With 2021 closing in, Tom Durkin reflects on conversations he has had with over 50 Chief Actuaries during the last year.
The overriding sense is one of positivity. Challenges: Yes. Regulatory burden: Yes. Resource constraints: Often. Data issues: Still in the long grass. However, it is clear that being a Chief Actuary in 2021 is an exciting role, with a real focus on the future and how we can continue to evolve as an actuarial profession.
There are lots of reasons to be cheerful. Reflecting on just three:
Board engagement
Earlier in 2021, we published our research into how actuaries and boards can most effectively work together. This brought home just how much insurance boards value timely and insightful actuarial analysis.
We’ve seen an increase in Chief Actuary face time with boards and, in return, the boards providing meaningful and helpful challenge. Together, this has led to a ‘virtuous cycle’ for many insurers – where each interaction between the actuaries and the board is leading to better and more collaborative working practices.
Boards have told us that they particularly value actuarial work that clearly sets out the “so what”, the “what if” and the “what next”. Chief Actuaries have also reported how well communication with board members has worked in the virtual/hybrid world. Read more in our report which also includes a number of really helpful checklists so that you can assess the progress of your firm against the wider market.
Analytics
At LCP’s Chief Actuary roundtable in October, we polled Chief Actuaries on the top areas for future development in actuarial work.
Analytics/machine learning placed first, followed closely by data wrangling and coding. I’m pleased to say that people leadership and communications were also in the top 5 – given that these are also critical for a successful analytics strategy!
Analytics is already transforming how actuaries are delivering value for insurers, and this trend is set to continue. The tools and techniques are maturing quickly, including platforms such as LCP InsurSight, that can swiftly embed analytics within your workflow.
Many firms now have a clear strategy for adopting analytics. The most successful approaches are those that are supported by a sharp focus on the business objectives, and a staged approach to “levelling-up”.
Watch more here how machine learning is helping insurers’ level-up their reserving processes.
Hybrid working
The insurance industry has responded very positively to remote working over lock-down, and more recently transitioning to a hybrid working world.
The overwhelming feedback is that striking a balance is key – recognising the different benefits that come from both working remotely, and being face to face with your team and wider stakeholders.
One framework for thinking this through has particularly resonated with me – and that is to ensure that, when making decisions on hybrid working, you carefully balance the needs of three key sets of stakeholders:
- Individuals – their needs, preferences and working practices. Some individuals simply prefer more time in their own space to get work done, or need the wider flexibility that virtual working can provide.
- The team – ensuring that there is enough time as a team to build and maintain your culture. For those individuals who get energy from in-person collaboration and the buzz of office work… well, they won’t get much if they’re in the office solo and the rest of the team are working remotely.
- The business – ensuring that the commercial aspects of work continue to be met. Eg, face to face meetings with providers or clients, and ensuring that hybrid working meets these requirements too.
Effective hybrid working was one of the topics that Seema Thaper and I presented on together at GIRO this year. This was part of a wider presentation sharing practical steps you can take now, to develop your risk and actuarial teams for the future. Watch more here1.
An end of year blog wouldn’t be complete without a 2022 resolution.
On that note, my top resolution for next year is to continue to help and encourage us to evolve as a profession, and to take the best advantage of the modern tools and technology available to us. What’s yours?
We regularly run roundtables on a range of topics, including for Chief Actuaries, NEDs, CROs, Heads of Capital and Heads of Reserving. Please do get in touch if you would like us to add you to the invite list to attend future events.
1If you’re not a member of the IFoA and would like to hear more about the presentation, then feel free to get in contact.