This post was originally published on 06 June 2017 and updated on 03 March 2020
In my previous post in the Actuarial Transformation series, I looked at the challenges of obtaining buy-in from actuarial teams, made all the more relevant with IFRS 17 implementation projects currently ongoing.
But it doesn’t end with obtaining buy-in. Even when teams are on board, there are other relationships that need to be managed to ensure successful transformation projects. In this week’s post, I talk about the complicated relationship between actuaries and a stakeholder that can act as the gatekeeper to any technological development; the IT team.
It’s complicated: mending the relationship between actuaries and IT for successful transformation
Qualifying as an actuary requires running a gauntlet of some of the toughest exams in the world. The education system covers everything from commutation functions to communication faux pas but fails to prepare students for practical life office work in a crucial way; there is a glaring neglect of IT training.
Any actuarial student starting work will be thrown into the world of coding, runs, databases and shared drive disk space.
But it’s accepted that the IT knowledge required to operate often complex and resource-intensive models is something that can be picked up “on the job”.
And the distant, often strained, relationship between actuarial and IT departments leads to actuaries working relatively autonomously with limited IT support; bolting on tactical solutions – which may not be the most efficient or sustainable approach – as they see fit.
This might have worked in the past, when regulatory and reporting requirements in the industry were more stable and simpler and did not require as much specialised software, data management and reporting capabilities or computing power. The last decade, however, has seen a surge of complex products and new reporting standards and regulatory requirements.
Actuaries need support, but also need to embrace change
Actuaries feel that they can (or must) solve problems faster and more efficiently without IT support. But years of bad habits and lack of investment in actuarial IT infrastructure and relationships have resulted in a build-up of teetering solutions that are difficult to support and prone to deficiencies and errors.
It seems that actuarial transformation projects, of which the upgrade of IT systems and relationships is almost always a large part, may well be subject to failure until more investment is made into the relationship between actuaries and IT, or until actuaries formally become IT specialists themselves.
If you have ideas about, or experience in IT relationship management, or would like to talk about systems and IT options for an upcoming transformation project, please get in touch with me at [email protected].
