By Keith Walter, FCIA
Research Council Chair
“In a few short weeks, everything has changed.” You have probably heard that statement over and over recently.
Unfortunately, for many in Canada that statement is true. Businesses are struggling to survive, and some will not be able to recover. Individuals approaching retirement have lost a portion of their retirement savings without the chance to earn it back. Sadly, for too many, their lives have been cut short by this new and deadly virus.
For most actuaries working in Canada, however, we don’t expect COVID-19 to be an existential crisis in the sense of financial ruin or loss of life. Protected by well-established public health systems, well-run financial institutions and pension systems, and at least for most of us, the ability to continue working safely from home, our professional practices may be able to continue largely unchanged.
The real question for actuaries in Canada is not will we fail to exist, but will we fail to remain relevant.
Actuaries are trained to see the long term, collect data, and take thoughtful consideration before making changes in assumptions and practice. These are all good principles in normal times, but they must be balanced with more agility, flexibility, and urgency in a time of rapid change.
Just to put this in perspective, four weeks ago at the end of March, Canada had identified only 5,645 cases of COVID-19 and there had been 62 reported COVID-related deaths. In the world, there were just over 650,000 cases with approximately 30,000 deaths. At that time, these statistics were not too alarming and certainly didn’t seem to indicate any noticeable change in overall mortality patterns in Canada. Just four weeks later, as of April 25, Canada had recorded 45,351 cases and 2,556 deaths. Similarly, world statistics had grown to more than 2.9 million cases with more than 200,000 deaths.
|Dates||Canada Cases *||Canada Deaths *||World Cases **||World Deaths **|
**www.worldometers.info/coronavirus/ (March 28@18:27GMT and April 25@19:09GMT)
As actuaries reviewing mortality using traditional models and methods, are we able to provide appropriate advice and guidance in this situation? Do we need to develop new methods, models, and approaches that are better able to balance the long-term perspective with the realities of short-term discontinuities?
If actuaries in Canada are to remain relevant, we need to respond to the challenges of today and be willing and able to speak out with confidence based on sound and timely analysis. There are many questions, and we should be proactive in answering questions like the following:
- What is the impact of COVID-19 on overall population mortality and longevity, and on all types of insurance benefits?
- Are the drastic measures implemented to combat the virus having other unintended consequences for mortality and morbidity patterns?
- Will this crisis lead to significant, permanent changes in insurance, pensions, or social programs in Canada?
- How can actuaries work in strategic partnership with governments, public health entities, medical research, academics, and other contributors to solve the difficult issues of today?
- What will the new normal be for Canadians over the next few years as we deal with the full impact of COVID-19?
I am pleased that the CIA has dedicated money to support research in response to COVID-19. Coming soon, the CIA will publish a call for research and papers. I hope many will take advantage of this opportunity to help ensure that actuaries in Canada remain relevant, especially knowing that in a few short weeks everything can indeed change.
This article reflects the opinion of the author and does not represent an official statement of the CIA.
This article originally appeared on the CIA COVID-19 Hub.