Kelvin Chamunorwa looks back at the beginnings of actuarial science and the challenges ahead for the profession
The history of the actuarial profession makes for fascinating reading. Recently I came across an article on the first modern-day actuary in the late 18th century, William Morgan. As an actuary leading Equitable Life at the time, Morgan did much to develop actuarial science as we know it today. Most notably, he recognised the need to calculate premiums with reference to statistical experience. He also created the concept of with-profits policies, which arguably later contributed to complications at Equitable Life by the turn of the 21st century.
In the aftermath of events at Equitable Life, concerns were raised about the actuarial profession and Sir Derek Morris undertook a wide-ranging independent review of the profession. It is now 10 years since the Morris Review and last month I was invited to attend an event to mark that milestone.
Sir Derek spoke about the conclusions of his report and the proposals he put forward for the actuarial profession, including the independent oversight of its regulation by the Financial Reporting Council.
As a relatively recent entrant to the profession, it would be easy to disassociate from events of the past, but there are important lessons to learn for the years ahead. For example, more could be done to improve clarity of actuarial advice. Also, the globalisation of business and the profession means an increasingly global regulatory approach - Derek Cribb touches on the implications of this trend (A blueprint for good practice).
In other articles, we interview Adrian Gore, an actuary who is founder and group chief executive of Discovery. Gore demonstrates entrepreneurial flair as he describes the unique business model he has developed, incentivising wellness and sharing its value (Changing the face of insurance). With the much-heralded launch of the Apple Watch last month, Richard Purcell considers the possibilities presented by wearable technology to dynamically assess risk for health insurance and reward healthy behaviour (Left to their own devices).
The actuarial profession has come a long way from its earliest roots but the challenge remains to maintain sound actuarial principles and increase transparency, to foster sustainable business and a thriving society.