The risks facing the insurance agent

The main problem facing the insurance or reinsurance agent is honouring contracts taken out by clients for compensation in the event of accidents, while simultaneously making sure never to lose his equity capital, because this would bar him from practising. On the other hand, he is obliged to augment his capacity for insuring new risks, while simultaneously increasing his revenues, the primary reason for maintaining a position on the stock exchange and therefore attracting investors. This balance is all the more precarious since the future is uncertain : the cost of accidents is known only retrospectively : recent catastrophes have made insurers worry with good reason. To assess the future, they call on actuaries who perform complicated calculations and build models which, in a competitive context, allow them to adjust strategies such as selecting risks, price-setting such risks and resorting to reinsurance. From his experience as both as an actuary and an insurance agent, Daniel Blanchard tackles all these issues.