Like the name, life insurance covers risk associated with human morbidity and mortality. On the other hand P&C focuses on risks that result with loss of possessions and properties.
The CAS defines a property and casualty actuary as “a professional skilled in the analysis, evaluation and management of the financial implications of future contingent events primarily with respect to general insurance, including property, casualty, and similar risk exposures. A [property and] casualty actuary has practical knowledge of how these various risks interact with each other and the environment in which these risks occur.”
Where do P&C Actuaries work?
You’ll find P&C actuaries work in traditional actuarial departments such as pricing; where they calculate the price for an insurance premium for the policy that has not yet been sold or in reserving, where they calculate the amount to set aside as a liability to pay for the claims that will still be paid on the policies that have been sold. However, P&C actuaries also work in many other specializations such as underwriting, finance, claims, research and operations.
Some types of insurance that are under P&C are:
Auto insurance: could cover losses to property and or individuals due to unforeseen events.
Home insurance: could cover damages to properties and residences due to catastrophe, fire, theft.
Commercial insurance: similar to home, covers businesses.
Professional Liability insurance: covers loess to a professional’s clients arising from errors or omissions.
Theses types of insurance are only naming a few, there are numerous others provided by a P&C company.
Even though actuarial functions within a P&C company mirror those in a life company, P&C actuarial training is very specific. Most P&C actuaries write exams offered through the Casualty Actuarial Society, who specialize in topics related to P&C. As of recently Society of Actuaries also offered exams in P&C under their General Insurance Track.
Some food for thought: Cars are constantly improving. We’re now turning towards automated vehicles how do we price for that?!
On my blog next month, I will talk about Life Insurance actuaries!