The short list is set. Two or three firms have responded to your RFP with serious proposals. Fees are reasonable and comparable. The proposals look professional on paper. You are now going to decide which firm to engage, and the tool you have for the decision is a one-hour conversation with each signing actuary.
That conversation is where the real evaluation happens. Proposals are written carefully, with time; interview answers are given in real time, from the actuary’s actual understanding of the work. A strong actuary gives strong answers. A weak actuary gives hedged, generic, or defensive answers. The difference is usually obvious if you know what to listen for.
This article is twelve questions to ask, organized by what they are testing. For each, it describes what a good answer sounds like and what a weak answer sounds like. Use the full list if you have the hour. Pick six if you are short on time.
Set-up for the interview
A few ground rules before the questions.
The signing actuary must be in the room. Not the business development partner, not the senior manager, not the firm president. The person who will sign the opinion on your program. If the firm will not make that person available for a one-hour interview, they do not want the engagement badly enough.
The interview should be you and one or two colleagues, not a committee. Interviewing in a committee of six produces bland answers because the actuary is managing a room.
Ask the same questions of each firm, so you can compare. Take notes.
Resist the urge to fill silence. A good question followed by 30 seconds of silence often produces a better answer than rushing to rephrase.
The twelve questions
1. Program experience
Ask: “Walk me through two programs you have personally signed opinions for in the last three years that are similar to ours. What was similar, what was different, and what did you learn?”
What good sounds like: Specific programs, specific lines, specific structural features that match yours. The actuary remembers the programs because they have done the work. They can tell you what made the program distinctive and what they learned that applies to yours. Two to five minutes of substantive discussion.
What weak sounds like: “Our firm has deep experience in your sector across many engagements.” Generalities. A pivot to the firm’s client list rather than the actuary’s personal involvement. If the actuary cannot name two programs they personally signed that resemble yours, they have not done similar work.
2. Method selection philosophy
Ask: “For a long-tail line like workers compensation, how do you decide which method to rely on for the most recent accident year? Walk me through the thinking.”
What good sounds like: The actuary talks about the tension between chain ladder (too volatile at young ages due to small paid or reported percentages) and Bornhuetter-Ferguson (too reliant on an a priori that may be stale). They mention diagnostics they look at: the paid development pattern, the reported-to-paid ratio, case adequacy signals, trends in severity. They describe how they weight methods when the diagnostics disagree.
What weak sounds like: “We use accepted actuarial methods and exercise professional judgment.” That is a statement of professional standards compliance, not a method selection philosophy. If pressed further, the weak answer cites the names of methods without explaining how they choose between them.
3. Diagnostics
Ask: “When you review a program’s triangles for the first time each year, what diagnostics do you run, and what have you found in past engagements that changed your method selections?”
What good sounds like: Specific diagnostics named (payment pattern shifts, reported development stability, case adequacy ratios, settlement speed, severity trend, mix shifts). A concrete example from a past engagement where a diagnostic finding forced the actuary to move off a default method. Ideally, the example ties to something that could happen on your program.
What weak sounds like: “We perform the standard diagnostic review and discuss findings with the client.” No specifics. No examples. The diagnostic review, if it happens, is a check-box item.
4. Range construction
Ask: “How do you construct the range on a reserve opinion, and how do you decide how wide it should be?”
What good sounds like: A clear description of how the range is built. Typical approaches include multiple method families applied to the same data, parameter variation within a single method, a stochastic or bootstrap approach, or an industry benchmarking overlay. The actuary explains what drives width: more volatile lines, shorter history, greater case adequacy uncertainty, larger mix shifts.
What weak sounds like: “We construct the range based on alternative method selections.” Full stop. No detail on which methods, how the selections are chosen, or what drives the width. A narrow range produced mechanically is worse than no range.
5. Documentation philosophy
Ask: “If I asked a colleague two years from now to reproduce your reserve analysis from your report alone, without access to you, what would they need to be able to do?”
What good sounds like: A thoughtful answer about what documentation needs to support, framed in terms of the reader’s goals: understanding the methods, understanding the judgment, evaluating whether to rely on the result. The actuary describes what goes in the main report, what goes in appendices, what goes in the supporting exhibits.
What weak sounds like: “Our reports comply with all professional documentation requirements.” That is compliance, not philosophy. A report can be fully compliant with professional standards and still be useless to the reader.
6. Monitoring between opinions
Ask: “Between annual opinions, what would you suggest doing to catch reserve drift before it compounds into a bad surprise?”
What good sounds like: The actuary describes a monitoring approach, typically quarterly diagnostic updates focused on a handful of leading indicators: payment acceleration, case adequacy trend, severity trend, claim count trend, incurred movement versus plan. They frame it as distinct from an annual opinion but useful for catching signals that would otherwise surface only in next year’s review.
What weak sounds like: “We can provide interim updates on request.” Reactive, not designed. If you ask what they would actually do in a monitoring engagement, the answer is unclear.
