As it turns 125, Actuaries Institute members are confident their skills are as essential as ever

By Miranda Maxwell

We’re in a great space for the future,” Elayne Grace says as the Actuaries Institute commemorates its 125th birthday. “Anywhere there’s uncertainty and data analysis required, we can add value.”

Though it took around a century – until the 1990s – to have women in the top roles, today Ms Grace is the Institute’s Chief Executive and Annette King its eighth female president. Half its 5500 members are under 35 and more than a third are women.

The Actuaries Institute says the world is now entering “the age of the actuary because it is the age of data”.

Far from being superseded, the relevance of actuaries in a world of artificial intelligence, machine learning and data science has never been more vital.

Actuaries are there to harness, integrate and question that data, and make sure it is used wisely.

“We’re doing well, we’re in demand,” Ms Grace tells Insurance News. “Young people want to get in jobs that are meaningful and actually deliver value, and companies also want that.

“Our essence has not changed – the fundamentals are the same, the same social purpose, the same analysing of information – but everything else has.

“We have continued to evolve. We work right across data science, retail, telcos, climate change, ESG (environmental and social governance), cyber.”

A new challenge is the tsunami of data now available and a requirement for extreme discipline by actuaries as they find pathways forward to be sure “you don’t provide a solution that could cause problems later”.

As the venerable Actuaries Institute celebrates its birthday and reflects all the way back to its inception by a group of 17 “like-minded individuals” in October 1897, the guiding principle at the very beginning – to protect Australians from an uncertain future by “wresting the truth from data” – is as true as it ever was.

From aspiring actuaries enduring long sea voyages to sit the fellowship exam in the UK (and a membership charge of five shillings), pioneering work by local actuaries Geoff Lane and Garth Ward on the use of early computers in valuations, and Catherine Prime becoming the first Australian and first female president of the International Actuarial Association, the Institute has adapted and progressed over its 125-year existence.

“It is a huge milestone for us as we celebrate our history, and it’s an interesting point of reflection,” Ms Grace says. “It’s a long time, but we also really look forward to the future, the age of data, our skills and solving the many problems in the world, bringing our particular value and professionalism.”

Next year the Institute will host the International Congress of Actuaries, a global meeting in Sydney of the brightest actuarial minds. The five-day ICA2023 will bring together 500 speakers from more than 50 countries to discuss technology, climate change, cyber risk, the rise of financial services in Asia, the impact of IFRS 17, the age of the consumer and many other topics.

Ms Grace says today’s focus for Australia’s actuaries involves balancing pricing specific risks with the needs of society as a whole, and evaluating “what does fairness mean?”.

While better assessment of risks such as catastrophes has led to premium changes, bringing a “social purpose” to problems is at the core of actuarial world. “It’s in our DNA,” she says.

Recognition that certain areas are riskier than others and must be somehow accounted for is needed.

“How do we accommodate that into the mix fairly? It is difficult,” she says. “It used to be very much that fairness was the insurance premium that reflected your risk and the more data you had the more accurately you could price that.”

Now it’s about considering fairness and access to insurance.

Making insurance “very much just a singular product for each person” could see the whole system break down and the government having to step in.

“These are the interesting questions we need to investigate. Insurance increases the resilience of our community, and our businesses, but how do we make sure those systems are sustainable?”

Promisingly, this year has finally seen a “huge step-change” in attitudes to mitigating severe weather risk in the wake of record floods, and Ms Grace has observed “much more of an understanding and less of a blame game, which is an acknowledgement of the risk being increased”.

Looking ahead, the Institute says its tools will change – and also that “many things will stay the same”.

“We’ll still be helping business run their operations and drive their strategy using our mathematical skills, crystalline thinking and rigorously-assessed evidence,” it says. “Our expertise will still be helping to inform public policy and drive change in areas like climate, health, energy adaptation – and public policy fields we don’t even have names for yet.”