Showing posts with label humor. Show all posts
Showing posts with label humor. Show all posts

Jun 13, 2015

Professional Empathy of an Actuary

The most important hard skill in any profession is a soft skill called Empathy.
Without empathy, any project or business goal is doomed to fail.

Just a small humorous illustration to get the picture....

Adding Rabbits

One day, the math teacher asks six year old Johnny, "If you have 200 rabbits and you add another 100 rabbits, how many rabbits would you have?"

Johnny thinks for a moment and then answers: "I think the answer is 337 Sir".

"No, Johnny. That's the wrong answer. Try again.

Johnny takes another five seconds and answers: "Still probably 337 Sir" "

Now the math teacher slightly loses his temper and baffles: "No Johnny, wrong again. You know nothing about mathematics!".

Immediately Johnny answers: "And you know nothing about rabbits Sir"

Actuarial Skills
A recent (May 2015) Investopedia article sums up the five skills every actuary needs
  1. Analytical Problem Solving Skills 
  2. Math and Numeracy Skills 
  3. Computer Skills 
  4. Knowledge of Business and Finance 
  5. Communication and Interpersonal Skills
Although in a classical sense this powerful summary of an actuary's professional competences is perfectly in line wit more detailed descriptions as given by several actuarial associations, something essential is missing.

To be successful as an an actuary you'll need to develop what is called

Professional Empathy

What is Professional Empathy?
Professional empathy is the ability to see the world through the eyes of other professionals.

As actuaries we're trained to view and resolve our projects, challenges and issues in a primarily quantitative manner with the help of actuarial techniques, models and formulas.

Through study and experience we can develop "Professional Empathy" that allows us to look through the eyes of other professionals or clients and feel and understand what their view and perceptions are.
In doing so, we're able to optimize our advice, support or project performance.

Understanding and response
Professional empathy implies two elements: understanding and response.

To understand other professionals and clients, we need to develop the ability to be sensitive to the needs and feelings of others. To do so, it helps to develop technical skills in other professional fields, read other than just actuarial literature and join other than pure actuarial conferences.

As graduated actuaries we already developed a broad multi-professional basis that includes professional areas as: mathematics, statistics, finance, insurance, asset management, pricing, administration, business analytics, ict, organization, marketing, etc. Therefore, if we continue to develop this multi-professional ability, we - as actuaries - are are ideally suited to organize combined professional expertise (innovation) projects.

Besides the traditional actuarial areas as insurance, pensions, statistics, and actuarial techniques we'll have to focus and develop skills in the surrounding areas of the actuarial work field:

In order to understand we need to develop the ability to read verbal, paralinguistic and non verbal cues of professionals in other professional fields.

Secondly, our response and attitude to other professional should be in such a way that other professionals recognize that we understand them, appreciate that we speak their (professional) language and invite us to share their professional issues or doubts with us.

Interpersonal communication skills 
This way of responding requires to bring out a professional attitude that's based on interpersonal communication skills like:
  1. showing interest, respect and appreciation
  2. active listening
  3. showing understanding, being accessible, 
  4. having a flexible attitude 
  5. operate steady on basis of ethical principals.

Intrapersonal skills
It also forces us actuaries to continuously work on our intrapersonal skills like: 
  1. Knowing what drives, angers, motivates, frustrates, inspires you
  2. Knowing your own strengths and limitations
  3. The ability to stay calm and balanced in stressful situations
  4. Self confidence

How to start with Professional Empathy?
You can start with developing your professional Empathy as follows:
  1. simply pick out one of the communication issues as mentioned above (e.g. 'active listening')
  2. After a conversation with a trusted professional you work with, simply ask for honest feedback by asking for example: "I try to develop a more active listening style. May I ask you: Do you think I really listened to your arguments. If so, in what way? If not, 'why' and 'when' not? What would you have expected of me?

If it seems difficult for you to ask these questions, congratulations! You now know for sure this approach is applicable to you.

If you think it makes no sense to ask these questions once in a while. Just keep doing what you always did until the final reality check!

SOA Self Assessment
The Society of Actuaries has developed a Competency Framework Self-Assessment Tool. The self-assessment asks you to rate a series of statements about the skills that actuaries should have to be valued for their professionalism, technical expertise and business acumen.

It's a 45 minute test that gives first impression of you improvement areas. However, interpersonal en intrapersonal skills are only limited measured.........

