Uncertainty and judgement

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The future is uncertain. What are 5 things actuaries, and those looking to understand the future, should embrace?

This latest bulletin, from Martin WhiteSamuel Achord and Nick Spencer, looks at the complex issue of uncertainty. In a world full of uncertainty, policymakers and others mistake “analysis” for hard facts and believe that detail implies rigour. This false confidence in statistics and models can lead to a failure to grasp the radical uncertainty and fundamentally unknowable nature of the future.

There are five themes for actuaries and others to consider in tackling the problem of uncertainty. Starting with acknowledgement that models do not conquer all, it considers the need to “speak up” when there is an absence of simplicity, the fallibility of human nature, the role of systems thinking and the use of narratives.

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