Nick Silver and Lucy Saye explore the skillsets that actuaries will need in the future to sustainably add value
Actuaries have a powerful toolkit that puts us in a strong position to tackle complex societal challenges. Our professionalism, exemplified by the Actuaries’ Code and our professional standards, has established and maintains our reputation for quality work, setting us apart from others with similar skillsets. Our core areas of knowledge include socially useful topics such as pensions, insurance and investment, and our expertise in long-term risk management is fairly unique. This is powerful when combined with the ability to communicate concepts in an accessible way.
These skills, however, are not sufficient on their own to secure the profession’s future in the face of evolving societal and environmental challenges – but they could be expanded to create actuarial opportunities and benefit society.
New problems
Those of us who work in sustainability recognise the impacts that the institutions we manage have on society, yet in the management of these institutions, we often only consider issues of solvency. Issues such as environmental breakdown, inequality, and emerging risks, such as infectious diseases, involve long-term investment and risk management, and are occurring in a world awash with data. The potential and need for actuaries to credibly deploy our skillsets in these areas is vast.
Actuaries tend to be rule takers rather than rule makers – the building maintenance rather than the architect. This isn’t because we aren’t suitably qualified; we often have detailed knowledge of such topics. If the rules under which we operate could have more positive social consequences – or cause damage – we don’t consider it our responsibility. Many emerging risks require engagement at the political and social levels; this is not currently our core skill, but it needs to be, or we risk becoming irrelevant.
The importance of actuaries in statutory roles is widely recognised, but we have more to offer. Disruption from technology, as well as societal and environmental challenges, present opportunities for actuaries to apply their skillsets and solve new problems, as well as examining the impacts of this emerging risk landscape on their current roles. For example, when incorporating environmental risks into the management of an insurance company, actuarial skillsets may be employed in reviewing and challenging risk frameworks and policies (an example of adapting existing roles), as well as feeding into strategy discussions alongside other professionals (an example of applying actuarial skillsets in new areas). Even actuaries in technical actuarial roles, such as those involved in calculating capital requirements, will need to consider whether their existing approach sufficiently captures these emerging risks.
New skills
New skillsets, such as systems thinking and collaboration, will need to be nurtured, so that the links and feedbacks between technological change and societal challenges and the businesses we manage are recognised. Project New Horizon emphasises collaboration and dilemma navigation – a key lesson being that the solutions we develop are better when we learn from others, lend our perspectives and generate collective buy-in. Our communication skills should move beyond explanation and towards collaboration.
A critical element is understanding our own agency – our actions influence outcomes. Markets, insurance and regulation are social phenomena, and the actions we take as individuals and as a profession shape those outcomes. It should be evident that embracing diversity can unlock the skillsets and perspectives we require. We may need to look at the entry requirements for the profession to encourage more applicants with social science or entrepreneurial backgrounds, as well as the potential for bringing in honorary members who are targeted towards certain domains. In terms of existing members, we should explore the potential for alternative examination subjects in non-traditional fields, and encourage broader skills and curiosity in our continuing professional development requirements.
Many of the Project New Horizon participants are already living these narratives; members range from those working in sustainability roles to those working with governments and in entrepreneurial roles with digital products and start-ups. Many are also senior volunteers within the profession, lending their personal time to secure the future they want for the profession. The network built through Project New Horizon will support those who are creating change while inspiring others to be more adventurous, and opening up opportunities for actuaries to lend their skillsets to tackle societal challenges.
Nick Silver is founder and chair of the Climate Bonds Initiative, founder and director of Radix Big Tent Ideas Festival and chair of Callund Consulting
Lucy Saye is a manager at Deloitte
Image credit | Getty
