Welcome to the October issue of The Actuary, which is packed to the brim with great content.
We start the features section with an important discussion between our president, Tan Suee Chieh, and Chika Aghadiuno, chair of our Diversity Advisory Group, about the recent anti-racism protests and how it affects our profession. They remind us of the breadth, depth and persistence of racism affecting all strata of our society, and that we must all take steps to challenge our own attitudes and actively champion a more diverse, equal and inclusive society.
In a similar vein, James Orr discusses management of unconscious bias against others in order to avoid its effect on decision-making, groupthink and ultimately the safety and soundness of firms. He reminds us that diverse teams outperform less diverse ones, and an inclusive working environment is key to bringing teams together and getting a holistic view of the risks faced by a firm.
As part of our COVID-19 coverage, Matthew Edwards and Matt Fletcher report on the data and model risks in trying to make sense of the pandemic. Meanwhile, Guy Thomas tells us about his research on equity release mortgages and how the valuation of long-dated barrier options may be relevant if we believe that there is a theoretical floor to house prices.
Additionally, Paul Fulcher and Sihong Zhu explore the history of the ‘prudent person principle’ and its relevance to the Prudential Regulation Authority’s expectations today, framing the discussion in terms of the objective reasonable person test.
I hope you enjoy the issue.