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The Actuary The magazine of the Institute & Faculty of Actuaries

Cold feet and spreadsheets

Jessica Elkin divulges the secrets of achieving your ideal goals, and suggests the clue could lie in which of the boring bits you are able to endure


Phil Wigglesworth

I love a good wedding, and this year I’ve been invited to six. Six days of parties with friends and family, champagne, dancing, and watching couples I (thankfully) thoroughly approve of tying the knot. Two of them were the two weekends before my September exam, which felt like a particularly cruel way to celebrate love and partnership. However, they were wonderful, and all’s well that ends well – at least, for now. I’ve not had those results yet.

It’s quite a big deal, is marriage. Listening to those vows, it’s quite extraordinary all those things you have to do. To have and to hold is fine. For better and in health and all that, fantastic. But in sickness, and poorer, and until death? Goodness. Quite a big ask. You’re required to say ‘I do’ to all of the above, without a single contingency or caveat.

For actuaries, a more precise answer might be, ‘I certainly hope so; although there’s a material probability that this won’t work out. But for the meantime, sure, I’m all for it.’ 

Or, alternatively: ‘It depends.’ But I hear that doesn’t usually go down very well.

In theory, an actuary’s engagement will be based on sound analysis and the strongest rationale of them all. But actuaries still get divorced. So how does one choose a partner for life?

Not a hitch

Life is full of difficult decisions of varying levels of importance. Should you tip hairdressers? If you meet a friendly dog, how much attention do you have to pay to the owner? When you make eye contact with an approaching colleague, at what point do you acknowledge them and what do you then do to fill in that remaining time before you pass? You can’t keep looking them in the eye because that’s creepy, but anything else comes across as highly contrived. Day-to-day life is a minefield.

The above leads me to ponder: if I can’t answer any of the above questions, how can I make important decisions in situations involving large sums of money, people who rely on me, and my career? A tricky thing about this actuarial set-up of ours is that we are required to use judgment, and to hold ourselves accountable for said judgment.

This is especially difficult for the typical risk-averse personality type so ubiquitous in our line of work.

The IFoA certainly places weight on the importance of judgment. It forms an explicit development heading in our work-based skills requirements, and there was a ‘Getting better judgement’ working party in 2014 that focused on how we might ensure judgments are good quality, that is, as free from bias as possible. There’ll be a presentation on the same topic at the Momentum Conference in December.

The working party examined human behavioural habits to work out ways to avoid common judgment pitfalls in actuarial work. You’ll be familiar with some of the behavioural economics side of things if you have studied CT8 – the framing of situations that might lead us to certain conclusions, for example. It certainly acknowledges what a problematic area judgment can be: not only if you’re an actuarial student, or an indecisive soul like yours truly, but for all of us.

Working out the knots

As actuaries, many of the decisions we advise on or affect every day will have long-term implications. The good news is that, in accordance with this, our training makes us more qualified to make judgments relating 

to the financial future than the layperson. Which, incidentally, sets such circumstances apart from matters of cultural decorum or those of the heart. That’s why actuaries are – sorry – better at technical problems than anything to do with social nuance.

While they’re useful, this isn’t something that exams will help us with much. I hear that it’s experience, especially, that will lead you to be able to make good judgments, and to be confident in making them. So we students can have some comfort not only that judgment is tricky for everyone else, too, but that we’ll get better and better at it as our careers unfold. Of course, I only mean this in terms of actuarial work. I can’t help on the life partner point. To apply an actuarial approach, the best solution I can think of is to get married multiple times. After all, we all know that the bigger the sample size, the better.