Aug 24, 2012

Humor: Penguin Risk Management

Life ain't easy ... sometimes.... Especially not... when you're a risk manager....

Changing Professional Field of Risk
In order to make any kind of progress in our human - penguin like - society, we'll have to take risk...

Part of a risk manager's task is to check regularly whether parties, (e.g.  asset managers)  are acting in line with the defined risk mandates (compliance). 

It's more or less generally accepted that a risk manager's first task is to prevent, control and optimize risks from a mainly defensive point of view.

we live in a 'risk growing world' where (state) regulators and accounting standard boards increasingly prescribe all kind of risk controlling measures.

In this world it becomes more and more important that a risk manager also advices actively on where and when to take more risk, instead of less risk.

Zero Risk Attitude: Death by Risk Management

Taking less and less risk gradually leads to a zero risk position.

An (on top of)  'zero risk attitude' of a risk manager can therefore become the nail in the coffin of any financial company. As without risk there's no profit, and without profit any financial company is doomed.

So skip any form of 'scary risk management', face risk as it is and changes in time. Moreover, develop and demand a positive, realistic and dynamic risk view of yourself and your professional environment.

Risk, Part of Evolution
History shows that taking major risks is essential in successful exploring new areas.

A few examples:
  • Discovering America
    The (re)discovering of America by Columbus took a lot of lives. Shipwrecks, bad weather, diseases and fights took its toll.
  • Radioactivity
    Discovering the properties and applications of radioactivity took many lives. Example : Marrie Curie died as a result of prolonged exposure to radiation.
  • Exploring Space
    Many astronauts died on the the Gemini, Apollo an shuttle projects About 5% of the astronauts that have been launched, have died.

Future Risk Space Programs: Dream Chasing
At the start of the Shuttle program, NASA managers thought (calculated?) there was only a '1-in-100,000' chance of losing a shuttle and its crew.
Today, engineers believe this probability was in fact closer to 1 in 100. 
NASA’s basic requirement for new commercial crew vehicles is a probability of 1 in 1000 (!).

On basis of these modern risk standards, the original Apollo project back in 1961 would not even have started.

Looking at our 'Exploring Space' ambitions, it's likely that due to higher risk standards, cost of new space programs will increase to a level where no profitable exploitation (at all) is possible.

In other words: Profitable exploitation of future crewed flights to other planets will turn out to be a real 'Dream Chaser'.

Let's be fair, after 1972 we've never been back to the moon. Yet, plans to go to Mars are presented as 'business as usual'....

At the same time risk standards increase and costs explode.
Forget about going to Mars at current risk standards!

Financial Risk Equivalent
Just like in the space industry, risk standards in the financial industry have increased. From old demands, like the 2.5% one year default rate (97.5% confidence level)  of Dutch pension funds to the 1.0% - 0.5% default rate in the insurance and 0.1% - 0.05% in the banking industry.

In general, raising default risk standards by lowering default levels is a dead end street. It's much more effective to tackle other risk topics like controlling 'systemic risk' and 'company size' and accept risk as a fact of life.

Penguin Behavior
Perhaps - regarding risk and size - we can learn from penguin behavior. Although king penguins are highly gregarious at rookery sites, they usually travel in small groups of 5 to 20 individuals.

Just like we humans, penguins have to take risk in order to survive. In our research for risk we have to accept risk, and therefore loss, as a necessary unavoidable part of (financial) life.
Let's learn from penguin Risk management.....


Let's wrap up with penguin wisdom:
To survive as society on the long term, we need to create smal(ler) companies with a limited exposure to systemic risk and a higher risk attitude.

Risk is a part of life, explore but don't kill it, as it will kill you...

Links & Used Sources:
- Apollo by numbers
- Percentage of fatal space flights
- Analysis: NASA underestimated shuttle dangers 
- Certified Safe (2011)
- Dream Chaser
- POLE Penguins Comic Strip

Mars?  Perhaps in 2525?

Feb 12, 2012

What became of my Pension Plan...

It's sad but a bitter reality, pension cuts are on their way....

We have to admit.., our once so ambitious pension plans got shattered.

What's left is the cartoonized view of an average pension member:

Dutch Perspective
For Dutch pension members and pensioners the situation has become (extra) paradoxical.

Top consulting firms like Mercer and Towers Watson (regularly) rank The Netherlands as one of the best pension countries ever.....

