6 February 2020
Paul Harwood, Member of the Risk Management Board, shares his thoughts.
‘Cynic and Idealist: two views of the insurance cycle’ is a 2003 paper recommended to me as worthy of another look. I caught up with the author, actuary Martin White, and asked him whether it still had relevance.
“At its heart, this paper deals with culture, with the motivations of those who invest in and run insurance and investment firms. It suggests that for risk management to be effective, it has to recognise the cyclical nature of markets. Actuaries as risk managers are well placed to do this, and to cut through strategies based on hope rather than a proper understanding of the business dynamics” he said.
This seems to me to summarise nicely the current regulatory position on culture and the role of the risk actuary. Have a read, and see if you agree.