How To Be Better

If you’ve seen the footage of people swaying along to Sophie Scott’s early morning energy, you’ll agree the actuaries at the 2024 Summit were up for the event theme – “Think Bigger, Live Better”.

In this article, we cover three plenaries that demonstrated how bigger, broader thinking can lead to better outcomes – and better lives.

Keynote: Harnessing Neuroscience for Peak Performance

Former ABC Health reporter Sophie Scott OAM got her session off to a fabulous start by bringing the hall of actuaries to their feet to dance, leading them in a meditation session, then teaching them how to analyse their sleep patterns and breathe optimally.

According to Sophie, you can’t be a consistently high performer unless you listen to your body and learn to deal with stress. She reminded attendees that “your body doesn’t know the difference between dealing with a stressful email and running from a tiger.” And that burnout – the condition that follows long, unrelieved exposure to stress – will bring you undone. “The body often tells us what the mind doesn’t want us to know,” she said, speaking to one of the key messages of the bestselling book by trauma psychiatrist, Bessel van der Kolk, M.D., The Body Keeps the Score.

Sophie then walked (or, more precisely, ran and stretched) delegates through practical ways we can build the self-care routines crucial to high performance; like mastering your morning, meditation and, most crucially of all, engaging in healthy human relationships.

In a further striking note about the neuroscience of happiness, Sophie discussed Professor Barbara Fredrickson’s “Broaden and Build” theory, built on research which shows positive emotions actually undo the effect of stress on your mind and on your body. “It fuels productivity… that makes you feel good because you’re being productive and doing good work. So, you have the positive emotions again, and you get this amazing and beautiful virtuous cycle, which is what we want,” Sophie said.

Think Bigger, Live Better: Investment Edge Cases 

Head of Investment at Platinum and Chair of the Summit Organising Committee, Douglas Isles chaired a fascinating session featuring speakers with quite different jobs and highlighting the value of context-sensitive thinking.

The Future Fund’s Sam Killmier talked about the Fund’s role and about scale. According to Sam, the Future Fund has to think: ”What is it to be a big investor?” Unlike many other investment funds, who think top down via Asset Allocation and then about what experts they use in each segment, the Future Fund can truly build from the ground up and invest holistically across the whole portfolio.

Recalling the actuarial control cycle, Sam spoke about Future Fund’s own control cycle, which has three cycles within it: the foundational cycle (“What do we believe about the world? What is our secular outlook?”); the strategy cycle (“How are we going to set our risk level?”); and the asset cycle (“the best opportunities”). According to Sam, this link between the foundational and strategy cycles can determine whether investment succeeds or fails. “The big trap that boards and committees fall into is that if they haven’t properly defined their risk appetite in different dimensions – market risk, liquidity risk, whatever – the market will take them there sooner… a poorly defined risk tolerance is a recipe for investment failure.”

Quoting John Maynard Keynes, Sam underlined the importance of adaptive thinking: “It’s all about whole portfolio. It’s about knowing yourself and building a strategy to your objectives. Be prepared to change your view and your strategy and find the best opportunities you can, but make sure that you’re rounding it out by looking for any biases and correcting those.”

Suzie Riddell from Social Ventures Australia (SVA) also discussed the importance of clear, focused thinking. “What is the problem we are trying to address?” she asked. “And then what are the different tools we can bring to bear there to try to address those. You need to clearly articulate what the social outcomes are that you are trying to achieve and, crucially, measure them.”

Suzie pointed out that one in four people in Australia today experience disadvantage in the form of poverty, social exclusion and deprivation, issues which SVA seeks to address through using a data-driven, evidence-based approach to philanthropy.

They took over the collapsed ABC Learning Early Childhood, which operated over 700 centres across Australia, transforming it into a billion dollar business that supports 50,000 children and families.

They’re also involved in a program called New Pin that focuses on helping parents – many who’ve come from broken families themselves – become better parents. Investors provide upfront capital and if the program achieves its predefined outcomes, governments pay investors a financial return. The New Pin Social Impact Fund ran for a full seven years and was a success for the families and for investors, with 391 children safely restored to the care of their families, representing a restoration rate of 61%.

As Suzie said, those kinds of program are truly a case of thinking differently, of “pioneering new ways of investing and using returnable capital to demonstrate what works and to generate both a financial return and a social impact”.

And yes, actuaries were heavily involved.

Digitisation and Your Consumer

Chaired by Institute CEO Elayne Grace, the digitisation session showcased how AI and data science are reshaping three very different businesses.

Iwan Juwono of Grab explained how an app originally designed to provide safe travel for women became a super app that met people’s need for car finance, banking, food delivery and insurance. An app that delivers “financial and economic empowerment.” For Iwan, the power of modern technologies is that they can create completely new business models – and break down economic barriers.

Telstra’s Lisa Green, the group owner for data and AI solutions, was similarly excited about the promise of technology.

“I have the best job in the whole company because I have all the new toys,” she said.

As the inaugural recipient of the CEW and Actuaries Institute scholarship for Women Leaders in Data Science and AI, Lisa knows a thing or two about the impact and potential of AI. According to Lisa, years of investment in digitisation means Telstra is becoming an AI-first organisation, implementing AI in all key business processes.

“The way we’re developing this technology means that actually it’s quite easy to shift to different pockets of value in the organisation, so the general AI capability will be rolled out to field staff, and internal staff have similar capability. There’s some newer examples where we’re delivering effectively machine learning insights via an API that can be used in the development of new products, and how we improve your experience if something goes wrong. It really is touching all parts of our business,” Lisa said.

Cathay Pacific’s Frankie Chan took his audience back to the horror-show of COVID, recalling a day in March 2020 where the entire Cathay Pacific network carried 58 passengers. During the pandemic, the parts of Cathay that did well were based on technology, including cargo and loyalty. Today, he works in the part of Cathay where both technology and actuarial skills are incredibly valuable – understanding customer segments and optimising pricing, as well as marketing and communications, to drive growth in the lifestyle and membership portfolios.

“When it comes to offering more tailored service, or targeting or personalisation of offer in a more effective way, we will use a propensity model specifically looking at understanding who are likely to be attracted to products and services,” Frankie said.

Interestingly, while all our digitisation experts were technophiles, each also focused on their people; in areas like staff technology training, simplicity in customer interactions and diving into customer segments to understand human needs.

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