7. Working with your TPA and claim data
Ask: “Your prior engagements have involved [our TPA / a similar TPA]. What do you typically find in their data that requires adjustment, and how do you handle it?”
What good sounds like: Specific. The actuary knows the common data issues from your TPA or a comparable one: how case reserves are coded, how reopened claims are handled, how large losses are capped in the extract, how subrogation is reflected. They describe what they do to clean or adjust.
What weak sounds like: “We work with data from many TPAs and adjust as necessary.” No specifics. The actuary will discover the data issues during your engagement at your expense.
8. Signing actuary continuity
Ask: “What is your firm’s track record on signing actuary continuity? How many of your long-term clients have had the same signing actuary for five years or more?”
What good sounds like: A specific answer about the firm’s staffing model and the signing actuary’s own tenure. Ideally, a mention that the signing actuary has personally been signing for a specific client for several years, with confirmation that similar continuity is expected on your program.
What weak sounds like: “We staff engagements to ensure quality and we rotate team members as appropriate.” That is a description of rotation, not continuity. If the firm rotates the signing actuary every two years as a matter of practice, your program will lose institutional memory every two years.
9. Peer review
Ask: “Walk me through your firm’s peer review process. Who peer-reviews your work, at what stages, and how are their findings reflected in the final report?”
What good sounds like: A concrete description. A named senior actuary or a peer review committee. Review at the methodology stage, the diagnostic stage, and the draft report stage. A process for documenting peer review findings and resolutions.
What weak sounds like: “All our reports are peer reviewed in accordance with firm policy.” That is a policy assertion, not a process description. Ask a follow-up: “who peer reviews yours?” If the answer is vague, the peer review is light.
10. Independence and conflicts
Ask: “What relationships does your firm have with parties connected to our program (our broker, our TPA, our captive manager, our parent company), and how do you manage any potential conflict?”
What good sounds like: A direct answer about existing relationships, whether they create a conflict, and what the firm does about it. Possibly a statement that the firm has no disqualifying relationships. The actuary takes the question seriously.
What weak sounds like: “We maintain independence in all our engagements in accordance with professional standards.” That is a policy statement. Ask specifically about the parties you named.
11. What would concern you about our program
Ask: “You have read our RFP and looked at our data package. What concerns you most about this engagement, from a reserving standpoint?”
What good sounds like: The actuary names one or two specific concerns. Maybe the case reserve strengthening initiative you described, maybe the recent retention change, maybe a gap in the payment history, maybe the shift in mix. The concerns are substantive and program-specific.
What weak sounds like: “We do not see any concerns beyond the standard reserving uncertainties.” That is either a lack of preparation or a reluctance to raise anything that might seem negative. Neither is what you want.
12. A difficult past engagement
Ask: “Tell me about an engagement where the client and your team disagreed on the reserve estimate, and how it was resolved.”
What good sounds like: A real example, told without betraying client confidentiality. The actuary describes the disagreement, their reasoning, the client’s reasoning, the process that produced a resolution, and, ideally, what they learned. The answer reflects confidence without defensiveness.
What weak sounds like: “We have not had material disagreements with clients because we communicate clearly throughout the engagement.” Unlikely to be literally true for an experienced actuary, and the claim itself is a signal that disagreements are either avoided or hidden.
What not to ask
A few categories of questions waste interview time and do not help you decide.
Credential quizzes. Do not ask the actuary to define Bornhuetter-Ferguson or explain the Cape Cod method. A credentialed actuary can do this; it proves nothing about their judgment on your program.
Sales questions. “Why should we choose your firm?” produces a sales pitch. You already read the proposal. Spend interview time on substance.
Hypotheticals with no ground truth. “If our reported losses spiked 20 percent year over year, what would you do?” The actuary will give a reasonable-sounding answer and you will learn nothing about how they actually work.
Scoring and deciding
After the interviews, give each firm a score on each of the twelve questions (or the subset you asked). Use a 3-point scale: weak, adequate, strong.
The firm you want is the one with the most “strong” scores on the questions that matter for your program. If your program has a case adequacy issue, the diagnostics question is critical. If your program is complex and multi-year, method selection and documentation are critical. If you have had rotations in the past, continuity is critical.
Fee is already in the proposal. Do not re-weigh it in the interview. Weigh substance.
What to tell the firms afterward
Notify the firms of your decision within a week of the final interview. The firm you select will want to start the engagement; the firms you do not select will appreciate the closure and may be the firm you want to call for a second opinion next year.
Related reading
- How to Write an RFP for a Reserve Review: the RFP that produces interview-worthy candidates.
- How to Read an Actuarial Proposal: the document analysis that precedes the interview.
- How to Evaluate an Actuary’s Report: the framework for judging the work after you have hired the firm.
If you are running a short list of firms and want to compare against independent reviewers, the hire an actuary directory is in development. Join the waitlist there.