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02

Don't be afraid to give advice

Open-access content Monday 6th February 2017 — updated 5.50pm, Wednesday 29th April 2020

Recently I read a wonderful book called Being Mortal by Atul Gawande, a US doctor of Indian origin. It is extremely well written. What struck me particularly was how the issues facing the medical profession are not dissimilar to those facing the actuarial profession.


Recently I read a wonderful book called Being Mortal by Atul Gawande, a US doctor of Indian origin. It is extremely well written. What struck me particularly was how the issues facing the medical profession are not dissimilar to those facing the actuarial profession.

The announcement of the joint venture with the US Society of Actuaries has led to the creation of CAA Global, the new accrediting body for the Certified Actuarial Analyst examination, which will help the qualification reach its true global potential. We are now in dialogue with other actuarial associations around the world in the hope that they too will embrace this initiative and become destination homes for qualified Certified Actuarial Analysts. This and other recent events have crystallised in my mind the importance of working together as a profession, for the benefit of the whole profession.

The medical profession has made considerable advances in the past 50 years. Conditions that in the past were life threatening now have treatments that either cure, or at least prolong, life that hitherto was doomed. However, as people live longer, medical science fails to address how to manage our mortality. A doctor does not discuss with his patient what it is like to get old and die. The ultimate goal should not be a good death but a good life, all the way to the very end.

Consider a man who suffers from Parkinson's disease or some other condition with widely unpredictable outcome, for which a range of treatments is possible, each with its own range of uncertain outcomes and side effects. He goes to a consultant for advice. What should the consultant do? Recommend the treatment likely to improve his condition most, ignoring side effects, or the one least likely to have adverse side effects? Or a weighted average allowing for the probabilities of expected gains and losses? The last of these would be very difficult to explain.

Increasingly, doctors don't give advice at all, for fear of being sued. They put the facts in front of the patient and let them decide, when what the patient needs is guidance. Also, the fall-back position is more repair work/surgery, which sometimes prolongs life but does not improve its quality.

Does it sound familiar? Of course it does. The financial services industry also runs shy of giving advice. Stockbrokers such as Hargreaves Lansdown issue monthly circulars, which hype a wide variety of investments but do not give advice.

What about actuaries? Our training shows us how to quantify the impact of uncertainty, but we don't tell clients how to deal with it. The irony is that in the field of sports, baseball, football and cricket, analysts have started thinking in terms of probabilities - see Moneyball. We have a great opportunity to break with the past by actually giving conditional advice. Let the client be aware of every branch of the decision-making path. They will then own the decision as if it were their own. It protects us from being sued but, more importantly, we provide a meaningful service.

Icki Iqbal

20 January 2017

 

This article appeared in our February 2017 issue of The Actuary.
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