Anne Graphic: Compare

Perhaps your wondering a bit about why such a rigorous exam schedule is so important and why work that is done by an actuary for the insurance industry is that much different from what an accountant might do for other businesses. This table that Chris and I developed should help to clarify this.

How Insurance Is Different From Other Businesses


Other Businesses

Cost of Production

Even though customers pay for insurance today, the final cost of the product may not be known for many years. Known at time of production

Valuing of Assets

Regulation of investments makes it easier to value an insurer's assets. Assets are more difficult to value (e.g. value of bonds).

Valuing of Liabilities

Liabilities such as unpaid losses and expenses are more difficult to value. Amounts are more explicit and more easily quantifiable.

Copyright © 1996, 1997 Maher Associates, Inc.
Last modified: January 1, 1997