[Skip to content]

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

The red pill or the blue pill?

As professionals we have two choices to take the
red pill or the blue pill. For those of you who
don’t know, this was the choice faced by Neo
(Keanu Reeves) in The Matrix. The blue pill represented the status quo, a quiet life, and slow decay. The red pill represented reality, change, and no going back.
This analogy was offered by Matthew Farraker during a session on defined contribution pension schemes. Almost every speaker at the convention reiterated that the profession is faced with new challenges in a changing world. We are under attack for our roles in the Equitable Life collapse, the deficits in defined benefit pension schemes, and for with-profits endowment mortgage shortfalls. If we don’t rise to these challenges and opt for the red pill, we face extinction.

Challenging the younger generation
The convention opened with talks from Michael Pomery and Harvie Brown, Institute and Faculty presidents respectively. Michael challenged us to wipe away the false image of actuaries as bad communicators who are boring and unsociable the hotel bar was suggested as a good place to start. Actuaries are faced with the challenge of explaining the ‘simple truths’ of our specialist fields. A particular challenge is the need to explain that uncertainty is a fact, to clients who often just want one answer.
Harvie Brown focused on competence and professionalism, citing the medical profession as an example for those reluctant to carry out continuing professional development (CPD). Would we trust a doctor who qualified 30 years ago, and has not done any subsequent training or research? Harvie reiterated Michael’s message, challenging us to think outside the box something he admitted older actuaries struggled to do.

The role of the profession
On the second day, Geoff Ho of Pensions News attacked the profession for not serving the public interest and for its role in causing the various problems in the financial world. He argued that the profession had failed to serve the public (including his mother), while lining our own and our clients’ pockets. The public had once trusted us, but now they see us as greedy, insular, and bad communicators, sitting in gentlemen’s clubs and smoking cigars.
Simon Carne and several audience contributors, while acknowledging some of Geoff’s points, put up a stern defence of the profession. Simon argued that no one can predict the future, blaming the government for many of the problems faced by the financial industry. One delegate accused the media and society’s increasing blame culture for some of the pressure put on us. Another suggested that he was quite happy to line his own pockets, as long as he was doing it honestly. In defence of the profession’s communications skills, he cited the lunch waiter’s lack of English skills as an example of how society as a whole struggles to communicate.

Wider fields
The topic of wider fields was another common theme of the convention. Keith Lawrence, once a Norwich Union actuary, now an environmental economist, demonstrated how we could break free from traditional fields. His work applies actuarial techniques to the long-term uncertainties associated with the environment, and even involves calculating option values for redwood forests. Matthew Farraker explained that actuaries could do just about anything they wanted management consultant, risk manager, HR adviser, or even professional footballer. Well, perhaps not the latter.

Soft skills
Soft skills sessions aimed to improve us as communicators, leaders, and consultants. Martyn Dorey, as well as proving an excellent chairman for the convention, argued for more levity in our role as actuaries. Humour that is used well and in the right context could help us develop our client relationships and help us deliver difficult messages humour used badly could end our careers. Martyn’s challenge to do something we’ve never done before was met with many blank looks, including from me.

Advertising the profession
The organisers gamely introduced additional interaction into the second day of the programme, inevitably running the risk of participants with hangovers, and missing any early leavers. The delegates pitted their wits to come up with 20 possible posters for use by the profession. Most posters focused on selling the profession to university students, proving reassuringly that most feel that the profession has something to offer to them.
The judging panel included the two presidents, Iain Taylor, and Simon Carne. Each tried to play the roles of their Pop Idol/X-Factor heroes, with Simon Carne as his namesake Cowell, Iain Taylor as Louis Walsh, Harvie Brown as a wily Dr Fox, and Michael Pomery doing a neat turn as Sharon Osbourne.
The winning poster’s strap line ‘Actuaries do it with models’ was designed to make the profession seem more sexy to outsiders. The winning team reassured the panel that in their allotted hour, a whole series of straplines had been created for what could be a plethora of posters, with actuaries doing it ‘with assurance’, ‘by numbers’, and ‘with each other’. The all-male panel seemed most impressed by this concept and confirmed that ‘sex sells’.

Vous avez des bananes?
After the convention I looked back on what I had learned and the serious challenges that lay ahead. As actuaries, we need to think laterally and creatively the young can do this. The world is an uncertain place, but our clients want a certain answer how do we manage this challenge? On a lighter note, I also found out that despite approaching 30, I can still stay in the bar until 3am, but my colleagues can stay longer. I learned the French for ‘do you have any bananas?’. And I now believe that actuaries really can do it with models.