In Rizwan Majeed Khan's letter (The Actuary, April 2014), he calls for more mathematically oriented exams. Over the past 20 years, I have built up some sympathy with this view - at least from the UK perspective - and believe a proper debate is needed.
Mathematicians (including statisticians, operational research and computer scientists) who work in the field of 'big data', perhaps more technically labelled as 'data analytics' or 'data science', seem to have mathematical ability which is often stronger than that of many actuaries. And it seems to be these areas where there has been 'big growth' over the last decade (I hear stories of one mature organisation increasing numbers of data analysts from 30 to 200 people in two years and they are by no means alone). Yet outside some insurance applications on pricing, I have been told this is an "actuary-free" zone and I'm not aware of any material counter-evidence. This is one of the reasons for suggesting a proper analysis, since actuaries have the potential and should, in my view, be positively getting into new highly valued and rewarding fields.
To those who argue we need to have actuaries who can also communicate and write reports, I would agree. But I would ask for evidence that the essay style required in some of the exams, has done anything to make actuaries better at communicating than other mathematicians not taking actuarial exams.
I am conscious of what a senior civil servant once said to me: "Actuaries come across as stuck in their ways and wanting to avoid change." Consistent with this message, and on some scenarios for the long-term effects of changes in UK private sector pensions, there is clearly an option to keep the exams broadly as they are and simply welcome the long-term goal of a future expectation of life and general insurance. While this option has a lot going for it, I know many do not share this goal including those, like me, who support the sentiment in Kelvin Chamunorwa's April editorial that actuaries should critically inform wider business decisions. But outside insurance and DB pensions, what is the evidence on our reputation for this?
The long-term future for actuaries in the profession's home UK base is at a crossroads. Mr Khan's letter seems to be a good trigger for reviewing options. We should ask what we expect actuaries of the future to need by way of mathematical ability, to ask what should be in the exams and ask how long it should take to qualify once ability is proven. We should ask what the best answers to these questions are in the competitive world for quality graduates while maintaining a proper sense of realism. Looking at the exams is a necessary step.
Try answering the following questions to see how you measure up to the booming work for mathematicians:
1. Who was Thomas Bayes and what is he famous for?
2. What is the GLM?
3. What is boot strapping?
4. What sort of software is R and can you use it?
5. What are the four Vs?
6. In the context of this letter, what can fire hose deliver?
7. What is Nate Silver famous for?
8. Name the leading actress in Zero Dark Thirty and what is the relevance of this question?
9. What is the difference you might get in newspaper headlines if you issue a press release saying: (a) up to 100,000 people may die; or (b) the chances of there being more than 100,000 deaths is very small
10. Have you ever tweeted?
Trevor Llanwarne, 28 April
Answers will be published in the next issue of The Actuary
The editor welcomes readers' letters but reserves the right to edit them for publication. Please email [email protected]. The deadline for receiving letters for the July issue is 18 June 2014.