Perspective on Risk

The common denominator for all actuaries is that our focus is to solve problems that involve risk. Not only is that the common theme for actuaries; that is the common problem for all businesses. Not only is risk a common problem for all businesses, but it is the number one fear that plagues us and prevents us from moving forward. Uncertainty. How can we deal with it?

Nobody has risk conquered. That is what makes it interesting. However, I have gone head to head with risk for my entire career. At last count, that is over 27 years. Some battles have been won; others have been lost. Sure, I have taken the actuarial exams. Sure, I have read other literature on risk. However, most of my “wisdom” that I have learned about risk has come through experience. Often the school of “hard knocks”.

Before going further, let’s make sure we are on the same page regarding the scope of risk. It is true that risk involves uncertainty with regard to sales, expenses, decrements, interest rates, and profit. However, it is also true that risk involves other business issues that are less mathematical but just as important.  Examples include the risk of not getting a project completed on time, the risk of losing your job, the risk of not finding a job, the risk of being on the wrong career path, etc. Risk reveals its ugly head in so many dimensions. In fact, the more you look for it, the more you observe how it impacts virtually every aspect of your life.

Thus, even though I have read my fair share of the “theory” of risk, most of my focus on risk has been as a practicing actuary out in the “real world”.

I would like to share some of what I have learned. Rather than writing long articles, I want to package what I have learned in a small bite size. Then, I want to deliver risk tips to you in a convenient manner so they are easy to digest.

Most of our lives are spent “in the weeds” dealing with messy problems. It is easy to miss the forest from the trees. Most of my lessons that I have learned have been from battling in the weeds. However, I have the advantage of time to look back at the experience and see a bigger picture. In other words, what were the key issues that made the actuarial project succeed or fail? These e-mails summarize what I have learned in a couple of sentences per topic.

Here’s the details: I am sending one e-mail every business day. That is 5 days a week. The e-mail will arrive early in the morning. The subject of the e-mail will give you the topic. I will provide one concise comment about the topic that I think will be helpful to you. Then, as a “secret sauce”, I add one more comment at the end of the e-mail. That is it. You can subscribe and receive these e-mails every day. It should take about 1/2 a minute to read. But, perhaps a day to ruminate and digest.

Here are examples of a week of e-mails.

Day 1

Perspective on the Risk of Poor Planning

Comment: Live life with the end in mind. What do you want to look back on if you reach age 90? Make decisions today to have no regrets…Investing in the right people produces an immense ROI.

Day 2

Perspective on the Risk of Going Down a Bad Path

Comment: What are your habits? Are they what you want them to be? They will be repeated unless you actively change…Today is the day to get rid of a bad habit.

Day 3

Perspective on the Risk of Earnings

Comment: There is no security in a job. Anybody can get fired or bought out…Solving other people’s problems is always in demand.

Day 4

Perspective on the Risk of Personal Confidence

Comment: It’s perfectly normal to be uncomfortable, frustrated and confused when you work towards a goal and it seems like its taking forever. But give it time, energy and focus, and soon you’ll wonder why you ever doubted yourself…Notice I said “and” not “or”.

Day 5

Perspective on the Risk of Losing Connection with Others

Comment: If you work for a company, understand the vision and mission of the company. Put your energy and focus on the big picture goals for the company…Don’t be distracted by the nonessentials.

You may consider these as risk nuggets or your daily “risk vitamins”. It is my observation that the “unprepared” live by consuming aspirin and other pain relieving medication. However, the wise are faithful in taking their vitamins. Daily. Doing what is right to prevent the pain. These e-mails are not aspirin. They are your daily vitamins to make you an expert in the real world of risk.

Why not subscribe and give it a try? Even if they only prevent one mistake, it will be worth the effort. This is one choice that has “no risk”. Subscribe here: