History on the development of programming in the actuarial profession
It has become evident in the work place that programming has become an essential skill. The importance of developing IT skills is highlighted by the Work Based Skills and Actuarial Training Offices (Actuarial Society of South Africa, 2013). Also, historical documentation has emphasized the use of technology in life insurance as well as pension funds as early as the World War II era.
Yates (1997,p.60 and 1999,p.5) stated that in the 1950s life insurance was introduced to the use of computers as soon as they were available to commercial firms. He further elaborated on how insurance companies impacted the ...view middle of the document...
The contributions made by Edmund Berkeley, who was a qualified mathematician and actuary, were substantially exhausted by Yates(1997,p.66). For instance, ‘Berkeley examined the types of insurance processes that could be aided by computers and was experimenting with the logical sequences of steps needed to accomplish such processes.’ Therefore, it is evident that actuaries have been involved in the IT environment for over six decades.
Harsant (1990,p.2) describes how he as well as other actuaries initially used ICL 2903,a small Batch Machine which exposed them to inter-active computing. He further explained how in the 1980s there was a need for the use of micro-computers due to the requirements of users to use information available on their computer systems. It is brought to one’s attention that IT has an influence in the success of a business, specifically in the insurance industry. ‘The use of IT. has provided competitive advantage in a number of cases; insurance companies tended to develop their own in-house core administration systems. The early 1980s saw consumer acceptance of unit linked contracts and increased competition between insurance companies’ (Rennie and Sheppard 2014,p.6). Saksena (1981) after observing the importance of programming in the actuarial science field made a contribution to history by giving a description of the actuarial programming language in the year 1981. Rennie and Sheppard (2014,p.10-11) emphasized how in the 1990s businesses moving foward needed to invest in information technology inorder to reduce costs and expenses at the same time improve customer service. Although outsourcing had been preceived as being the optimum solution because of the growth in business, the necessity for technology and the change in technology has resulted in large insurance companies investing large sums of money in IT departments and requiring actuaries to be knowledgable in programming. Based on histroical documentation it is evident that actuaries were among the professions that took an active role in developing technology, specifically computer development.
Rennie and Sheppard (2014,p.14) demonstrated in Figure 2 how the systems environment operates and a number of functions in the diagram require an actuary’s involvement; thus, emphasizing the importance of actuaries being familiar with IT and Programming.
Figure 2: SYSTEMS ENVIRONMENT (Rennie and Sheppard, 2014)
Areas of Expertise
‘Programming is to computers as probability is to actuarial science; without it there can be no understanding of any value, and only by acquiring some manipulative skill in the practice of its rules and logic can any of its implications be explored’ (Benjamin, S, 1963).
The fact that actuaries make use of computers more frequently has made IT an essential part of the actuarial profession. According to the Curtin University (n.d), actuary in IT is classified as a non-traditional area. What this means is that the involvement of actuaries in IT is...