Actuaries are problem solvers and strategic thinkers, but they’re also often misunderstood.
If you ask the average Joe on the street what they think an actuary is, they’re likely to say they’ve never heard of them or give the common answer of someone who’s ‘good at maths’.
Yes, actuaries are good at maths. This means that in the past they have been employed by the insurance and pensions sector to manage risk and are often firmly planted in the finance department, where they often remain. This means, that although they are well respected, they’re often not used to their full potential.
However, the world is changing and thankfully the actuarial profession is changing with it. Our society now faces huge challenges and the former president of The Institute and Faculty of Actuaries (IFoA), Tan Suee Chieh, outlined in a speech in June 2020 what this means for the profession: “We must apply our actuarial skillsets more decisively, deliberately and ambitiously to achieve social impact goals of our time for example, in climate change, ageing, AI and ethics, economic and health security, and now more topically, epidemiology and the long-term consequences of pandemics. This will open up exciting vistas for our younger actuaries whose concerns are increasingly about social impact and making a positive difference in the world we live in.”
There is no question the skillsets of people within the actuarial profession can be applied to any sector where complex calculations need to be handled. The world’s biggest challenges are complex, and meticulous data analysis, unerring levels of accuracy, sound professional judgements and imagination are needed to tackle them. These are skills that actuaries have in abundance and it’s time that businesses reframe how they use them.
The IFoA’s Vision, Skills, Mindsets, Domains strategy aims to dismantle pre-conceptions about the profession and encourage actuaries to expand their horizons outside of the traditional actuarial world. This is something that our own actuarial team at Capita are energised by. We know that using actuarial services far more broadly can help to address some of society’s biggest challenges. Our latest report explains how we can use data modelling to help businesses plan their resources effectively and ensure that grieving families during the pandemic get the support they need.
We’re also helping our clients to create better outcomes, beyond the well-trodden fields. Recently we responded to the calls of a major transformation programme involving one of our key clients in the health sector and the migration of a complex payments system. The existing team was unable to reconcile payments between the legacy system and new target system, and was seeing a difference of around £6m per month. Whilst payment systems are not the traditional actuarial playground, our people are very comfortable with complex calculations and are able to bring a level of forensic analysis that can uncover even the most deeply hidden issue.
We produced dedicated calculation specifications and tested over 500 scenarios to unearth and resolve all issues. The new system is now able to replicate payments precisely, with the difference between the systems down from some £6million to under £5 per month - the small residual difference being entirely down to rounding precisions between the two systems.
If our team can make this much difference to one project, just think what could be achieved if actuaries were fully utilised on a much grander scale. Frank Reddington, another former President of the Institute of Actuaries, perhaps summed this up best when he said; “Let us remember, the actuary who is only an actuary is not an actuary.” If we all shift our mindset, the possibilities are endless!