expertise, helping to realize the full potential of their people and technology, and working together to achieve successful transformation. Because when people and technology are in harmony great things happen.
Making a world of difference
KPMG people can make all the difference on your transformation journey. Together we can help you to orient your business around the customer, optimize functions for a new era, manage enterprise risk and regulation for a safer future, rise to a new level of value creation, and create an environment for managing ongoing change.
Contact your local KPMG member firm to learn more about how KPMG can help you successfully transform your actuarial function.
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Laura Gray
Global Head of Actuarial Insurance and Partner
KPMG in the U.S.
Vjaceslavs Geveilers
Partner, Financial Services, Head of Actuarial Services – EMA, Head of Actuarial Data Science
KPMG in Germany