These announcements only bring little consolation......

On top of the Dutch State Treasury Agency illustrates the relative 'strong outlook' of the Netherlands in European perspective.

All this looks quite hopeful, but does it generate the necessary trust?

New Risk Management Definition
What comes to mind is: was our our pension plan based on hope or calculations we can trust? Is our (Dutch) country recovering plan based on underpinned facts and actions or is it 'pink cloud thinking'.....?

Hmmmmm...., all these reflections lead to a kind of new mathematical definition of Risk Management:

Risk Management = Trust - Hope

In other words, Risk Management is managing the difference between Hope and Trust......

Faith alone seems not enough.....

What's next?

Key question is in all this pension fuzz is of course: How could this happen?

More technical details in my next blog on Actuary-Info :

Pension Cuts, Why? 

Mean time, keep breathing, you're living a longer live......

Sources/Related Links:
- Dutch State Treasury Agency (2012)
- Global Pension Assets Study 2012

- The Melbourne Mercer Global Pension Index (2011)
- List of Top Consulting Firms 
- Is Faith Enough? 

Nov 25, 2011

Humor: Past Performance is...

To protect (!) the customer more and more, investment funds feel the need  - or are obligated - to communicate about the expectation of their funds' future return.

One of the most used non- or disinformation statements funds use, is the line:

Past performance is no guarantee of future results

A general lesson is that all prefab communication lines and static communication tools are doomed tot fail, as communication is context and time dependent.

Just as Communication, your Actuarial, Investment or Financial Models are also context (economic, fiscal, ethics) and time dependent.

Change them upfront, as 'performance of yesterday's models is no guarantee for the future.....'  ;-)

- Free Flash Animations - Smilies by Adrian Wilman

- Disinformation: Everything You Know Is Wrong

Jul 6, 2011

Humor: Actuarial Mind

In July 2011 holidays  - instead of blogs - are ahead...

Just chew this month on the next actuary no-brainer:

The smartest actuary in the world
The Pope, a well seasoned actuary and a student nurse are flying on an airplane. The captain comes back and says that he has some bad news and some really bad news. The bad news is that the plane is going to crash! As he puts on a parachute and jumps out he says that the really bad news is that there are only 2 more parachutes.

The actuary says: “I am the smartest man in the world. I've just calculated my life expectancy to be more than fifteen years. Excuse me...” With that he puts on a parachute and jumps out.

The Pope says: “Well, my child, I would love to live, but I believe that my time is up. Please take the other parachute and save yourself.”

The student nurse says: “Not to worry Holy Father. Right now the smartest man in the world is trying to find the rip-cord on my back pack!”

Jun 13, 2011

Actuary Garfield

There's not a lot of 'Actuary Humor' on the Internet. Here's one...

Actuary Garfield explains how actuaries think...

Great and lots of humor, those Garfield cartoon strips, (especially those about actuaries....).

Original Sources:
- Garfield Snow
- Garfield Snowman

May 1, 2011

Humor: Scrambled Actuarial Reporting

Some actuaries are convinced that adding more important details really helps. With more details and more information you are able to explain you models better and as we all know: better communication is key in actuarial science.

Here is an example of detailed information (click on the image!)

Some(times) details don't matter
Unfortunately more information and more details generally disturb efficient decision making. The next text shows that some details don't really matter.

Smoe acaruites are covcnined taht adding mroe imnrpotat deaitls rlaely hleps. Wtih more dleitas you are albe to eplaxin you mlodes bteter and as we all konw: btteer cmniutcoiaomn is key in aratiuacl sieccne.

Sirnpigrulsy tihs is not ture. Tihs txet sowhs taht smoe daeilts dno't rlaley mttear.

The arutacial aidnceue isn't rlaley istretneed in the daeilts, but in caelr ipunt (fsrit ltteer of a wrod) and oumotces (last letetr of a word). The dtilaes (letetrs) in bweteen can be mexid up in evrey rodnam oerdr you lkie. Keep in mnid tihs iponmatrt lsosen in your nxet peeiatntsorn.

According to a study at Cambridge University, to read and understand a text well, it doesn't matter in what order the letters in a word are placed. The only condition is that the first and last letter of each word remain the same. The rest can be a total mess up. This is because the human mind does not read every letter by itself but the word as a whole.

