How should risk managers assess the dangers that beset a bank, insurance group or any other company? In the last few years of financial turmoil, this question has been much discussed and no shortage of ideas has been tossed about; just think of all those debates about value-at-risk (VaR) and other models.
But one interesting perspective on this issue comes not from bankers but a group of actuaries and anthropologists. Yes, you read that right – the idea of these two groups working together might seem odd. Actuaries are trained to be number crunchers. Anthropologists, by contrast, deal with slippery, non-quantitative ideas like culture.
However, in recent months the Society of Professional Actuaries in the UK has been trying, to its credit, to widen its gaze beyond statistics, partly because a growing number of its members are moving into more senior risk management functions. So, when the Society recently held its annual conference in Leeds, it invited anthropologists, such as David Thompson, to discuss the cultural assumptions that shape risk modelling in pensions and insurance.