IAI Actuarial Core Principles · Business Management · Skills and knowledge for working as an actuary in financial services
An actuary at a Mumbai life insurer must explain to the board, none of whom are actuaries, why the new pricing basis raises premiums for older entrants. Which approach is most likely to communicate effectively?
The best approach is to lead with the main conclusion and its financial impact, give a short plain-language reason, and offer more detail on request. This suits a non-actuarial board, whereas jargon, raw derivations or omitting the premium rise would obscure the message.
- APresent the full derivation of the mortality graduation, so the board can see all the technical work
- BStart with the key conclusion and its financial impact, then give a brief plain-language reason and offer detail on requestCorrect
- CSend the technical report unchanged and ask members to raise questions afterwards
- DUse actuarial terms throughout to show the rigour behind the analysis
- Leave out the premium increase and describe only the methodology
Explanation
Non-expert audiences need the conclusion, its impact and a simple rationale first, with supporting detail available. Dumping technical derivations or jargon hides the message, and omitting the premium effect would be misleading.
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