Let's conclude with an 'example text' for the opening-slide of you next board presentation:

Daer Board mrebmes,

Agtlhouh we hvae to tkae fetdanmaunl dniecioss tdoay, it wlil not be ncseresay to udasnertnd or dcssius all knid of tcihcenal dtileas.

The relust of my avicde is pertseend in scuh a way as to esurne taht we can stcik to the mian ptinos and hneieadls.

The vrey fcat that you wree albe
to raed and udnreastnd tihs txet,
greauetans taht we wlil hvae a
sefscuucsl mtineeg.

Yuor aivdosr

Scramble your own opening-slide text for your next presentation at:

No doubt, your next report will be actuarial scrambled.... ;-)

Related sources and links
- Words Scrambler
- MRC Cognition and Brain Sciences Unit
- All My Faves

Apr 11, 2011

Fun: Actuarial Dasboard Crash

Last week I gave a Risk Management training about pension funds. After illustrating several times the importance of adequate risk management dashboards, one of the attendees suddenly stated:

'No matter how impressive your dashboard, you should keep your eyes on the road!'........

Right he was! A driver  who's constantly focused on his dashboard will sooner or later end up in the bush and finally crash.

We, actuaries and risk managers all trust on our dashboards, but at the same time we should keep our eyes open to anticipate on coming events in a changing marketplace.

Sometimes it's even better to just leave the road, as the next video shows...

Police Risk management

David | Myspace Video

Anyhow, keep your eyes open, to prevent an Actuarial Dashboard Crash.....

Related Links:
- Alfa Romeo Spider Veloce: Don’t Let Dashboards Drive You Crazy

Oct 18, 2010

Voltaire: Diplomats, Ladies and Actuaries..

Actuaries understand the difference between 'being sure' and telling it....
Some of us are Diplomat, Lady and Actuary in One.... what a dazzling combination...

Diplomats, Ladies and Actuaries
When a diplomat says yes, he means ‘perhaps’;

When he says perhaps, he means ‘no’;
When he says no, he is not a diplomat.

When a lady says no, she means ‘perhaps’;
When she says perhaps, she means ‘yes’;
When she says yes, she is not a lady.
- Voltaire 1694-1778 quoted in Escandell 1993 -

When an actuary says yes, (s)he means 'probably'
When (s)he says probably, (s)he means 'sure'
When (s)he says 'sure', (s)he is not an actuary.
- Joshua Maggid Actuary Info 2010 -

Oct 3, 2010

Pension Fund Humor: Ask an Actuary!

The art of Pension Fund management....

original picture source

Investment Strategy: The Price of Doubt

Most actuaries have seen it happen: A perfect designed investment strategy......., turning into a real nightmare. How could it come that far? What happened?

Life of an actuary...
Let's dive into a real life simplified actuarial case....:

As the actuary of your company, you've developed a perfect ALM study. Together with the head of the investment department, you've been able to convince your Board of the new developed 'Investment Strategy'. A consequent mix of 50% Bonds and 50% stocks, resulting in an average expected 6% return on the long term, turned out to be the best (optimal) investment mix given the risk appetite of your Board and the regulatory demands. All things are set for execution.

Now let's see how your strategic plan would develop (scenario I) and how it would probably be executed by the Board (scenario II) over the next ten years.

Although your investment strategy plan was designed on a rational basis and the execution of this plan was also intended to be a rational process, in practice they are not.....

Let's follow the discussion in the Board from year to year...

Year 1
The company's average portfolio return performs according plan (6%). Stocks: 8%, Bonds 4%, on average 6%. The Board concludes they have the right strategy. You, as an actuary, agree.

Year 2
Compliments from the Board. Stocks perform even higher (10%), leading to a 7% average return.
You sleep well that night.

Year 3
Another fabulous Stock performance year. A stock return of 20%, leading to an average return of 12%! Some Board members start to doubt and question your ALM-model. They are arguing that if stock prices are that high three years in a row, they would like to profit more from this development. They suggest to adjust the asset mix in favor of stocks. Your ALM model should me more flexible.

You are defending your Asset Liability Model to the grave, but after extensive discussions all board members agree that a slight 'temporary' adjustment to 70% stocks and 30% bonds would be 'worth the risk' to profit from this high stock return. With great reluctance, you agree....

