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The Actuary The magazine of the Institute & Faculty of Actuaries

What are the chances?

AFEW WEEKS AGO there was an item on thenational news about how telephone companieshad been concealing mobile phonemasts inside the signs outside fast foodrestaurants. The news item featured the usual assortmentof concerned residents, each of them expressingtheir anger about the risk to their children’shealth introduced by these masts. What thereport didn’t mention is that repeatedpurchase of meals from fast food outletsis, based on the evidence available,much more likely to harmchildren’s health than repeatedexposure to the mobile phone mastsoutside, so avoiding hamburgers altogethermight be the optimal riskreductionstrategy.As Peter Tompkins toldus last month, panicjournalism often distortsthe public’sperception of risk,and a rationalanalysis of the factsrarely makes good television.A prime example ofthis was the BSE crisis, where the truerisk of infection in humans was much lower thanscaremongers would have led you to believe.What a lucky position we actuaries are in that wecan understand risk so thoroughly and communicateit so effectively! And we are even luckier that the profession’slibrary contains a useful and entertainingdatabase of facts and figures on various risky things.Have a read. You can learn how likely you are to behurt by, for example, hang-gliding, sausages, orChristmas decorations. I’ve just worked out that, if Icontinue to pursue my hobbies of badminton, tabletennis, and snooker for the next 20 years, the chancesthat I will fall foul of a serious hobby-related injury is1 in 85. Frightening statistics are also available oninjuries involving carpets, lifts, and clothing. Theseare frightening not only because of the sheer numbersof painful incidents caused by seemingly harmlessobjects, but also because someone hasactually counted them.This database was put togetherto provide a source of statisticsfor use in speeches, meetings,and when contemplating takingup ice hockey. However,the idea could be extendedinto something truly usefulif the actuarial professionwere to develop some kindof ‘riskometer’. For example,a recent annual reportof the chiefmedical officerof theDepartment ofHealth included asimple slidingscale of risk to enablepeople to compare the risk of deathfrom different medical conditions.The absolute values (1 in 100,000, say) involve sufficientnumbers of zeros that they mean little to mostpeople, but the relative riskiness is clear.If the profession is keen to raise its profile, then ariskometer could be a good way to do so. I admit thatfor actuaries to build a reputation as ‘those peoplewho compile statistics’ might not be exactly whatwe’re after, but if we got it right, it could show theworld that our profession is, after all, of practicalday-to-day value to Joe Q Soap.Slán…This is my last issue as editor. From next month, MatthewEdwards will be at the helm. I have enjoyed very muchbeing the world’s least well-qualified magazine editor,and I only got away with it thanks to the skill andtolerance of John Harris and his team at Three RiversPublishing. I am delighted to be handing over to a propereditor, and I have no doubt that during Matthew’s tenurethe magazine will go from strength to strength.I would like to add a special note of thanks to LisaHenriot (my better half), Andy Lincoln, and the numerousothers who endured early drafts of editorials andprovided invaluable feedback and advice.With this issue we also bid a fond farewell to SandySmyth, who is retiring as sub-editor. Sandy has beenassociated with the magazine throughout its life and hasvaliantly maintained the quality of the writing in the faceof contributors’ often wayward English.…and fáilteIn addition to welcoming Matthew as editor I would liketo extend a warm welcome to Joanne Alder, the newfeatures editor, and Mary-Ann McNally, who will beassisting her and Matthew.Conor