Actually, I’m an actuary - (25 Jul 2016)
Maybe a comparison with weather forecasters is unfair to actuaries. After all, meteorologists have algorithms, supercomputers to further their voodoo - that and at least the weather is only naturally chaotic. Actuaries must delve into fiscal risk assessment, an environment convoluted by its many stakeholders.
The actuarial profession is one that has largely been absent in the public sphere: partly due to ever more creative organisational designations and partly for the dour stereotype of bean counters, ‘actuary’ is a term one will encounter not so often.
But actuaries can be an integral part of business development. Their qualifications and skill sets encompass a broad gamut - ranging from mathematics and computer science to sociology and other anthropological domains. After all, to assess risk one needs to understand the risk and then offer ways to stave off loss from a less than desirable outcome. Unsurprisingly, actuaries have traditionally been employed in the insurance industry, which thrives by minimising risk to maximise returns. However, with ever greater calls for transparency and regulators’ in-roads into corporate and financial inner workings, the actuarial profession may be at the cusp of a resurgence.
Wilful default, bad debt and potentially large, loss-causing endeavours have brought a renewed onus on lenders and anyone dealing in financial instruments to assess loan facilities and company business not only more diligently, but to be better prepared to understand the risks involved. Calls for transparency and media spotlight on questionable boardroom decisions may not signal an end to cronyism, but it certainly is requiring organisations to be better at disclosing rational and risk.
Like the insurance industry, so fastidious in its exacting standards for risk management, actuaries can provide the wider business community a scientific and formal approach to risk assessment, which can not only assuage investors’ fears, but also keep regulators happy.
Tags : ACTUARY INSURANCE RISK ASSESSMENT FINANCIAL DISCLOSURE