Thinking Fast & Slow for Actuaries

This paper will examine improving decision making in insurance risk underwriting. A key component of insurance risk underwriting decisions is qualitative judgement, in addition to quantitative analytical modelling. In the training of actuaries, great strides have been made on the analytical side. However, the training of judgement, both intuitive and deliberate, has largely been ignored. The aim of this research proposal is to design and test training programmes to improve judgement in insurance underwriting. I firstly plan to extend the script training concept, used extensively in medical training, to the domain of insurance underwriting. I will look to capture the scripts of experienced underwriters; contrast this with novices and then use these data to develop a training invention program for training intuition. I then look to extract the simple rules that underlie the intuitive judgements and use these to train more deliberate judgements.