Richard Purcell says that better narratives are needed if actuaries are to thrive in a post-truth world
Telling fact from fiction in this post-truth era is increasingly difficult. The world is becoming less black and white, and increasingly grey. We see statements or theories we previously took as fact, turn out to be fiction. This is also true in the world of pensions and insurance, as demonstrated by two articles this month. The first questions the idea that adverse selection is always bad. Pradip Tapadar and Guy Thomas suggest a little can actually be good. Then there is the earnings replacement ratio - a common rule of thumb used to form our personal pension plans. Bonnie-Jeanne MacDonald says this accepted thinking is inadequate. It's not all bad news though. Take the old investment adage: 'Sell in May and go away, but buy back by St Leger Day'. Cormac Gleeson and Paul O’Dwyer demonstrate there is some truth to this assertion in most, but not all, historical cases.
These examples show how a good argument can distract us from the truth, and that we should never take things at face value. If we are to return to a world without so many 'alternative facts', Paul Harwood believes we also need to offer more convincing narratives alongside the facts in his final instalment on risk management in practice. Paul Sweeting has something to say on risk, having made a significant contribution to this space and the CERA qualification. He shares his thoughts on this, and his research priorities, in this month’s interview. Sweeting is proof that actuaries can create compelling narratives too, as he discusses his excursion into the world of fiction with a crime thriller and a children's book. Perhaps we can all take a leaf out of Sweeting's book (pardon the pun), by providing better narratives to our stakeholders. We may just make the world a little less grey in the process. Something you don't always hear said about actuaries.