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IAI Actuarial Core Principles · Business Management · Using data, company functions, people skills, influence and clear communication

An actuary at an Indian life insurer must persuade a sceptical sales head to accept a lower commission on a savings product. Which approach is most likely to gain genuine buy-in?

The best approach is to present the data openly, explain how the change benefits the sales head's own goals such as sustainable distributor earnings, and listen to concerns before finalising. This builds commitment, whereas authority, escalation, selective data or surprise damage trust.

  1. APresent the pricing data, explain how the change protects long-term distributor earnings and the product's viability, and invite the sales head's concerns before finalisingCorrect
  2. BSend a formal email citing the actuarial department's authority and set a deadline for acceptance
  3. CEscalate immediately to the CEO to override the sales head
  4. DShare only the figures that favour the reduction so the case appears stronger
  5. Wait until the product is launched and then present the result as a done deal

Explanation

Influence built on evidence, a clear benefit to the other party and two-way dialogue produces commitment. Relying on authority, escalation, selective data or fait accompli may bring compliance but erodes trust, and selective data is also unethical.

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