Real-Life Decision Making
An actuary must make a lot of decisions, usually over large amounts of money.
"The wrong decision can come back to haunt you," says Scott Martin, an actuarial analyst with a motor vehicle insurance company.
You are an actuary, and have recently finished your studies. You've got a good job working with a well-respected insurance company.
You've been doing some work on the earthquake insurance policy. You've figured out that the rates should go up. Yet the president of the company doesn't agree with you.
The president isn't an actuary, but he has worked in the insurance industry for 40 years. He knows that a sudden change in premiums could cause problems. Plus, he's convinced that the company is charging adequate premiums for earthquake insurance.
Your statistics and figures tell you that the president is making a big -- and potentially expensive -- mistake.
You could push the issue and confront the president with his error. But he might take it personally and fire you.
You also know that you can't just sit there and do nothing. Eventually, some other actuary will notice the error and you will look like you haven't done your job. Or, there will be an earthquake and then all the fingers will be pointing at you.
What do you do?