Actuaries in Health – A Rewarding Career
The Young Actuaries Program continued its Melbourne Evening Speaker Series in August with a presentation from Barry Leung and Evelyn Njoo of Defence Health, writes James Morris.
The presentation hosted by Mercer and titled Actuaries in Health – A Rewarding Career, gave attendees a deeper insight into the challenges and opportunities facing actuaries in the Health Insurance industry.
Barry and Evelyn’s presentation started with an overview of the Health Insurance sector in Australia, including outlining the role of the private insurance providers in supplementing Australia’s publicly funded universal healthcare cover: Medicare.
Barry explained that there are a number of reasons why the private health insurance industry operates slightly differently to other forms of insurance, including:
- the community rating principle;
- the ability for policyholders to ‘shop around’ at no cost or disadvantage;
- price regulation; and
- the impact of government initiatives (including the Private Health Insurance Rebate, the Medicare Levy surcharge and the Lifetime Health Cover loading).
This also makes the role of actuaries in Health Insurance a little different to other areas, as Evelyn explained in the subsequent section of the presentation. Whilst premium setting and reserving continue to play an important role, because of the points above (and in particular the community rating principle which restricts the scope for underwriting), there is an increased focus on other areas including strategy development and product design.
To help attendees get a bit more flavour of what it means to be an actuary working in private health insurance, Evelyn walked us through a few case studies of projects her team had undertaken in recent times:
- Health management evaluation – the team worked with multiple stakeholders (internal and external) to assess the impact of Defence Health’s broader wellbeing program on a range of measures including clinical outcomes, customer satisfaction and claims experience.
- Development of a Business Intelligence tool – this project entailed the establishment of a business planning tool which could be used throughout the business (not just within the actuarial team). The project therefore involved not only developing and testing the software itself, but also fostering user engagement and providing training.
- Development and design of new products – a continuous process which involves defining strategic challenges and business issues and helping to develop solutions through analysis and engagement with the process from start to finish.
As Barry outlined in the presentation, this exercise of continually searching to develop and improve the products offered to members is particularly important given the challenges the Health Insurance industry will face over the coming years. In particular, managing cost pressures and maintaining a value proposition for members will be essential in the face of rapidly increasing out-of-pocket costs for patients and premium increases at rates higher than inflation.
This last example highlighted one of the key takeaways of Barry and Evelyn’s presentation, which was that no matter what industry you are involved in, actuaries will always play an important role in turning challenges into opportunities through considered analysis and strategic planning.
The Young Actuaries Program runs a number of events in Melbourne including evening speaker sessions and networking lunches. For more information please contact me.
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