Address by the President of the Institute of Actuaries: Thinking and Behaviour

Abstract

THINKING AND BEHAVIOUR abstractIn a world of transition for all our disciplines, actuaries can get and keep ahead of the changes by, first, getting our thinking right. Right behaviour and actions will follow. We will think about the needs of our employers and clients and present our findings more in the business context; we will look through their needs to the needs and interests of their employees and customers. We will grasp financial economics and learn banking thinking. The profession will raise issues of public interest and inform the debate. Part I. Objectives1 Transition 1.1 We live in troubled times. I do not intend to dwell on them. We are learning our lessons, as are many of our colleagues in other professions and disciplines. The process of learning will continue, as will accepting new realities and adjusting our thinking to demonstrate how we add value in the new environment. We will also contribute proactively to the development of the new environment. My objective, in my Presidential term, is to lead the profession through the transition. Judging by recent experience, the state of transition may itself be permanent.

Measuring and Managing the Economic Risks and Costs of With-Profits Business

“…If we emphasise that to finance directors so that, if they think that they can reduce the best estimate number, it will increase, pound for pound, the risk-based capital number, then we will avoid that behavioural consequence. For those of you who read my Presidential Address (Goford, 2003), you know that I am very interested in behaviour.…”

Education for actuarial quality must develop more than technical competence

“…The research discussed in this paper has been prompted by a number of converging imperatives, including that: -the Actuarial Society intends to offer its own qualification from 2010; -internationally, lifelong professional education is being conceptualised using educational principles to ensure effective learning; and -there is a worldwide trend for consumers and regulators to demand openness, transparency, accountability and trustworthiness in professions (O'Neill, 2002;Goford, 2003). Regarding the first point, the education programme for the Actuarial Society's qualification will need to be relevant for the South African context, while at the same time be acceptable internationally.…”

Professionalism and Trust

“…In her 2002 BBC Reith Lectures, Onora O'Neill explored the concepts of openness, transparency and accountability as a basis for trust in societal relationships (O'Neill, 2002). Jeremy Goford took this up in his Presidential Address to the Institute of Actuaries (Goford, 2002), when he placed emphasis on the need for individual actuaries "to demonstrate, with openness, transparency and accountability, how we make financial sense of the future in both our prudential and our entrepreneurial roles.'' Attractive though the mantra of openness, transparency and accountability may be, these characteristics are necessary, but not sufficient, conditions for the restoration of a satisfactory fiduciary relationship between the professional and the client and other stakeholders.…”