Actuarial science, the science of
applying mathematics, statistics, and other financial thoughts to evaluate and
assess risk, is relatively new to the world. This is mostly because the work
actuaries are involved in apply to many things that have only recently been
developed within the past few centuries. Although its specific application to
our day only dates back to the 19th century, there are many instances
where those in both recent and distant past have used different mathematical
ideas or “models”, per say, to evaluate decisions and help give reason to
important decisions.
Distant Past
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| A depiction of Thales |
The Greeks are often most
associated with the formation and systemization of mathematics as a whole.
Thales might be someone who you can compare to being an actuary in his day. Thales
is credited with being one of the first to use deductive reasoning with respect
to mathematical practices. This is the heart of actuarial thought, using mathematical
and statistical methods to make real world decisions and analyses. The idea of
using mathematics to help make real world “non-math” decisions, versus (for
example) just how to best construct a good building, continued to grow
throughout the middle ages, renaissance, and into the 17th century. In
1762 a London man, James Dodson, made the first steps in the direction of
modern day actuarial analysis. His work for the society Equitable Life is the
corner stone of the current actuarial industry. James Dodson was among the very
first to use science (math and statistics) to determine premium rates and
long-term policies for insurance.
Recent Past
My
actuarial mentor, Justin Owens, who I met on my LDS mission in Seattle Washington
has been around the block in the actuarial field. In talking with Justin for a
good half hour I was able to learn a lot about the recent history of the field
as well as the near future. Many actuaries are portrayed or stereotyped as
being math obsessed, socially inept people. This has always been one of my
worries about the profession as I feel this doesn't really describe me. Justin
helped to put my worries to rest by explaining that the traditional actuaries
of the recent past tend to fit that description better than what the modern day
actuary has become. Instead of simply crunching the numbers and figuring out
how much something should cost, many actuaries today are business consultants,
talking daily with clients and having to be professional in daily business interactions
with others. Justin explained that not only are the applications of the science
growing with increases in data and technology, but that the actuary as a person
is having to become a much more well-rounded business professional than in the
recent past.
Sources:
Interview with Justin Owens - Asset
Allocation Strategist at Russell Investments – 12/3/2014
Choike, J. (1980). The Pentagram and the Discovery of an Irrational Number. Two-Year College Mathematics Journal, 11(5), 110-315. Retrieved December 2, 2014.
Thanks for clarifying on the difference between the recent past stereotype of an actuary and the modern actuary. Do you know why the actuary field has changed to become more well-rounded recently? What exactly to modern actuaries do that makes them more well-rounded?
ReplyDeleteWith the growing technology and the "big data", as the world is calling it, which is being produced more and more each day by everyday people, there are more and more applications for which actuaries are needed. These are often large businesses, which has created a large world of consulting for actuaries. These actuaries work basically as a business consultant instead of a number cruncher. (Although they would have had to be behind the numbers previously to get to become a consultant.)
ReplyDeleteYour argument on stereotypes was very interesting. It is true that being well-rounded and multifaceted does disintegrate the old stereotype. I wonder, however, how long before we have a new stereotype (not just for your field but any field) and what it will be? In the next post we "profile our audience" and I just wonder how the profiling will change in the next 50 years. I think to my own field, and being relatively new, there isn't really a physical stereotype that you can see established among those who work as speech pathologists yet (at least not that I know of). So I think that it is cool how the progression in your field is an image change as well as an internal change.
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