Our profession was brought forth from pondering the unknown, chance and the uncertainty of lifespan
Over time, it extended to the probabilities of morbidity, the expectation and risk of investment returns, and many other fields – always with a tilt towards the problems of the day. To peer into the unknown necessarily requires thought leadership – this is our soul.
The Vision, Skillsets, Mindsets and Domains (VSMD) strategy is about reclaiming our soul and giving it voice. We must create room for new values. To face the digital revolution, we will need curiosity, adaptability and a growth mindset. Meanwhile, COVID-19 has exposed the systemic risks that threaten society – erosion of institutions, planetary degradation, inequality, health security and Big Tech governance. To tackle these issues we will need courage, imagination and judgment.
Our profession’s values of accuracy, cautiousness, consistency and reticence held us in good stead when we worked within stable, linear and reliable systems, before the emergence of computer power. Compliance and linearity will shortly be the reserve of machines – but our role remains relevant, as this approach is inadequate for addressing today’s systemic risks. Uncertainty is the space in which actuaries’ imagination and judgment can shine. We will be informed by machines, not replaced by them.
During the past two decades, we have been too immersed in fixed Gaussian models as the basis for problem solving and risk management. Today, Knightian uncertainty looms. In this world, it is time to reclaim our spirit: to think systemically, not just systematically; to adopt multiple framing, rather than fixed framing; to conceive of possibility, rather than just probability; to act courageously and imagine what is possible, rather than just predicting trends.
This is a great opportunity for the profession to return to the soul of our forefathers. We must ask, ‘What is going on here?’ and find a response in the spirit of enquiry, discovery and invention.
Tan Shee Chieh is president of the Institute and Faculty of Actuaries