Year 4
Although the performance of stocks is not as high as the year before, it's still relatively high (15%) and leads to an average return of 11.7%, which is 2.2% (!) higher than the 9.5% return that would have been achieved with a 50/50% mix.  The Board concludes that it took the right decision last year, to adjust the asset mix to 70/30%.

You - as the responsible actuary - warn again, but the facts are against you. Disappointed and misunderstood you return to your office as the President of the Board tries to cheer you up by thanking you for your 'constructive response' in the board meeting. You abstain from joining the festive Board Party that evening.

Year 5
Stocks are dramatically down to 0%, leading to an average mixed return of 1.2% this year.
The board meeting this year is chaotic. Some members support you as the 'responsible actuary' to readjust the asset mix to the original mix of 50/50%. Others argue that this stock dip is only temporary and that this year's average return is only 0.8% lower than would have been achieved with a 50/50% mix. On top of, most members strain that this year's 0.8% negative return is still lower than the 2.2% positive difference of last year. After two stressful board meetings, the Board decides to stick to their 70/30% investment mix.
The board president's eye fails to meet you, as you leave the board room that night.

Year 6
What was most feared, has become true.. A negative stock return of 10%, leading to an average return of -5.8% ....   When you walk into the board room that night, all eyes are on you as the 'responsible actuary'. You hold your breath, just like all other board members. After a short moment of silence the board president states that he proposes to bring back the asset mix to the original 50/50% mix. Without further discussion this proposal is accepted. There's no board party this year.

Year 7
Negative stock returns have increased to 15%, leading to an average return of -5.5% this year.
Some Board members fear that if stock prices will be down for another few years, the average 'needed' return of 6% will not be met. They doubt the current strategy.

Also the Regulator and some Rating Agencies insist on higher confidence and solvency levels with corresponding measures to be taken. Both are not positive and doubt the outlook on stock returns on the long term...

After a long meeting that night, the Board chooses for reasons of 'savety' (!) to adjust the asset mix to 30/70% in favor of the still 4% stable performing Bonds (Better something than nothing (!) ).

Again... you explain that night, that changing the asset mix following actual market performance, is the worst thing a company can do....  But again, you lose the debate.

The power of emotion is greater than the power of rationality. Now not only the Board seems against you, but the Regulator as well. Who wants to fight that! After all, 'ethical' rule number one is 'complying with the Regulator'. That evening you brainwash yourself and reprogram your attitude to 'actuarial follower' instead of 'actuarial leader'.

After two Johnnie Walkers you see the future bright again and seem ready for the new year.

Year 8
To everybody's surprise stocks performed extremely well at 25% this year. As a result the average return reaches a satisfying performance of 10.3%. With 'mixed feelings' board members take notice of the results. What nobody dears to say and everybody seems to think is: 'Had we stuck to our 70/30% asset mix, the performance would have been: 18.7% (!)......'

The Board President cautiously concludes that the Board took the right decision last year, leading to a proud 10.3% return this year. Compliments to everyone, including the actuary! Supported by your 'converted' mind, the 30/70% asset mix is continued. That evening you accept the invitation to the board party. Lots of Johnnie Walkers help you that night to cope with the decisions taken.

Year 9
Stocks perform at 20%, leading to an 8.8% average mixed return. No Board member dears to raise questions about the possibility of readjusting the asset mix to a 'more risky' (what's that?) one. After all, the overall performance is still higher than the needed 6%. So who may complain or doubt the new 'On the Fly Strategy'? Who cares or who dears? You go to bed early that night.

Year 10
Stocks returns have come down to a more 'realistic' level of 7%. As a consequence the average return is down to 4.9%, way down beneath the critical level of 6%. Board members have to strike a balance. Some of them doubt again. Continuing the 30/70% asset mix will not bring them the needed long term 6% objective return. Adjusting to a 50/50% mix probably will, but is more risky. What to do?

All eyes are on you as the 'final advising actuary'. With restrained pride you state: "Dear colleagues, what about our good friend, the original '50/50% asset mix'. Can we confirm on that?" Without anyone answering, the President takes a look around.... His gavel hits the table and the decision seems to have been taken.

That night you decide to change Johnnie Walker for a well deserved glass of 'actuarial wine': a simple  'Mouton Rothschild 1945' (at the expense of the Board of course). You enjoy the moment and the pleasure of being an actuary. Even after the Rothschild you realize that the decade price of doubt was high: 0.9% p.a. ...

