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

When preparing to influence a finance director who focuses mainly on capital efficiency, which preparation step is most useful for an actuary proposing a new reinsurance arrangement?

The actuary should frame the proposal around capital required and return on capital, backed by clear figures, because influence works best when linked to the listener's own priorities. Technical derivations, seniority, competitor popularity or benefits to unrelated teams do not address the finance director's concern.

  1. AFrame the proposal around its effect on required capital and return on capital, supported by clear numbersCorrect
  2. BDescribe the reinsurance model's mathematical derivation in full detail
  3. CEmphasise the actuary's seniority and experience
  4. DFocus on how popular the arrangement is with competitors
  5. Stress the benefits to the claims department only

Explanation

Effective influence links the proposal to the audience's own priorities. Capital efficiency is the finance director's concern, so evidence on capital and return is persuasive; technical detail, status or irrelevant benefits are not.

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