 By Tom Murray, Head of Product Strategy, Exaxe, www.exaxe.com
When I was asked to write a technology column for the Actuarial Post, I pondered for a while about what topics would interest actuaries. Of course the constant changes in the technology world are always interesting; particularly in terms of the way these changes can affect the life and pensions industry. And so I set about producing a list of current topics that have the potential to bring great changes to our industry and that might inspire discussion over the next few months such as the improvements in modelling capabilities, the demands of ever increasing regulation and the emergence of the mobile, cloud and social platforms.
As I considered this list, I started thinking about the current place of IT in actuarial departments and I realised that things had changed significantly since I first started dealing with the actuarial department in Canada Life. In those days, there was a strong affinity between the IT and Actuarial department, perhaps because the actuaries were generally the only ones who understood what the IT guys were talking about, as they were heavy users of technology themselves.
The actuaries were always supporters of the IT departments change programmes; their extensive use of spreadsheets and ability to programme the more mathematical languages made them early adopters of whatever new technological advance was current. It was the early days of the mass introduction of computing into businesses that, like the hare in Aesop’s fable, the actuaries sped past the tortoise, that was the rest of the organisation, and not only embraced technological advance but worked to further improve it.
Suddenly it all shuddered to a halt. Actuaries, in many life and pension companies, have come to be seen as technology laggards as they have stuck with their spreadsheets and have tended to make little use of any of the newer computing tools that have emerged since the turn of the century.
How did this happen? How did we get to a place where the early adopters of technology were left behind and the actuarial department became a museum for the earlier ages of IT?
I can see how the sheer power of spreadsheets was alluring to actuaries, as it gave them the capability to build ever more complex workbooks which could crunch enormous amounts of numbers effortlessly. However, this approach appears to have moved actuaries away from programming themselves and therefore away from the advances in the IT area.
While actuaries bury themselves in their spreadsheets, the rest of the world has moved on. The actuarial department has concentrated on building evermore-complex interlinked spreadsheets that fulfil the business requirement but don’t have the interconnectivity expected of more modern technologies. Come the boom of personal device usage and smart devices such as phones and tablets, spreadsheets became a shackle to creativity in the actuarial department instead of the enabler that they once were.
Of course I’m not talking about all actuarial departments, but there is no doubt that there are significant numbers that have suddenly turned conservative and are resisting the kind of changes that are needed to bring the life and pensions industry into the 21st century. Anecdotal evidence suggests that the out-dated technologies in use are one of the biggest shocks trainee actuaries get when they first joined an actuarial department. It may even be playing a part in discouraging new entrants into the profession.
We need to look at the reasons for this shift from being early adopters to being IT laggards. It clearly isn’t the lack of ability to understand the evolution of information technology. However, one of the key differences between newer technologies and those of the past is that nowadays technologies are more layered and make use of more black box components giving less direct control to the programmers than when people were programming almost directly to the metal.
Could it be that it is this loss of control that older actuaries are seeking to avoid? A sentimental attachment to the days when programmers directly coded close to the metal is an attitude that needs to be shaken off, as by holding on to that level of control, actuaries are preventing themselves from exploiting the latest benefits of technologies and restricting their own opportunities too much.
In the meantime, marketing, sales and operations are embracing cloud technologies, mobile platforms and social networks to transform their working environment and are thereby bringing their achievements to a whole new level. Actuaries need to start becoming more comfortable with the new technological paradigms, not only to improve their own work environment and to keep the interest of the next generation but also because, like at the earlier stages of computing, they have a huge amount to contribute to the evolution of the whole new technology age.
But it means letting go of some of the old approaches that they are comfortable with, just as they did through the second half of the last century when first mainframes and then personal computers were being introduced.
It’s about time the hare woke up started to race again. If it does, I’ve no doubt it will leave the tortoise in its wake and that both the actuarial and the IT world will benefit.
Tom is Head of Product Strategy at Exaxe with primary responsibility of overseeing product direction. Tom has extensive experience of managing web based insurance software from conceptual design through to commercial release and beyond. Tom has been leading the development of the Exaxe Internet insurance architecture since August 1999.
If you would like to read more of Tom’s articles on life and pensions, please visit the Exaxe blog: http://www.exaxe.com/blog
|
