Skip to content

IAI Actuarial Core Principles · Business Management · Communicating strategy; culture and structure in decision making; strategy case studies

Kaveri Assurance has a strong, informal culture in which senior actuaries make important pricing decisions through personal networks, rarely documenting them. A new Chief Actuary wants more transparency and consistency. Which approach best fits that aim while retaining accountability?

A documented governance process with defined roles, delegated limits and recorded rationale best delivers transparency and consistency while keeping accountability. Verbal updates, independent unreviewed decisions, sales-led pricing or an outright ban would not provide a reliable, accountable and workable decision framework.

  1. ARetain informal decision making but ask seniors to share verbal updates
  2. BMove pricing decisions to a documented governance process with defined roles, delegated limits and recorded rationaleCorrect
  3. CTransfer all pricing decisions to the sales team
  4. DLet each actuary decide independently without review
  5. Ban pricing decisions above a fixed premium size

Explanation

Documented governance with defined roles, limits and recorded reasons creates transparency, consistency and an audit trail. Verbal updates leave no record, independent decisions reduce consistency, sales control creates conflicts of interest, and banning large decisions is unworkable.

Did you get it right without looking?

One question tells you little. A timed set on Communicating strategy; culture and structure in decision making; strategy case studies shows your real accuracy, how long you take and where you lose marks.

Practise Communicating strategy; culture and structure in decision making; strategy case studiesFree diagnostic mock

More Communicating strategy; culture and structure in decision making; strategy case studies questions