The real issue isn’t capability. It’s how everything fits together.
Where Complexity Comes From
In many organisations, systems are implemented independently of how work is actually performed.
This creates gaps between components, which are filled with manual workarounds.
Processes then adapt to accommodate these limitations. Additional steps are introduced to bridge systems, manage data issues or support model execution. Over time, these adjustments become embedded.
What begins as a workaround gradually becomes standard practice, increasing complexity and reducing efficiency.
The Hidden Cost of Data
Data presents a similar challenge.
Data is often available, but not structured or integrated in a way that supports models, processes or decision-making.
As a result, a significant proportion of actuarial effort is spent extracting, reconciling and transforming data before it can be used.
These activities are frequently embedded within processes, making them difficult to isolate and even harder to improve.
When Capability Increases Complexity
Models add further complexity.
Technically robust models can become difficult to operate, maintain or explain within existing workflows.
As functionality increases, so does operational complexity, placing greater demands on data, processes and the people required to manage them.
Inconsistent Ways of Working
At the same time, ways of working evolve inconsistently.
Teams, methodologies and processes develop in different directions, reducing clarity, increasing variation and limiting overall performance.
Friction Between Components
While individual components may appear to function adequately in isolation, the interaction between them introduces friction.
- Processes compensate for system limitations
- Data requires repeated preparation
- Models become harder to operate within existing workflows
This friction increases effort, extends timelines and reduces the ability of the function to respond effectively to new demands.
A System-Level Perspective
Understanding actuarial performance requires looking beyond individual components and focusing on how they interact.
Many of these challenges are addressed in isolation. But the underlying issue is structural.
A more complete view requires seeing the actuarial function as a connected system, where complexity is shaped not by individual elements, but by how they come together in practice.
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.
