President’s Message BOB BEUERLEIN
What’s Your Big Data Opportunity?
IT IS DIFFICULT TO PICK UP A NEWSPAPER OR MAGAZINE THESE DAYS and not read
something about Big Data. Big Data seems to be the buzzword that permeates not only business
journals but also general interest periodicals. It is characterized by descriptors such as Volume,
Veracity, Velocity, Variety, and Value.
When you think about it, these descriptors might apply to anything new and complex in our actuarial work.
Think of recent topics that actuaries are dealing with,
like the Affordable Care Act or principle-based reserving.
Aren’t these areas of practice changing rapidly (
Velocity), with multiple applications (Variety), with enormous
data requirements (Volume), in situations that may have
unknown outcomes (Veracity), all in the interest of providing benefit (Value)?
The complexity of Big Data requires that people work
in teams to accomplish the task at hand. It is common for
the team to be composed of some non-actuaries, such as
skilled statisticians and expert computer scientists, who
might be led by an actuary—the quarterback—who incorporates actuarial skills and leadership skills in a complex
project. And, as with any team, we need to know both
what the goal is and what the rules are to reach it so that
our actions are fair and we agree on where we’re going.
On a football team, a quarterback not only knows
what he should do on each play, but also understands
what each of the players on his team should be doing.
The quarterback may not be able to block as well as the
linemen or run as fast as the receivers, but he understands the role of each player on each play. And a skilled
quarterback can see what the defensive players are doing when he “reads” the defense. Thus, by connecting
the dots from all of this information, the quarterback
can make last-second changes—audibles—to optimize
the outcome of each play. He has learned this through
knowing the game of football, countless hours of practice and game experience, and continuously updating his
knowledge through watching videos.
As actuaries, we can be like quarterbacks and add val-
ue to situations by being able to see and understand the
big picture. In dealing with new and complex situations,
we are able to understand the context of these situa-
tions and professionally address them with our actuarial
skill sets. Similar to a quarterback, we may not be able
to execute each step of a project. We may not be able to
perform certain functions as well as the experts. But, we
are able to connect the dots so that we understand what
is being accomplished in the project and fit it into the big
picture—and that leads to the value we seek to provide.
And we have acquired this skill through studying, real-
life experience, and continually updating our knowledge.
And to overlay this, we have earned the public trust
from the many times that we have performed and will
continue to perform actuarial services with integrity and
competence and in a manner to fulfill the profession’s
responsibility to the public. We have to have some fa-
miliarity with what is appropriate and acceptable in our
public policy framework, and that may be contained in
laws and regulations and even company policies.
So back to the initial question: What is your Big Data
Opportunity? You may not be working at all with “Big
Data,” per se, but it is very likely that you are performing actuarial services in areas that are much different
than they were five years ago. Let’s call this your Big
Data Opportunity. Let’s say that you have developed
your expertise in this area through studying, hands-on experience, and ongoing education. Now you have
the opportunity to connect the dots by applying your
unique actuarial skillset in a manner similar to that of
a quarterback. If you understand the project and the
pieces of the project, and the rules that apply, you can
professionally and effectively work with and lead the
experts to successfully achieve the goals of your Big