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In-house vs. Outsourced Actuarial Services: Pros & Cons

Updated on
July 3, 2025
Published on
July 6, 2025

The healthcare sector is moving towards value-based care models. Providers need to handle financial risk in shared savings and capitation arrangements. On the other hand, payers are under increasing pressure to predict costs, set premiums fairly, and comply with IFRS 17 and US GAAP.

According to CMS, between 2024 and 2033, National Health Expenditure (NHE) in America will rise by an average of 5.8%, higher than the expected average growth of 4.3% in Gross Domestic Product (GDP). This means that healthcare will form a larger share of the economy.

For actuaries, this growth accelerates their value in anticipating healthcare costs, designing financially sound models, and supporting payers and providers in managing increasing financial risk. 

Whether you are a provider growing your population health or specialty abilities, or a payer managing risk corridors and premium submissions, actuarial assistance is mission-critical. But one question still arises: Do you employ your own actuarial staff or outsource to a third-party company?

Let’s find out the pros and cons of each approach, explore the rise of hybrid models, and show how platforms like Humbi AI help organizations scale smarter without compromising control.

Inside the Actuarial Function

In essence, actuarial teams measure uncertainty. They construct statistical models, estimate reserves, and assist in ensuring that organizations are financially viable and compliant.

But actuarial work today goes far beyond spreadsheets. Today’s teams:

  • Merge real-time data sources (EHR, claims, SDoH, etc.)
  • Utilize machine learning for forecasting and risk stratification
  • Work together across finance, clinical, and population health functions
  • Work under tighter deadlines and increasing regulatory pressure

For payers, actuaries assist in benefit design, pricing, reserve setting, and financial forecasting, frequently under tight-reporting cycles. For providers, actuaries assist in projecting care costs, risk adjustment for patients, and informing resource planning.

Whether it’s in-house or outsourced actuary services, they have their pros and cons. It’s important to consider the benefits and limitations to make an informed decision.

In-House Actuarial Teams: Pros and Cons

In-house actuaries help healthcare entities stay independent and in control of their operations. The pros and cons are listed below.

Pros:

  • Strategic control: In-house actuaries deeply understand your business and can work closely with finance, population health, and leadership teams.
  • Continuity: Long-term employees are able to create institutional memory and historical models.
  • Custom modeling: You may model to the needs of your organization, as opposed to conforming to a vendor's method.

Cons:

  • Hiring issues: Actuarial professionals are highly sought after, and are costly to hire and retain.
  • Scalability challenges: Internal teams tend to get overburdened with work during seasonally high reporting periods.
  • Training burden: New employees take time to onboard and ramp up - time companies may not have.

Outsourced Actuarial Teams: Pros and Cons

Outsourcing gives you access to experts when you need them but you give up a bit of day-to-day control.

Pros:

  • On-demand expertise: Need help with pricing, risk models, or regulations like IFRS 17? Outsourcing gets you there without long hiring cycles.
  • Scalability: Whether it’s an audit, a big RFP, or a new value-based contract, you can scale up your capabilities quickly.
  • Cost control: You only pay for the work you need, no extra salaries, benefits, or overhead.

Cons:

  • Less visibility: Since the work happens outside your organization, it’s not always easy to see what’s being done or when it’ll be finished.
  • Data sharing risks: You’re sharing sensitive patient or financial information, so you need strong security and a partner you trust.
  • Alignment gaps: Misaligned goals or assumptions can slow things down or lead to missed expectations.

Hybrid Models and the Use of AI

More payers are now choosing hybrid models. In the hybrid model, core actuarial staff is kept in-house, and routine or technical tasks are outsourced. This approach provides balance by preserving strategic control while offering flexibility to scale.

But hybrid models can lead to even more complexity. Multiple teams, systems, and vendors can lead to miscommunication, delays or version control problems. That’s where Humbi AI adds real value.

Humbi AI is a leading actuarial automation platform that enables internal and external teams to work from the same source of truth. It automates repetitive tasks, streamlines workflows, and has everything audit-ready. Building reports, modeling reserves, or forecasting scenarios, Humbi AI makes it all happen in a faster, more accurate, and entirely traceable manner. 

The platform also enables both payers and providers to manage contracts with each other. Even better, it allows you to maintain security and compliance while collaborating across teams, internally or with trusted partners.

Humbi AI's Core Modules

  • Competitive intelligence: Enrollment & market penetration, precision network development, cost, utilization, risk benchmarks and SDoH consumer insights
  • Patient 360: Quality management, clinical campaign management, low value care identification, patient management
  • Financial analytics: VBC P&L management, projected financial performance, variance reporting
  • Provider analytics: Provider performance management, referral & network leakage, risk score accuracy, inpatient efficiency measurement

Deciding Factors: In-House, Outsourced, or Hybrid?

There’s no one-size-fits-all answer but here are a few factors to guide your decision:

Deciding Factors: In-House, Outsourced, or Hybrid?

Making Your Decision

Choosing between in-house and outsourced actuarial services isn't simple. Both options have clear benefits and drawbacks. However, one thing is clear: AI is transforming actuarial work.

Tools like Humbi AI enhance all service models, whether it’s in-house, outsourced or hybrid. They improve accuracy, reduce costs, and help make better decisions.

It’s important to begin planning today and think about how AI will enhance your actuarial ability. Then, select the service model that suits your new, AI-enabled future.

Keep in mind, though, that the objective is not necessarily cost savings or improved control. It's about enhanced decision making that leads to business success. The proper blend of human skill and AI capability will achieve outstanding results.

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