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Nikhil has about 5 years of experience in health care consulting in the US and Indian Market, along with some hand on experience in gratuity, leave encashment, valuation and reserving in General Insurance line of business. He is a graduate in Commerce and has 10 actuarial exams to his credit and is also proficient in SAS, VBA and SQL. During our conversation, he shared his insights on the Health Insurance industry.

Q. What role do you play as a Senior Actuarial Analyst?

I am currently working for a strategy consulting firm where we mostly deal with the CEOs & CFOs of our client company. Actuarial work in strategy consulting firm is to provide consulting on the overall business growth, what should be the strategy and how should they approach the market. We advise them about their customer groups – what kind of customers they should target for having better returns by using which product. We need to examine how their business will grow in coming years in terms of competition,regulators and reforms kind of things.

Q. What are the Challenges faced by an Actuarial Analyst early in his career and how can he overcome them?

One thing I would like to mention here is that Actuarial Science is not just about clearing the papers. In reality, if you are doing the analysis, you should know the practical applications of what you have studied in your exams which can become a great challenge if a person has just learned the concepts for clearing the papers and not understood why is he studying these concepts and how can he apply it in real life. You should know the technical software used in the industry. Also, you should have a good understanding of the domain you are working in – like the rules and guidelines followed by the industry.

Q. What kind of actuarial work is assigned to a fresher Actuarial Analyst?

When I talk about a fresher Actuarial Analyst, I will assume that he may not have a good understanding of what actuarial work is all about. He will not be asked to price a product on the first day of his work. The work assigned to him depends on company to company.There are some companies where you have to do process work, i.e. you have to do the similar work again and again. Generally in those areas, you have a good 2-3 months training period where you get trained on everything which you will have to work in your job. But, in some consulting firms where you get to work on different projects frequently, the routine is quite different. There you learn while work. If I talk about a consulting firm in Health Insurance, a fresher will start with the simpler analysis which will help him in understanding the data and general IT skills as well. He can be asked to do the analysis and provide a claim summary at different geographies. Slowly and gradually he will be given some summaries and analysis which require good command over the data and IT skills. Also, I would like to mention that he will be working on the part of a project and may not be aware of the bigger portion of the project. But my advice will be that try to see a bigger picture by asking questions to your seniors like why they are doing on this project and what solutions they will provide to a client as this thing will augment your knowledge and thus increase your chances to grow within the company.

Q. Can you explain the difference between working in General Insurance and Health Insurance?

Talking about the similarities first, both offers usually short term products. In both the cases, we do not know he amount we have to pay unlike an assurance policy in Life insurance. Also, they are different from Life Insurance in a sense that if a life die then company has to pay the benefit, i.e. the claim is made only once but in case of GI and Health Insurance, there can be n number of claims.So GI and Health insurance are similar in this context.But there are still some differences between GI and health insurance like the domain is totally different. In Health Insurance, you should have a very good understanding of medical terms. You should understand the diagnosis code, procedure code, the inpatient claims,the hospital claims and the outpatient claims. The pharmacy or drugs claims can be different. The challenges are different in both the fields. In Health Insurance, you talk about morbidity (chances of getting sick) whereas in GI, you talk about the accident rates. Keeping the different challenges in mind you can price a product in both the fields using the similar method.

Q. How are practical exams like CA2 & CA3 different from written exams we have?

In practical exams like CA2 and CA3, you do not need to study any material like we do in written exams. If we talk specifically about CA2-Model Documentation, Analysis and Reporting, this is a 2 days practical exam in which first day we get to learn about the model documentation, analysis and reporting from the senior actuaries and the next day we have to give an 8 hour exam on whatever case study we get. The exam is about to prepare an auditrail for your model in which you state the assumptions you make regarding the model and how will you use that model.Also, you need to prepare the executive summaries of your model in order to explain the results of your model to your client. The 75% weightage of the exam is of auditrail and executive summaries you provide for your model irrespective of whether your model is giving the proper result or not. So, focus more on your communication skills because how do you present your model is the key part of this exam.

Q. When you are hiring Health Actuaries in your team, what skills do you look for?

I will like a person with good knowledge in the domain he is applying for. IT skills will be an added advantage if someone can use the software like Excel, Access and VBA to apply the concepts they have learned in their CT Subjects. Above all, a person should have good analytical skills and problem solving skills. He should have a good approach to solve the problem using his knowledge about the field. I would suggest students appearing for the interviews to practice some real life case studies to increase their aptitude in solving the problems given to them. This will help them develop their analytical and problem skills.

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