Solving complex and challenging issues is part of an actuary's mindset, says Deepak Jobanputra
An esteemed ex-colleague and friend of mine often remarks that a 'good' actuary will always start a response to a question with the answer "it depends". He also happens to be a non-actuary who is very fond of actuarial habits and so, rather than it being a 'jab' at actuaries, I have always interpreted it positively. This statement of "it depends" conveys something very important when considered closely. It recognises the complexity of the issues that we are often trying to solve, and the number of potential outcomes based on a range of assumptions and other factors. There are plentiful examples of this notion to be found within The Actuary.
This month our lead article on the carbon bubble considers the issue that a global society faces in balancing the challenges posed through limiting the use of fossil fuels against the risk of a further financial crisis. This topic is likely to take centre-stage at prominent political and economic summits in future years. Actuaries have a great opportunity to take a leading role in shaping the future strategy in this area.
We also have an interview with the highly respected actuary and economist, Philip Booth. Philip holds strong opinions and these are presented candidly in the article. I am intrigued with the discussions on free markets and the role of regulation. It can be difficult to argue against the foundation of regulation as its intention is to bring order to markets and to provide protection against abuse for key stakeholders. There is, however, a cost to regulation. I hope that this cost benefit consideration creates some discussion and I would love to hear from you on this topic. It is a debate that clearly does not have a simple solution and one that has a high probability of featuring the infamous "it depends".
Extending this discourse on regulation, our soapbox this month dares to revisit the topic of Solvency II citing the unfortunate uncertainty of timing - driven clearly by the complexity of such a huge task. As an optimist, I do hope that regulators are able to agree on a workable solution with the insurance industry in the not too distant future.