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IAI Actuarial Core Principles · Business Management · Skills and knowledge for working as an actuary in financial services

Rohan, a pricing actuary at a Pune general insurer, finds that the sales director is pressing for a lower premium rate than his analysis supports. He wants to influence the decision without damaging the working relationship. Which action is most appropriate?

Rohan should present his analysis with the financial impact of the lower rate, listen to the sales director's commercial concerns, and explore alternatives. This influences through evidence and mutual understanding, preserving both the relationship and his professional judgement, unlike capitulating, escalating, refusing or delaying.

  1. AQuietly adopt the sales director's rate to avoid conflict and note his disagreement privately
  2. BEscalate straight to the CEO and bypass the sales director
  3. CPresent the analysis with the likely financial impact of the lower rate, listen to the commercial concerns, and explore alternatives such as targeted segmentsCorrect
  4. DInsist that the actuarial rate is non-negotiable and refuse further discussion
  5. Delay the pricing report until the sales director withdraws the request

Explanation

Influencing requires evidence, understanding the other party's interests and offering options. Presenting the impact and exploring alternatives keeps the relationship intact while preserving professional judgement. Giving in compromises advice, while bypassing, refusing or delaying are confrontational or unhelpful.

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