The theme of the 1983 International Design Conference at Aspen, Colorado was “The Future Isn’t What It Used To Be”. It is remembered because of an historic speech given there by Apple founder, Steve Jobs. However, the expression can be traced back at least to 1937, and has been used by poets, educators, journalists and philosophers. Apparently it resonates with others, too, since it has even been put to music.
It also characterizes our actuarial practice. Anticipating the future means most things are uncertain. However, many of them can be estimated. Our projections are based on things like interest rates and longevity. They are not predictions, but instead are estimates using statistical trends and extrapolations. They also are developed using sound actuarial principles and years of experience.
Here’s the key: today’s estimates of future events will be replaced by tomorrow’s actual outcomes. In this way we can compare the outcomes with our original projections and make in-course corrections. At its beginning, the Society of Actuaries adopted Ruskin’s famous statement, “The work of science is to substitute facts for appearances and demonstrations for impressions.”
It is not always easy to discern the difference between facts, assumptions, estimates, and guesses. I am amazed by news reports portraying opinions and estimates as facts. This can be dangerous when the uncertainties of investments, longevity, expenses, and taxes collide. Actuaries anticipate what will happen if things turn out differently than expected, called “contingencies” in actuarial lingo. Some can be anticipated, but others are beyond professional methods and assumptions.
In this way I harken back to the 1983 Aspen conference. Jobs’ speech is available on YouTube, and it makes for interesting listening. He spoke of the future impressively, and yet what has emerged exceeds even how he viewed the future in 1983. Today’s view of the tomorrow almost certainly will be different than the actual results once they emerge. Actuaries are called on not only to do a good job of estimating and planning, but to revise our estimates as the future changes in ways we had not anticipated. In that way, you could say that the future isn’t what it used to be.
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