Why structured assessment is critical to sustained actuarial performance improvement
Introduction
Throughout this series, we have explored why actuarial modernisation so often falls short of expectations. We have seen that the challenge is rarely a lack of investment, capability or technical expertise. More often, it stems from the way improvement is approached.
Actuarial performance is shaped by the interaction of people, processes, methodologies, systems, data and models. Improving any one of these areas can deliver meaningful benefits, but lasting improvement depends on understanding how they work together across the function as a whole. This raises an important question.
If actuarial performance is created through the interaction of multiple interconnected enablers, how do organisations determine where improvement should begin?
For many actuarial leaders, this is where modernisation becomes most difficult. Not because they lack ideas for improvement, but because they lack a structured way of understanding where the greatest constraints exist, how different challenges relate to one another and which initiatives will have the greatest overall impact.
This is the missing discipline.
From Understanding to Action
Understanding why performance is constrained is only part of the challenge. The more difficult task is deciding where improvement should begin. For many actuarial leaders, this is where modernisation becomes most difficult.
- Where should we start?
- Which areas require the most attention?
- How do we prioritise competing initiatives?
- How do we ensure that improvements are coordinated rather than fragmented?
These are not straightforward questions. The complexity of the actuarial environment, combined with ongoing business, regulatory and operational demands, makes it difficult to step back and assess the function in a structured and objective way.
As a result, improvement efforts are often guided by immediate priorities, localised needs or the most visible opportunities for change. While this can be effective in addressing individual issues, it does not always provide a clear path towards sustained, system-wide performance improvement.
Moving from understanding to action requires something more.
It requires a structured way of creating visibility over the actuarial function, identifying where the greatest constraints exist and prioritising improvement in a way that strengthens the performance of the function as a whole.
Why Structured Assessment Matters
Effective improvement begins with understanding the current state of the actuarial function. Not simply within individual areas, but across the function as a whole. This means developing a clear view of where strengths exist, where constraints are limiting performance and how different issues relate to one another.
Without this visibility, improvement initiatives are often based on assumptions rather than evidence. Different parts of the function may be evaluated using different criteria, making it difficult to compare capabilities, establish priorities or measure progress over time.
A structured assessment addresses this by providing a consistent way of understanding performance across the actuarial function. Rather than focusing on individual initiatives or isolated issues, it creates a broader view of how the key enablers operate together and where improvement is likely to have the greatest overall impact.
This enables actuarial leaders to:
- identify the constraints that have the greatest influence on overall performance.
- understand how issues in one area affect capability elsewhere.
- prioritise improvement initiatives more effectively.
- develop a clearer and more coordinated roadmap for change.
Most importantly, it shifts improvement from being reactive to becoming deliberate. Rather than responding to the most visible problems, organisations are able to focus on the areas that will create the greatest long-term improvement in actuarial performance.
The Missing Discipline
Over the past decade, actuarial modernisation has rightly focused on strengthening specific areas of the function. Organisations have invested in new systems, improved data, enhanced modelling capability and increased automation. These investments remain essential and continue to play a critical role in the evolution of the actuarial function.
However, sustainable performance improvement depends on something more. It requires a disciplined way of understanding how the function operates as a whole. Without that discipline, improvement initiatives are often prioritised independently, progress is measured inconsistently and underlying constraints can remain hidden despite significant investment.
This is not a question of effort. Nor is it a question of technical capability.
It is about creating sufficient visibility to understand where performance is being constrained, how different issues relate to one another and where improvement will have the greatest overall impact.
That is the missing discipline.
Not another transformation programme. Not another technology investment. But a structured way of understanding the actuarial function before deciding how it should evolve.
A Practical Way Forward
These principles underpin MBE Consulting’s Actuarial Performance Management (APM™) Framework.
The framework was developed in response to a challenge we have observed repeatedly across actuarial functions.
While organisations invest significantly in modernisation, there is often no consistent way of understanding current capability, identifying where the greatest constraints exist or prioritising improvement across the function as a whole.
The APM™ Framework addresses this by providing a structured approach to assessing actuarial performance across six interconnected enablers: People, Processes, Methodologies, Systems, Data and Models.
Rather than evaluating these areas independently, it considers how they interact, where misalignment is creating operational friction and which constraints are having the greatest impact on overall performance.
This provides actuarial leaders with a consistent way to:
- understand current capability across the function.
- identify the constraints that have the greatest impact on performance.
- prioritise improvement initiatives based on overall value.
- develop a coordinated roadmap for sustainable change.
Ultimately, the value of the APM™ Framework lies not in the assessment itself, but in the visibility and clarity it provides.
By establishing a common understanding of how the function operates, organisations are better able to align stakeholders, make better informed investment decisions and focus improvement where it will have the greatest long-term impact.
Structured assessment is not the end of the modernisation journey. It is the foundation on which more effective actuarial transformation can be built.
This concludes our “Missing Link in Actuarial Modernisation” series.
Over the past eight articles, we’ve explored why actuarial transformation often falls short, what distinguishes high-performing functions and why structured assessment is the missing discipline.
If you’d like to understand how these principles apply to your own actuarial function, we’d love to continue the conversation.
