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The Actuary The magazine of the Institute & Faculty of Actuaries

Thinking outside the black box

According to the search facility at www.the-actuary .org.uk, Geoffrey Boycott – the former England cricket captain and patron saint of Yorkshire – has not yet been mentioned in this magazine. I find this surprising for, although it does not pretend to be Wisden Cricket Monthly, The Actuary does have rather a wide brief. We should not shun Sir Geoffrey simply because he has nothing at all to do with actuarial theory, actuarial practice, actuarial history, or actuarial anything. Let us give him his 15 seconds of fame.

‘Corridor of uncertainty’This expression – ‘corridor of uncertainty’ – was coined by Sir Geoffrey in the 90s (in the 1990s, not in Sir Geoffrey’s personal 90s) and in its original context it was used to describe something highly technical pertaining to the off-stump. But let us consider the wider implications of the phrase.Note the imagery it evokes. We see the agnostic staring down the religious ‘corridor of uncertainty’ – wall of Doubt to the left of him, wailing wall of Faith to the right of him. We see Wittgenstein pacing fretfully up and down the philosophical corridor of uncertainty, tearing out his hair and wrestling with Right and Wrong. Most disturbingly, we see Heisenberg working on his uncertainty principle, and this calls chillingly to mind the image of the mushroom cloud.What of the actuarial corridor of uncertainty? It must be related in some way to the ‘expanding funnel of doubt’ of which we hear so much in our line of work. Perhaps in the actuarial context, ‘corridor of uncertainty’ is a generic term, used to describe a ‘funnel of doubt’ whose expansion/contraction properties are less well defined?That’s more than 15 seconds. So, what other expressions can we steal and fashion to actuarial ends?

‘Singing from the same hymn sheet’This expression is perhaps a little hackneyed, but what about ‘singing from the same balance sheet’? That could be used to describe the harmonious relationship that exists – should exist – between an actuary and an auditor. Authors of the GN29 take note.

‘It’s not rocket science’Why bring the rocket scientists into it? Why can we not just say ‘It’s not Subject 103?’ Or ‘It’s not… whatever that is under the new syllabus’?I would suggest more such expressions, but then that would leave you nothing to submit to the letters page next month. So let us return to Sir Geoffrey Boycott. The article on p38 sets out a convincing case for why the standard deviation of a cricketer’s scores would be a useful adjunct to his average score when assessing his worth. I have doubts as to whether the cricket fan, after a bottle of port in the Long Room at Lord’s, or after a four-pack of Heineken in front of the TV at home, would be able to comprehend the deeper significance of the Consistency Coefficient, but undoubtedly it is something that would be of interest to actuarial observers of the game.There is a lot of statistical information nowadays regarding the results of sporting events, and it occurs to me that actuaries are ideally placed to analyse and make financial sense of this. It is very tempting to try to apply our skills to horse-racing, for example. Perhaps the Consistency Coefficient could be pressed to pecuniary ends in that direction? I know that there is an old saying, ‘You never see a bookie on a bike’. But without sifting through the statistical data on the professions of cyclists how are we to know whether that is true?Personally I picture a post-Morris actuarial recession, with redundancies, pay cuts and long queues at Ladbrokes. Gray-suited bespectacled bowler-hatted punters tapping the numbers into their calculators and placing judicious bets. ‘£500 on Equity Market, please, running in the 4.30 at Haydock. In whose ability to triumph I have 68% confidence’.If any budding authors would like to submit articles on how to turn equations into gold in this way, please do send me them.