Judgmental Topics In P&C Companies: Findings from a Prediction Survey
By Joseph Lo, Nita Patel, Alan Calder
Interaction with actuarial models by both actuaries and non-actuaries is inevitable and requires careful study so that these models may better serve their purpose. Yet empirical and scientific investigations into how experts make their judgments are rarely reported in actuarial science literature. This paper discusses findings from a prediction survey, whose 120 respondents in a global Property and Casualty (“P&C”) company were nearly evenly split between underwriters and analysts (e.g., actuaries, risk managers, and finance). The hypothesis that underwriters and analysts tend to give different quantitative judgments under similar levels of information and incentivization was tested. Of the four one-step prediction problems, none gave evidence to support this hypothesis.
Keywords: Expert judgment, cognitive heuristics, cognitive biases, availability heuristic, outliers