Bob Charles, Coherent, previews his IFoA Asia Conference 2023 presentation on how the profession can employ emerging technologies to reach new heights
I’m excited to be attending the IFoA Asia Conference 2023 and discussing the future of actuarial technology with actuaries from a diverse range of practice areas and locations.
I’ll be using an analogy from the history of the internet that reflects my experience over my working lifetime:
Meanwhile, actuarial technology has been on a journey of its own:
Excel was launched in 1985. Actuaries quickly adopted it, relying on its flexibility to create complex business logic and models. The actuarial profession evolved with limited reliance on programming skills as actuaries became self-sufficient in Excel.
In the Casualty Actuarial Society’s First Annual Technology Survey, 94% of actuaries reported that they used Excel daily, applying Visual Basic Analysis (VBA) to circumvent Excel’s limitations. However, as models became more complex, Excel’s limitations became more acute:
These limitations led to too many mistakes and inadequate processing performance, which led to Actuary 2.0.
Insurers were sold enterprise-grade actuarial software to replace Excel and encompass the entire actuarial process. While this solution had significant potential, the reality has been complex and difficult to implement. Some aspects of the actuarial process have moved to cloud-based enterprise platforms, but other components remained in Excel, as the vision of a ‘single platform’ was unreachable for most insurers.
Limitations of enterprise-wide actuarial systems included:
Insurers often don’t have the specialised skill sets to make this financial transformation work. A single, enterprise-wide solution for the entire actuarial process is as unfeasible as relying entirely on Excel alone to produce scalable, controlled results.
Neither Excel on its own nor a forced system that eliminates Excel entirely is feasible long term.
Excel’s staying power, despite repeated attempts to shift to ‘systems’, is due to its unmatched ability to quickly create complex business logic.
Actuarial financial transformation needs to retain Excel while automating processes to bring much-needed scale, control and governance.
Since there is no single software for end-to-end actuarial processes, actuaries will increase their awareness of the range of often easy-to-use software tools that are available for data management, calculations and reporting.
I’m saving this for the IFoA Asia Conference 2023. See you there!
Don’t miss Bob Charles at the IFoA Asia Conference 2023 on 25 September, in Kuala Lumpur. Book your place before 15 September.
