Covid-19: Actuaries reflect on the dramatic impacts of the global pandemic

woman presenting spreadsheet to man in Covid secure office

Actuaries, like almost everyone else in the world, had to suddenly change the way they work and live and  - in common with most people - they managed to make that rapid shift.  

But unlike most, actuaries at all levels of seniority and in all disciplines were placed in a high pressure and somewhat unique position.

Everyone from companies and regulators, to governments and the public, were looking to them to help gain an understanding of how this pandemic was likely to play out.

“We came under a lot of pressure,” says Mumbai-based Raunak Jha, founder of RJ Actuaries and Consultants.

“The regulator’s attention shifted quickly to insurance and we had to figure out how to juggle between existing and new products. We had to do the number-crunching and come up with future scenarios, but we didn’t have that past experience to rely on.”

Likewise, Colin Dutkiewicz, Global Head of Life at Aon Reinsurance Solutions in London found that the demand for actuarial resource kicked in quickly and didn’t let up for several months.

“When lockdown started in March, I was working 70-hour weeks,” he says. “Everyone wanted advice and a position.”

Describing the period between March and May as “insane”, he says that a many of his peers are now suffering from burnout and picking their battles rather than trying to respond to everything.

Although actuaries appear to have been able to manage the demands placed upon them, the nature and scale of the pandemic brought unique challenges.

Inconceivable magnitude

“As actuaries we allow for adverse deviations or contingencies that are lesser known about within our calculations, however  the scale and magnitude of the impact of this pandemic on actuarial work was inconceivable,” says Harshitta Malakar, assistant manager at KPMG in Bangalore.

Due to the high levels of uncertainty, it has been difficult to draw conclusions on what you call a “reasonable” number and ways to approach it.  We have noted clients hold on to less data-driven initial assumptions for a few months (depending upon the class of business), and by the second lockdown, slowly transitioned to feeding through actual experience into assumptions. It’s still quite a grey area out there and it’s difficult to say yet how things might develop over time.”

But despite the profession’s ability to step up and provide some level of insight in incredibly trying circumstances, there is still a frustration that few, outside of the industries that rely upon actuarial science, are willing to listen to what actuaries believe the data is telling us.

“Lots of people think this is over and we can get back to normal. But it’s not,” warns Dutkiewicz.

“There is still a tonne to be done. For financial services, it is harder to recover as people are losing jobs and all those other ricochet effects that have nothing to do with Covid per se, will take a few years to work through the market.”

He believes that we are only at the end of the beginning and that those ricochets he predicts will continue to have an impact long after the initial crisis has passed.

Actuaries are now already looking to the long-term effects of Covid-19 on society and the economy.

“It’s too early to say, but we need to start asking how all of this going to affect mortality and morbidity going forward,” says Scott Reid, Global Protection and Analytics actuary at Zurich.

“We need to assess how material this will be, but it is hard to say at this stage. We are just trying to assess the size of the problem and to understand the consequences caused by the disruption to our healthcare systems that could result in many diseases being diagnosed at a later and less treatable stage.”

He points to the fact that many people will have been put off going to the doctors, and when they do start returning for check-ups and treatment, it is likely that diseases such as cancer or diabetes will be at more advanced stages.

Inevitable frustrations

However there have been inevitable frustrations along the way.

As Dutkiewicz puts it: “If we produce a model and something is done in response to that, that feels good. What doesn’t feel good is the Cassandra effect.”

He explains that Cassandra was a Trojan priestess who was cursed by the Greek god Apollo to be able to see the future but be believed by nobody.

“That is where it is frustrating,” he says. “Seeing people drawing the wrong conclusion and you just tear your hair out.”

Actuaries are also thinking about what lessons can be learned from this extraordinary period in human history.

“More actuaries need to come out of the shadows. Collaborate more, conduct more research, pick up more problem statements and help solve the bigger problems [in society],” says Jha.

“I feel that there is so much the profession can provide to society and so much more we can do, using more channels for this outreach.”

And it is the use of those communications channels Jha refers to that are going to be crucial if the profession has any hope of securing itself a higher profile role in society and the decisions that are taken by the governments of those societies.

“There is a communication thing here,” says Reid.

 "We are not necessarily the most natural communicators, but we do need to produce shorter key messages that are more accessible to the wider public.

“Actuaries are good at producing high quality technical information that is picked up by actuaries and data scientists but talking to the public requires a proper communication strategy around how we do that more effectively."

 A clearer style of communication may also help attract the next generation of actuaries to the profession.

“Actuaries should talk and express themselves in a way that helps make sure the numbers make sense. It will encourage the new generation to pick this up as a preferred career choice,” says Jha.

And in a challenge to the many thousands of individuals who make up this profession, she argues: “Your influence is increasing, so the need to communicate is increasing.”

Or as Dutkiewicz puts it: “We know a lot of stuff, but we have to be far better at doing this quickly and communicating [what we do]. As an actuary, you need to have the bigger view and step up. If we are going to say that we have a role to play in solving these big societal problems, we can’t just stay in our roles. We need to step up beyond the day to day job.”

All the views in this article reflect the views of the individuals quoted, not their employers.