A structured view of actuarial performance
Introduction
By this point, most actuarial leaders recognise that improving performance is not simply a matter of upgrading systems, improving data or enhancing models.
The challenge is rarely identifying opportunities for improvement. The challenge is understanding how those opportunities relate to one another and where effort should be focused to achieve the greatest overall impact.
This is often where improvement becomes difficult. Individual areas of the actuarial function are typically well understood. Teams understand their systems, their models, their data and their processes. What is often less clear is how these different elements collectively shape performance.
Without a structured way of viewing the function, it becomes difficult to distinguish between symptoms and underlying constraints, or to understand how changes in one area affect another.
This requires a different perspective. One that views actuarial performance not through individual initiatives, but through the key factors that collectively enable the function to operate effectively.
A Structured View of Actuarial Performance
While individual areas of the actuarial function are often well understood, there is rarely a consistent way of viewing how they fit together.
Discussions around improvement typically focus on specific initiatives, systems, models, data or processes. These conversations are important, but they can make it difficult to understand how different issues relate to one another or how they collectively influence performance.
As a result, organisations often find themselves addressing symptoms rather than underlying constraints. A process issue may be rooted in system limitations. A modelling challenge may be driven by data constraints. A delivery bottleneck may stem from unclear responsibilities or inconsistent methodologies.
Viewed in isolation, each issue appears separate. In practice, they are often interconnected. Without a structured view of the function, it becomes difficult to answer some fundamental questions:
- Where are the most significant constraints on performance?
- How do different challenges relate to one another?
- Which areas should be prioritised, and in what sequence?
- How will change in one area affect the rest of the function?
These questions require more than an understanding of individual components. They require a consistent way of understanding how performance is created across the actuarial function as a whole.
One practical way of achieving this is to consider the function through a set of core enablers that collectively shape performance.
The Six Enablers of Actuarial Performance
Through our work with actuarial functions, six areas consistently emerge as the primary enablers of performance.
While organisations may use different terminology or structures, the same underlying themes repeatedly influence how effectively the function operates and delivers value.
These six enablers are:
- People – the skills, experience and capacity required to deliver actuarial work effectively.
- Processes – the structure and flow of activities that underpin consistent and timely delivery.
- Methodologies – the approaches, assumptions and techniques used to produce results that are both robust, explainable and appropriate.
- Systems – the tools and platforms that support execution, efficiency and scale.
- Data – the availability, quality and accessibility of information required for analysis, modelling and insight.
- Models – the mechanisms through which actuarial calculations, projections and analysis are performed.
Individually, each of these areas contributes to actuarial performance. Collectively, they provide a structured way of understanding how the actuarial function operates, where constraints exist and how improvement opportunities relate to one another.
Importantly, no single enabler determines performance on its own. The value comes from understanding them together.
Performance Is Created Through Interaction
The value of the six enablers lies not simply in identifying important areas of the actuarial function. It lies in understanding how those areas influence one another.
A model may be technically robust, but its effectiveness depends on the quality of the data that supports it, the systems through which it operates, the methodologies that govern its use and the people responsible for maintaining and interpreting its outputs.
The same principle applies across all six enablers. Challenges rarely sit neatly within a single area. More often, they emerge through the interaction between them.
A process issue may be driven by system limitations. Data challenges may increase reliance on manual workarounds. Inconsistent methodologies may create additional complexity across models and reporting processes.
Viewed individually, these issues can appear unrelated. Viewed collectively, they often reveal the underlying constraints affecting performance.
This perspective provides a more complete understanding of how the actuarial function operates and where improvement efforts are likely to have the greatest impact.
Achieving Balance Across the Function
The objective is not to maximise every enabler independently.
In practice, actuarial performance is rarely constrained by a single area operating in isolation. More often, constraints emerge where capability is uneven, priorities are misaligned or one enabler limits the effectiveness of another.
This is why improving performance requires more than raising the maturity of individual components.
It requires an understanding of where the most significant constraints exist and how different areas of the function contribute to overall performance.
By considering the six enablers collectively, organisations can develop a clearer view of current capability and identify where targeted improvement is likely to have the greatest impact. In some cases, this may involve investing in technology. In others, it may require simplifying processes, improving data accessibility, strengthening methodologies or addressing capability gaps within teams.
The value of this perspective is not that it provides a single answer. It provides a structured way of identifying where effort should be focused and how improvement can be approached in a more coordinated and effective manner.
Rather than viewing performance through a series of disconnected initiatives, organisations gain a clearer understanding of how the actuarial function operates as a whole.
Creating Visibility Over Performance
In many organisations, actuarial performance is assessed indirectly through delivery timelines, model outputs or individual projects. While these provide useful indicators, they do not always offer a clear view of how effectively the actuarial function is operating as a whole.
This is where the six enablers become particularly valuable. Rather than focusing on isolated metrics or individual initiatives, they provide a structured way of understanding the factors that collectively influence performance.
This perspective helps create greater visibility over how the function operates, where constraints exist and how different challenges relate to one another. Importantly, it shifts the conversation away from individual problems and towards overall capability.
The question then shifts from “What should we improve?” to a far more valuable one: “Where are the constraints that are having the greatest impact on performance?”
This subtle shift in perspective can fundamentally change how improvement is approached. Instead of responding to issues as they emerge, organisations are better positioned to understand the function as a whole, prioritise improvement more effectively and focus effort where it will create the greatest value.
From Understanding to Improvement
The six enablers do not provide a solution in themselves. Their value lies in providing a structured way of understanding performance.
By viewing the actuarial function through a consistent set of interconnected enablers, organisations gain greater visibility over how performance is created, where constraints exist and how improvement efforts relate to one another. This changes the conversation.
Rather than asking which individual component should be improved next, actuarial leaders can begin to consider how improvement should be prioritised across the function as a whole.
That shift in perspective is often the first step towards more coordinated, sustainable and effective performance improvement.
This article forms part of MBE Consulting’s “Missing Link in Actuarial Modernisation” series, exploring why improvement efforts stall, and what it takes to achieve meaningful, system-wide performance improvement.