When you go to bed for a good night sleep, you smile...., as some little voice in your head tells you that next year this madness decade-cycle will probably start again...

Aug 10, 2010

Humor: Actuarial Advice Route

Actuaries have a great job. Giving actuarial advice has become 'boardroom art'.

Although actuarial device differs as much as actuaries differ, the route of actuarial advice is - not surprisingly - mostly the same....

Keep enjoying your job as an actuary!

Apr 5, 2010

Actuarial Risk Management Humor

During the pause of a Risk Management conference, a professional risk manager, an accountant and an actuary were in the gents room standing at the urinals. The risk manager, who finished first, walked over to the sink to wash his hands. He then proceeded to dry his hands very carefully. He used paper towel after paper towel to ensure that every single spot of water on his hands was dried. Turning to the accountant and actuary, he said, "We risk managers are trained to be extremely thorough to prevent any risk at all."

Then the accountant finished his task at the urinal and proceeded to wash his hands. He used a 'single paper towel' and made sure that he dried his hands using every available portion of the paper towel. He turned and said, "We accountants are not only trained to be extremely thorough in preventing risk, but we are also trained to be extremely efficient in managing and controlling risk as well."

Finally the actuary finished and walked straight for the door, shouting over his shoulder, "We actuaries, we never get our hands dirty"

- If people think other people are watching them, then they are more likely to wash hands

Jan 4, 2010

Risk Management Humor

Happy new year! At the start of 2010 let's have some 'serious fun' with the next

Actuarial Risk Management Puzzle Joke

Three actuaries and three accountants are traveling by train to visit a 'Risk Management Conference'. At the station, the three accountants each buy tickets and watch as the three actuaries buy only a single ticket.

"This looks very risky. How are three people going to travel on only one ticket?", one of the accountants asks.

"Watch and you'll see! Take notice of our brand new risk management approach", one of the actuaries answers.

They all board the train. The accountants take their respective first class seats, but all three actuaries cram into a restroom and close the door behind them.

Shortly after the train has departed, the conductor comes around collecting tickets. He knocks on the restroom door and says, "Ticket, please." The door opens just a crack and a single arm emerges with a ticket in hand. The conductor takes it and moves on.

The accountants were deeply impressed by the actuarial approach and agreed it was - after all - quite a clever idea without any substantial risk.

So, completely confident and with even more Risk Management skills gained at the inspiring Conference, the accountants decide to copy the actuaries new risk approach on the return trip and save some money (accountants have always been clever with money!). When they get to the station they buy a single ticket for the return trip.

To their astonishment, this time the actuaries don't buy a ticket at all. "This is reckless, how are you going to travel without a single ticket?", one of the perplexed accountants asked. "Watch and you'll see! Take full notice of our latest risk management approach" answered an actuary.

When they board the train the three accountants cram into a restroom and the three actuaries cram into another one nearby. The train departs.

Here the story stops for a moment. Let's find out if you qualify as a Actuary Risk Manager (ARM) or - otherwise - could better have become an accountant.

Can you finish the story? What was the alternative Risk management Plan of the actuaries?

Just check the next box (or go to the original Actuary-Info Blog site) to find the right answer.......


What conclusions can we draw from this simple story?

  • Risk Management is a game without end

  • The effect of Risk Management Conferences is threefold:
    1. Some attendants get smarter
    2. Others get overconfident
    3. Final result: Increasing Risk, instead of decreasing Risk

  • There's an old Dutch saying that expresses the danger of increased Risk Management :

    "A warned man counts for two"

  • If we want to reap the fruits of Risk Management, accountants and actuaries have to start working together, instead of struggling and competing each other.

  • Risk Manager Profile and qualifications
    Insight, creativity and integrity are important requirements to become a professional Risk Manager. Unfortunately, this is not enough.

    To tackle Risk Management in a company, you need the best potential crook around. One who's willing to settle his salary and earnings for a little less than he would have earned as a real crook, in return for having a respectable job and not risking to end up in jail. You could call it the Personal Risk management of the Risk manager. Employers that settle for an inferior Risk Manager, know one thing for sure: someday somebody more 'crooky' than 'your risk manager' will tear your company down!

With some humor, we've gained new insights in the challenging world of Risk Management. Anyway, a Happy & Healthy 2010 !

