Testing in the Actuarial World | iLAB

Testing in the Actuarial World

The world of insurance – and specifically actuarial science – is built around efficiency and accuracy. The algorithms and calculations that go into determining risk are so finely tuned that even the slightest hint of an error could cause irreparable damage – not just for the company, but for the customer, too.

Customers utilize online insurance tools to save them time and effort, but expect the information to be accurate and honest. The insurance professionals running the show need their digital tools to be up-to-date, organized, and in compliance with government and other legal and certification requirements.

So how can both sides be confident the software will meet their needs? The answer comes in the form of competent testing processes. Let’s look at some of the possible negatives one may find without testing habits in place.

Negative Customer Perception

Insurance isn’t just an investment, it’s a commitment to a relationship. Policyholders want to know they’re getting the most competitive price possible from a competent partner. Your website or software is the chance to make a first impression. A glitch or a crash isn’t a great one. This also extends to those who have already become policyholders. Some will be visiting the site or using the insurance app in emergency situations – times when an ‘error occurred’ page just won’t be acceptable. Performance testing of customer-facing insurance apps and websites can help identify potential causes of error before the product is launched.

Suffering Inaccurate Quotes

One big selling point of online insurance tools is the ability to get a quick and honest quote with only a few keystrokes. If your site is using a flawed calculation tool, customers will be provided incorrect premium prices. This will cause extreme frustration, and could mean you lose money, or put you and your company at risk of a lawsuit. By implementing automated testing, you can put maximum strain on the abilities of your actuarial algorithms and see where improvements can be made.

Real-Time Data Overloads

Actuarial calculations are constantly changing, and new data is always coming in. Your system may have an automated function that applies new data sets, or internal users may adjust the data; regardless, the system must handle the volume and stay accurate. In order to achieve efficiency and quality, performance and regression testing must become a standard practice for your team. The former will allow you to ensure calculations are correct every time, and the latter will help you stay up to date by checking to make sure any changes to the actuarial calculations aren’t disrupting its function.

Too Time Consuming for Your Pros

Actuaries learn to understand not only the necessary mathematics, but also to see the changes ahead in the insurance industry. Actuaries are people you can look to for predicting trends, and possibly for future leadership. If they’re stuck manually inputting data or running tests to see if the calculation’s function is being impeded, you’re wasting not just their time but your own labor costs. By implementing regression testing into your system, as well as a properly running automation system, you’ll be able to let these pros grow and influence change at a higher level.