Back to Basics
Technology is a wonderful thing for the insurance business.
However, we tend to use technology to make our products and services more complicated. Increasing complication creates more opportunity for basic errors. Unfortunately, I’ve been seeing more and more basic errors with my clients recently.
One of the challenges has been tracking policies in force. If we start with the policies in force at the beginning of a period, add the policies issued during that period, and subtract the policies cancelled during the period, we should get the policies in force at the end of the period. When that’s not true then you start asking a few questions.
You find out that some old policies had not been charged the fees that they should have. When the back fees were charged the policies had no remaining value and they were cancelled. However, they did not show up on the normal list of cancelled policies. There was a special list of cancelled policies for this program. This is the kind of thing that can ruin an actuary’s whole day.