Dec 8, 2009

Out of the Box Actuary

So you're one of those rare actuaries who thinks he really can think outside of the box?

Well, this is your lucky day. Out of the dark chambers of Actuarial Science, professors developed a brand new test for financial experts like actuaries, to find out if you qualify for the new title

Actuarial Master
Out of the Box Thinking

Most remarkable is that this test consists of only one simple question.

If you manage to give the right answer to this question within 10 seconds you'll qualify for the title. If it takes up to one minute, you'll qualify for your bachelor's degree. If it takes longer, don't be ashamed, just stay "Qualified Actuary".

However, if you don't succeed at all, simply change your title to Actuweary...., nobody will notice ;-).

In case you need help to find the right answer, you are allowed to use this tip.

Now, I will no longer keep you in suspense, here is the key question:

Just click the picture, to find out the right answer!

If you unexpected failed to come up with the right answer, please read the next fabulous blog to escape your expert view:

Nov 27, 2009

Invest or laugh

Every crisis generates his own new quotes. Currently, investment quotes are the top.

Perhaps two of the best investment quotes ever are from AIG Vice Chairman Jacob Frenkel:

"The left side of the balance sheet has nothing right and the right side of the balance sheet has nothing left. But they are equal to each other. So accounting-wise we are fine."


"Credit markets do not function. Why not, because the word credit comes from credibility"

But there's more... A nice summary of investment ROFL quotes can be find on Ian Thomson's blog Investor Jokes.

As actuaries, let's profit from Ian's latest insights and gain some extra education points by studying the next new investment definitions:

  • A long term investment: Short term investment that failed.
  • Momentum Investing: The fine art of buying high and selling low.
  • Value Investing: The art of buying low and selling lower

Probably investors and actuaries will have a hard time understanding each other, as the difference between them is in the 'tail' .....

Also large-cap fund managers have a hard time these days. No wonder everybody starts looking for a small-cap fund manager....
But how do you find one? Ians' answer is simple: Find a good large-cap fund manager, and wait...

Anyhow, keep up your good mood and laughs, as more investment 'animals' will show up next months.....

Let's conclude this blog with an old actuarial warning:

"Where there's smoke, someone gets fired"

P.S. For some more 'serious' investment quotes take a look at 52 Must Read quotes from the legendary Investor Warren Buffett. I'll quote some of the best here:
  • I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.
  • If past history was all there was to the game, the richest people would be librarians (actuaries?).
  • It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.
  • It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours and you’ll drift in that direction.
  • It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.
  • Price is what you pay. Value is what you get.
  • Risk comes from not knowing what you’re doing.
  • Risk is a part of God’s game, alike for men and nations.

How can actuaries profit from Buffett's quotes?

- Greekshares Jokes
- Ian's Investor Jokes
- Warren Buffett: 52 Must Read quotes

Oct 13, 2009

Humor: Actuary Solves Credit Crisis

One upon a time there was a small village depending on only one source of income, tourism... the only problem was - due to the 'crisis' - there were no tourists left...

Every villager had to borrow from an other in order to survive.. several months passed .. everyone felt miserable.

One day a cost conscious actuary, visiting a Risk Conference nearby, arrived in the village.

Heading for a cheap overnight stay, he booked a small room in the only available local hotel. He paid in advance with a 100 dollar note and went to his room to prepare for the conference.

Before the actuary could unpack his bags, the hotel owner had already taken the 100 dollar note, heading his way to pay the butcher.. to whom he owed precisely 100 dollar.

The butcher, in his turn, immediately ran off with the 100 dollar to see the local farmer and paid his debt for all the meat he'd been supplied with...

With the same 100 dollar note, the farmer immediately paid the seed salesman who, right at that time, was visiting the farmer to collect the unpaid 100 dollar bill.

Back in his hotel, the seed salesman closed the circle. In order to settle the hotel bill for that night, he dropped the 100 dollar note on the counter. Just at that moment, the actuary - who'd come down to tell the hotel owner that he didn't like his room - arrives at the counter, picks up his 100 dollar and disappears.

Nothing was spent,
nothing was gained,
nothing was lost.
Nonetheless, thanks to the actuary, nobody in the village had any debts!

This story shows why it's important for actuaries to attend Risk Conferences and illustrates how actuaries can actively contribute to solving the credit crisis.

Original Sources: Free after newciv, Dutch source Aardbron