Actuarial Science students from the Department of Mathematics, Faculty of Mathematics and Natural Sciences (FMIPA), Universitas Gadjah Mada (UGM) have once again proven their excellence at the national level. The Begawan Actuaria team, consisting of Mohammad Firdaus, Fitriana Arlyn Rahayu, and Cherlyn, earned First Place in the Actuarial Business Case Competition (ABCC), part of the Jelajah Aktuaria (JEJAK) event organized by Institut Teknologi Sepuluh Nopember (ITS).
ABCC JEJAK ITS is a collaborative effort between the ITS Actuarial Science Student Association (HIMASAKTA) and Indonesia Re. This competition is designed to test students’ skills in actuarial science and business case analysis, inviting them to apply their knowledge to real-world problems faced by companies. More than just a competition, this event serves as a learning platform for students to face authentic industry challenges similar to those encountered by actuaries in their daily work. Through this event, participants have the opportunity to hone their practical skills and develop strategic thinking to tackle complex problems. This initiative also supports the achievement of SDG 9 (Industry, Innovation, and Infrastructure), encouraging students to innovate when facing real-world industry issues.
In this year’s ABCC JEJAK, participants were asked to analyze business instability in reinsurance companies following the COVID-19 pandemic. Teams were tasked with using historical data to design strategies that could help companies resolve existing problems. The competition consisted of three rounds: the preliminary round, semifinals, and finals. In the preliminary round, participants presented an overview of the company’s issues and a broad outline of their solutions. Teams that advanced to the semifinals were asked to provide a more detailed explanation of their solutions, while the top five teams proceeded to the final round, held on-site at Institut Teknologi Sepuluh Nopember, Surabaya. During the finals, each team presented their best solutions, incorporating perspectives beyond actuarial science and involving interdisciplinary collaboration to achieve optimal results.
UGM’s Begawan Actuaria team identified that the instability in insurance products was not only triggered by COVID-19 but also due to inefficiencies in underwriting processes and inappropriate premium calculation methods. They proposed changing the premium calculation method from surplus to excess-of-loss, helping reinsurance companies control their losses. This approach also benefited the insurance company by reducing premiums according to risk levels. The excess-of-loss method, a non-proportional reinsurance method, provides coverage within a certain range, as agreed upon by both parties. Its effectiveness was demonstrated through sensitivity tests and scenario analysis under various market conditions, achieving stable profitability across multiple calculation iterations. To enhance its effectiveness, product terms and conditions were strengthened, such as implementing a waiting period to reduce potential fraud in insurance contracts. This highlights the vital role of actuaries and interdisciplinary support in achieving optimal solutions. The solution aligns with SDG 8 (Decent Work and Economic Growth), ensuring economic stability in the reinsurance and insurance sectors.
With the theme “Triwizard Tournament, Quest for Goblet of Fire,” students were encouraged to analyze modern insurance industry challenges critically using statistical and programming approaches. Through this competition, students are expected to make real contributions to national economic development with their innovations, competing at both national and international levels. This 2024 JEJAK ABCC ITS competition also serves as a valuable opportunity for Universitas Gadjah Mada to achieve new accolades. This competition supports SDG 4 (Quality Education), which focuses on enhancing educational quality to produce a highly innovative and competitive generation.
Keywords: Actuarial Business Case Competition, Insurance, Reinsurance, SDG
Author: Cherlyn
Editor: Endang Sulastri
Photo: Cherlyn