In August, I strove to introduce the importance of actuarial decisions in risk assessment. That was a run-up to the National Workers' Compensation Review at WCI, where we produced Actuarial Insight and the Mysterious Process of Underwriting and Reserving. See Help Me to Help You (August 2026). The impetus for that program was largely the writing and wisdom of William Zachry.
Mr. Zachry has a long history in the workers' compensation world, and capped his career running the risk efforts at Safeway supermarkets. He knows a bit about risk, insurance, retentions, reserves, and claims. Through the summer, as his vision for the NWCR came to fruition through his efforts and those of Suzy Braden of Gallagher Bassett, another conversation started about spreading the discussion to other venues.
If you missed that one, I cannot help. The NWCR program was excellent, but not recorded for posterity. There is always the chance such a program will resurface at future WCI programs; stay tuned here for news on that front.
Nonetheless, the next opportunity came on September 9, 2026, when WorkCompCollege presented The Point again. Bob Wilson and I (Mostly Bob) have been producing this webinar under various names for about ten years. On this episode, Actually, Actuaries! A Great Way to Improve Claims Outcomes, we brought some similar thoughts to the fore. You can watch the recording at that link.
Mr. Zachry was joined by Loren Nickel, the risk expert at Google. It was a lively and informative conversation that reemphasized some important points. I encourage watching this recording and strive to better understand the critical involvement of actuaries in the world of claims and risk. It is an imperative for those who handle or strive to settle claims (on all sides).
Mr. Nickel and Mr. Zachry are focused on the role that actuaries play, which may impact the working world through the cost of their insurance products for workers' compensation. That includes the self-insured world because those companies likewise face a risk cost of collateral that the state requires for self-insured status. So, through premiums or this collateral, there is a cost of coverage. That is integrated into the prices you pay for that company's services of products.
The second role is in the appropriate reserving of individual claims files. Is there enough money set aside to pay the probable future expenses on a particular claim? The actuary has a role in predicting those probabilities and ensuring that risks are carefully considered.
The Point program was informative on several levels (where else can you get this kind of perspective and expertise for free?). I am no actuary (Mr. Nickel is) or a risk manager (Both Mr. Zachry and Mr. Nickel are former recipients of the RIMS Risk Manager of the Year Award). But I can tell when people have added value to a conversation.
My takeaways are rather simple. I mention them here but strongly encourage viewing the program.
First, the actuarial experts are striving to predict. They are looking at many data points, and there is no singular "fix" or "component" to effective management of risk or prediction.
Second, actuaries do not like change (who does?). They are prediction-driven, and their ability to define and predict effects may be impacted by the fact that many things change coincidentally. If the payments on a population of claims increase and there was a change in management (the TPA changed or the employer's risk manager), the actuary sees an increase (effect) but may struggle to clarify which change is contributing and how significantly.
Third, there is not enough communication in the risk/actuary relationship. When that new risk professional or new TPA (or other change) occurs, is the employer discussing that with the actuary in advance or waiting to be responsive when the actuary notices the increase in retrospect? To often, it is the latter, and the effect has already caused concern without forewarning.
Fourth, the interaction between the actuary and the risk manager has to involve trust, built through consistency, communication, and collaboration. As the actuary looks at past performance (what was spent, what was settled, etc.), they would likely have questions (more information is almost always better). Those can best be answered by the risk or claims professionals.
Finally, this relationship reinforces the conclusion that too much persists in silos. The risk department does not communicate enough with personnel/HR and information services (both internal), as well as the various providers impacting claimant care after an injury (most external). The lack of integrated and persistent access to information between all these silos frustrates the extent and pace of accessibility and analysis.
In a nutshell, the actuary will make critical decisions about the risk function. Their opinions will affect costs and the bottom line. Their perspectives will be governed and influenced by the available data (great or small). And the actuary can be an ally or adversary depending on how you choose to manage the relationship. Those who choose collaboration will likely be better served.
Watch the recording. This is critical knowledge whether you seek to manage risk, defend litigation, or maximize your injured worker's benefits or settlement. This conversation is critical, but more are needed. It is great to still be learning every day in this community.
