[Skip to content]

Sign up for our daily newsletter
The Actuary The magazine of the Institute & Faculty of Actuaries
.

On the do-it-yourself actuary

ONE OF THE MORE MEMORABLE thingssaid to me early in my actuarialcareer was the comment of anuncle of mine, a Cambridge don:‘An actuary? Why, I could be an actuary inten minutes. All you need is Bayes’s Theorem!’Unfortunately, I took slightly longerthat ten minutes to qualify. However, theidea of the do-it-yourself actuary is not altogetherridiculous. We could profitably consider,for instance, the experience of CharlesBabbage, a man famous for his role in thedevelopment of the calculating machine.Babbage’s achievements were impressiveboth in breadth and depth, involving not only hishuge contribution to the development of automatedcalculating devices (his ‘difference engines’) but alsomajor contributions in calculus, astronomy and statistics.As far as his ‘DIY actuaryship’ is concerned, wecan do little better than to quote his own words:In 1824… I was invited to take the entire organisationand management of an office for the assuranceof lives, then about to be established…. The propositionmade to me was that I should have the entiremanagement of the concern as director and actuary,with a salary of £1,500 a year, and apartments in theestablishment, with liberty to practise as an actuary…I accepted the proposition.I found in one of the addresses of Mr Morgan, theactuary of the Equitable, materials with which toconstruct, by the aid of various calculations, a verytolerable table of the actual mortality in that society.Upon this basis I calculated the tables of our newinstitution. After three months’ labour, when thewhole of the arrangements had been completed, andthe day for our opening had been fixed, circumstancesoccurred which induced us to give up theplan…. The institution was therefore given up, andwe each contributed about £100 to discharge theexpenses incurred….A non-actuary was able to do an actuary’s job at thedrop of a hat; just how much of the knowledgeimparted by our actuarial studies do we need to performour work competently? If we consider the normalcareer path of a life office actuary, the period of timeduring which the work seems strongly correlated withthe exams’ content may typically be from two to threeyears before qualification to five to ten years afterwards;one would think the same peri-qualificationperiod holds for a typical pensions actuary. For GIactuaries, perhaps even less of their working lifeinvolves what was studied in the exams – especially ifwe consider those GI actuaries who qualified in theFaculty up until a few years ago, thereby never havinghad to sit the GI exam!The purpose of this editorial is not to accuse theexams of insufficient relevance. Indeed, one mightOn the do-it-yourself actuaryargue that the above observations call into questionthe wisdom of our modern obsession with relevance –whatever we put in the syllabuses, we can be fairly surethat most of it will end up not being used by mostactuaries for most of their working lives.Rather, in an issue of The Actuary with a career andrecruitment theme, it is interesting to put the examsinto perspective. The exams are essentially a tool,something which denotes the ability to overcome aseries of non-trivial intellectual hurdles involvingnumeracy, financial awareness, and general intelligence.It is important to realise, for those of you whomay be struggling with the exams, that there are otherways to progress in your careers. I have met seniormembers of several major consultancies who madetheir mark despite not qualifying; likewise, many peopledoing valuable ‘actuarialish’ work in general insurance,or demography, have never felt or smelt anactuarial exam in their lives.Conversely, for those having qualified recently, wemight ask ‘what has changed?’. I did not becomemiraculously more capable on qualification day. Lookingbeyond that memorable date, I am sure I am notalone in feeling I learnt more of practical relevance inthe n years following qualification than I did duringthe n years of study required to qualify (for me n = 5,despite my intimate knowledge of Bayes’s Theorem).And little of what I learnt after qualifying fell under theconference-heavy remit of CPD.We might conclude, then, by expressing a desire forthree things: greater humility on the part of actuaries, and a realisationthat non-actuaries could do many aspects ofour jobs competently; greater commitment to post-qualification learning(not necessarily synonymous with CPD), to ensurethat we adjust our skills in line with the changingrequirements of our careers; and less concern with regenerating the educationalsyllabuses every three to four years for the sake oftemporary ‘relevance’.

02_02_editorial.pdf