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The Actuary The magazine of the Institute & Faculty of Actuaries

Actuaries and healthcare

But there will be more appropriate refreshments and entertainment at the launch of the Faculty and Institute’s modules in healthcare, on 17 January 2001 at Staple Inn (a date for your diary). The event will start at 5pm and last for about 90 minutes.
If you were at the 2000 Health Care Conference in Torquay, you will appreciate the roles that actuaries play in managing different aspects of healthcare business. With mathematical expertise, detailed product knowledge, a thorough understanding of the way an insurance company runs, and up-to-date market awareness, actuaries are vital to the success of any venture in the field of healthcare.
The number of actuaries working in healthcare has risen steadily in recent years, and is likely to rise further as economic and demographic realities affect the market for health care products.
In ‘Vision and Values of the Actuarial Profession’, it is stated that:
– we are a profession that can provide solutions to any problem involving financial risk and contingent events, especially where quantitative techniques can be applied; and
– we are increasingly involved in an ever-widening range of businesses where we have insight and are able to fulfil technical, managerial or directorship roles.
But actuaries working in the less traditional areas need the support of the profession. Currently there is no specialist examination in healthcare, although healthcare products warrant a mention in the life and general insurance syllabuses. This means that students and qualified actuaries who want to specialise in healthcare have to learn mainly on the job or by reading past technical or research papers.

Development of healthcare modules
It has been felt for some time that the profession should do more to support actuaries working in healthcare, either through a fellowship level examination or through continuous professional development (CPD) opportunities. Some important progress has been made, for example the Health Care Conference gives actuaries and non-actuaries the chance to learn about the latest developments in the industry, and there are now excellent practitioners’ guides to private medical insurance (PMI) and income protection on the Institute’s website. But there has been no purpose-built detailed written material that students and actuaries can use.
Now the profession has produced easy-to-read material that provides a valuable resource for anyone (including non-actuaries) wanting an insight into healthcare work. The material is in the form of five modules, covering the following areas:
– Income protection insurance
– Private medical insurance
– Critical illness cover
– Long-term care insurance
– Underwriting and genetics
Each module has been written by one or more experts in the field, and reviewed by an independent expert. The whole project has been overseen by the Health Care Committee of the Social Policy Board. The material is not technically detailed (it is at roughly the same level as core reading for the 400 series examination subjects), but includes material needed to obtain an initial understanding of the subject.
Typically, the product-related modules include the following topics:
– Development of the product
– The current market
– Variations on the product
– Particular risks that the product raises
– Regulatory issues
– Underwriting and claims control
– Experience monitoring
The underwriting and genetics module is more general and covers ‘what healthcare actuaries need to know about underwriting and genetics to be able to do their job’.
Detailed discussion about a fellowship in healthcare has been postponed pending the current education strategy review, but it is felt that the material is likely to be very useful in formulating the reading for any future fellowship examination.

Launch at Staple Inn
If you come along to the launch on 17 January (and you are cordially invited!), what will you find?
Well, the programme for the event is still being developed, but we hope that one or both of the presidents of the Faculty and Institute will attend it, and that individual authors will present each module. There will be an opportunity to meet the authors, to look at the modules, and to place an order for one or all of them (they will cost around £20 each). We cannot promise roast ox (fire regulations forbid it) but we hope it will be an enjoyable occasion, celebrating an important addition to actuarial literature in the field of healthcare.