Understanding Actuarial Function Performance: Looking Beyond the Reporting Cycle
In this edition of Five Minutes with MBE, we speak to Maksud Patel, Actuarial Director at MBE Consulting, about what high-performing actuarial functions look like in practice, where operational challenges can arise and how leaders can identify and prioritise opportunities for improvement.
As actuarial functions face increasing demands to deliver more efficiently, adapt to change and provide greater business value, understanding what drives performance has become increasingly important.
Defining a High-Performing Actuarial Function
When you talk about a high-performing actuarial function, what does that actually mean in practice?
For me, a high-performing actuarial function is one that delivers reliable work efficiently, but also has the capacity to look beyond the immediate reporting cycle.
It should be able to explain what the numbers mean, challenge assumptions, support decisions and respond to change without everything becoming a major exercise.
So performance is not just about whether the work gets done. It is also about how well the function operates, how resilient it is and how much value it is able to add beyond the core technical output.
The Hidden Performance Gap
Why can it be difficult for actuarial leaders to get an objective view of how well their function is really performing?
It can be difficult because most actuarial functions are judged first on whether they deliver what they are supposed to deliver.
If the numbers are produced, the reporting timetable is met and there are no obvious issues, it is easy to assume the function is performing well.
But that can hide a lot of underlying inefficiency. Manual workarounds, repeated reconciliations, key-person dependencies or processes that take far more effort than they should. Those things are often visible to the team, but not always visible at a leadership level.
When Meeting Deadlines Isn’t Enough
Can an actuarial function deliver its reporting on time and still have significant underlying performance issues?
Absolutely. A team can meet every reporting deadline and still be relying on a lot of manual intervention behind the scenes.
You can have people working long hours, spreadsheets and workarounds holding processes together or too much knowledge sitting with one or two people. From the outside, the function looks like it is delivering. Internally, it may be inefficient, fragile or difficult to scale.
That is why I think it is important to look beyond the output itself and understand how the work is actually being delivered.
Identifying the Right Areas for Improvement
When actuarial functions look to improve performance, where do they typically focus first and what can get overlooked?
The first instinct is often to look at systems or models, because they are visible and usually easier to point to as the source of a problem.
Sometimes that is the right place to start, but just as often the issue sits elsewhere such as in the process around the model, the quality of the data going into it, unclear ownership or the way work is passed between teams.
If you only fix the technology, you can end up automating an inefficient process rather than improving the way the function actually operates.
Understanding the Six APM™ Enablers
If leaders want a more rounded view of actuarial performance, what areas should they be looking at?
I think you need to look across the whole operating environment, not just one part of it.
For us, that means looking at six areas: People, Processes, Methodologies, Systems, Models and Data.
The important point is that they are connected. A strong model will not solve poor data, just as good systems will not compensate for unclear processes or gaps in capability. Looking across all six gives a much more realistic view of how the function is performing.
Introducing the APM™ Function Performance Check
You’ve recently introduced the APM™ Function Performance Check. What is it intended to help actuarial leaders understand?
The idea is to give actuarial leaders a quick and structured way to understand how well their function is performing across those six key areas.
It is not intended to replace a full APM™ Assessment. The Performance Check is really a starting point, something that can highlight where there may be strengths, imbalances or areas that are worth looking at in more detail. The full Assessment goes much deeper into those areas and the underlying causes.
Sometimes simply seeing that initial picture laid out clearly can help start a much better conversation about where improvement effort should go.
Interpreting Performance Results
When leaders look at their results, what kinds of patterns or warning signs should they pay attention to?
Personally, I would look less at any single score and more at the pattern across the six areas.
For example, a function might be strong in models and systems but weaker in processes or data. That can tell you that the issue is not necessarily the technical capability itself, but how effectively the wider operating environment supports it.
The useful part is identifying where there are imbalances, recurring pressure points or areas that appear to be holding the rest of the function back.
If the results point to several areas for improvement, how should leaders decide where to focus first?
I would start with the areas that are creating the most operational friction or risk, rather than simply choosing the lowest score.
Some issues will have a wider knock-on effect than others. Poor data, for example, can create problems across modelling, reporting and controls. Equally, a key-person dependency may be a bigger immediate risk than a process that is simply inefficient.
The priority should be where improvement will make the biggest practical difference to how the function operates.
Turning Insights into Action
Once leaders have identified their priority areas, how should they turn those insights into practical improvements?
The first step is to understand the root cause rather than jump straight to a solution.
Once that is clear, the improvement needs an owner, a realistic sequence and a way to measure whether it is actually making a difference.
I also think it helps to separate quick wins from more structural changes. Some issues can be resolved quite quickly, while others may need changes to process, systems, capability or governance over a longer period.
Taking the First Step
If an actuarial leader wanted to take one practical step today to better understand their function’s performance, where would you suggest they start?
I would start by looking at how the actuarial function operates as a whole, rather than focusing solely on the immediate reporting cycle.
That means asking where the team is spending its time, where work gets stuck, where there is repeated manual effort and where the biggest dependencies sit.
The APM™ Function Performance Check is one way to structure that initial review. It gives leaders a quick view across the six areas and can help identify where a deeper conversation or full APM™ Assessment may be worthwhile.
Understanding Performance. Enabling Actuarial Modernisation.
High-performing actuarial functions are not defined solely by their ability to deliver reports on time. They are defined by how effectively their people, processes, methodologies, systems, models and data work together.
The APM™ Framework provides a structured approach to understanding these interconnected areas and identifying opportunities to improve actuarial function performance.
For actuarial leaders looking to gain a clearer picture of their current operating environment, the APM™ Function Performance Check offers a practical starting point.
Ready to understand how your actuarial function is performing?
Explore the APM™ Function Performance Check and identify potential areas for further discussion and improvement with MBE Consulting.
🔹apm.mbeconsulting.com
Five Minutes With is an MBE Consulting series featuring conversations with our team about the challenges, opportunities and developments shaping the actuarial industry.
