It’s not a lack of activity. It’s a lack of coordination.
Introduction
While the challenges within individual areas of the actuarial function are often well understood, improving overall performance remains difficult.
This is rarely due to a lack of activity. In many insurance companies, significant effort and investment are already underway.
The difficulty lies in how improvement is approached.
Improvement in Isolation
Many initiatives are designed to address specific issues.
A new system is implemented to improve efficiency.
A model is enhanced to increase accuracy.
A data initiative is launched to improve quality and accessibility.
Each of these actions is logical and, in isolation, can deliver meaningful benefits.
However, these initiatives do not always translate into broader improvements in actuarial performance.
Uneven Change Across the Function
One reason for this is that change is often applied unevenly across the function.
Investment and focus may be concentrated in one area, while others remain relatively unchanged. As a result, the benefits of improvement are frequently constrained by what sits around them.
For example, systems may be upgraded without the necessary and corresponding changes to processes. Data may be improved without addressing how it is used within models or workflows. New methodologies may be introduced without ensuring they are consistently applied.
In these situations, individual components may improve, but overall performance does not.
Misalignment begins to emerge. Enhanced systems still rely on manual processes. Improved data is not fully integrated into existing models. Stronger methodologies prove difficult to operationalise. Capability within teams increases, but opportunities to apply it effectively remain limited.
As a result, improvements in one area can be diluted, or even negated, by limitations in another.
The Impact of Reactive Change
A further challenge is that many initiatives are driven by immediate needs.
Regulatory change, reporting deadlines or business demands often require targeted solutions within tight timeframes. While these responses are necessary, they can lead to a pattern of reactive change.
Solutions are implemented to address specific issues, without fully considering their impact on the wider system.
Over time, this contributes to an increasingly complex environment. Each new initiative adds to the structure of the function, but not always in a coordinated way. Dependencies increase, workarounds become embedded and the overall landscape becomes more difficult to navigate.
The Absence of a Clear Baseline
Another common issue is the absence of a clear baseline.
Without a structured view of current capability, it becomes difficult to determine where the most significant constraints lie, which improvements will have the greatest impact and how progress should be measured over time
This is often reinforced by the absence of a consistent approach to measuring performance.
Progress may be visible within individual areas, but far less clear at the level of the function as a whole. In the absence of this broader view, improvement efforts are often guided by perception, experience or urgency, rather than by a consistent understanding of how the function operates overall.
A Familiar Pattern – and What It Points To
These factors combine to create a familiar pattern.
Change is continuous. Effort is significant. New initiatives are introduced. Existing processes are refined. Additional capability is developed across systems, data and models.
But the resulting improvement in performance is uneven and, in many cases, difficult to sustain.
What this reveals is not a lack of activity, but a lack of coordination.
Addressing this requires a more structured and coordinated approach to improvement. An approach that considers not only what needs to change, but how those changes interact, and how they contribute to performance across the function as a whole.
Closing Thought
Improvement does not stall because of a lack of effort.
In most actuarial functions, activity is ongoing. Initiatives are delivered, capability is developed and change is continuous.
It stalls because that effort is not aligned.
Without a clear view of how different improvements interact, progress remains uneven, and the overall performance of the function is difficult to move forward in a sustained way.
This article forms part of a broader paper on The Missing Link in Actuarial Modernisation, which sets out a structured view of actuarial performance and how different components of the function interact.
