David Hare describes how communication is becoming increasingly important in the actuarial profession
Actuaries are valued for their skills with numbers - the ability to take complex mathematical problems, create sophisticated models and measure the risk posed, and probability of future events. In fact, if you look up the definition online, an actuary is described as "a person who compiles and analyses statistics and uses them to calculate insurance risks and premiums".
The emphasis, therefore, has tended to be on their technical and quantitative skills - perhaps to the neglect of others. However, as the role has evolved, so too have the requirements of the profession; particularly after the implementation of Solvency II, at the beginning of 2016.
While Solvency II has arguably narrowed the regulatory role for the actuarial function in life insurers (at least in the UK), it has created a new actuarial regulatory role in non-life, and for all insurance actuaries, it opens up an opportunity to have a greater impact on their businesses if they can rise to the challenge.
For many, it will mean reassessing their aptitudes - not necessarily their technical expertise; rather, their ability to use softer skills and deal with qualitative matters.
One of the most important will be communication. After all, this is absolutely crucial to an actuary's role - no matter how good their technical skills might be, these can be rendered redundant if the actuary is unable to help others understand the information with which they are being presented, and how they are meant to use it.
This applies equally to oral and written communication. To be effective communicators, actuaries need to resist strongly the temptation (if not natural tendency!) to speak too quickly, give too much information, and produce reports that are likely to be far too long. When you consider that the average set of board papers will typically consist of hundreds of pages, it becomes obvious that this is a potentially expensive problem - important issues can be missed amid the noise.
I would, therefore, encourage actuaries to reflect on how they come across. They should ask for feedback from others on how they interact and try, wherever possible, to think about the other person involved.
Another important point of consideration is how an actuary's audience wants to receive information and what it needs to conclude from the findings. In many cases, it'll be senior management teams of organisations who, for the most part, are 'why' communicators - they want to know why they are listening to you, or reading a particular paper, and want this made clear up front.
Moreover, another suggestion I make to all professionals in our field is to read voraciously. They don't necessarily need to read about archaeology or botany (!), but books and papers on the financial world, people management, or current affairs will help them understand how information can be presented in different ways and styles.
You may, quite rightly, be wondering what the benefit of all this might be. For one, it would help make decision-making less torturous. With fewer pieces of information to decipher, board members will be able to spend their time thinking about the choices that really matter, which could strengthen governance and accelerate important changes within organisations.
The role of the actuary has changed significantly in my three decades of working in the profession - but seldom has there been a better time for it to take a more central role in shaping the strategies of so many businesses. As the profession evolves, so too should its definition and the people within it. For now, that will mean embracing three soft skills: empathy, erudition, and, most importantly, communication.
David Hare is a partner at Deloitte