Liam Monaghan - Chief Actuary, Ladder Life

Liam Monaghan - Chief Actuary, Ladder Life

How long have you worked as an actuary?

I’ve been an actuary for 20 years. I got my start in South Africa, studied actuarial science in university, got the FIA qualification through the Institute of Actuaries in the UK, and became an FSA when I moved to the US about 12 years ago. 

Which markets have you worked in as an actuary?

I’ve worked in Africa, Europe, Asia, and the US. As for domains, I’ve worked in P&C and life, including life products, annuity products, corporate work, valuations, marketing, business development, and, primarily, product development and design. 

If you could have one superpower, what would it be?

That’s easy, the power of flight. 

What do you see as key characteristics of innovative actuaries?

I think of it as five key things.

The first, which I think is particularly true for actuaries, is open mindedness. If you’re set in your ways then innovating will be difficult; innovation is really about making things better and different.

The second one is curiosity; you have to be curious as to why things work the way they do. I like to use the ‘five whys’ approach. Asking ‘why’ five times is a very interesting way to approach a problem, and by the fifth you’ve gotten to the kernel of truth that allows you to expand your thinking.

Third is courage, and I think actuaries already have that because it’s a tough, complex profession.

Fourth, which is one I think is interesting in the actuarial profession, is intellectual humility. I think if you’re open to the fact that there are many potential solutions, not only yours, then you open your mind to more possibilities, which invites innovation in.

The last is stamina. Can you push past the ‘no’ to get to ‘yes’? Invariably change is tough and people struggle with that, so can you get past that initial ‘no’ to make things better.  

What factors do you believe influence the impact actuaries can have within their organizations?

I think as actuaries think about how they can make an impact, a key part of that is connection.

Can you connect to the different parts of the organization and develop a good understanding of how everything works together? What are the functions and roles of others, what are their goals, how do they fit in with the overall strategic plan - answering these questions allows you to form those relationships to accomplish your goals.

One that’s not spoken about much in the actuarial profession but I think is important is empathy. Empathy helps create deep influence, whether it’s empathy for the end customer, clients, teammates, etc. Understanding what that person is looking for can really go a long way.

Finally, I’d say passion to make a difference and support from leadership is important. Actuaries need the time, space, and support in order to enable actuarial innovation and change.  

What are some key ways you see the actuarial profession evolving in the next few years?

Actuaries’ domain of influence is expanding, and I think the actuarial skill set lends itself well to solving many different problems.

I see a lot of potential in collaboration with data science, software engineering, marketing, and other domains. Also, looking at the marketplace and how things are evolving, actuaries have tended to be specialists, but I think they must be comfortable being more generalist and working in cross functional teams to solve problems.

One thing we have not done well as a profession is getting close to that end customer, which I see as being absolutely essential. Do you have a deep understanding of what drives that customer? What are the things that are important to them? Getting closer to customers and not being afraid to ask them what they need directly is something I think we’re going to need to evolve towards more.

Despite there being significant collaborative potential between data science and actuarial science, the two expert fields don’t always mesh in insurance. How do you believe they can work together more successfully?

I think actuarial science is the original data science. I don’t see a huge disparity there or a reason for those two not to collaborate.

At Ladder, data science and actuarial science teams work very closely together. It’s about defining the problem and the hypothesis, structuring the data, using those new techniques and applying them to insurance solutions. There’s definitely overlap in skill sets. Data science brings depth and knowledge and the actuarial side brings industry expertise. Working together I really believe creates better solutions, so it’s interesting that you say they don’t always mesh, as that hasn’t been my experience.

I believe actuaries will have to learn to work better cross functionally, which includes working with data scientists. A potential solution might be structural; creating cross functional teams rather than isolating based on domain.

What makes innovation impactful? 

Actuaries are not afraid of complexity, I think they almost prefer it because the problems they face are usually quite complex. I think actuaries’ role to play with innovation lies in improving things by taking complex problems and simplifying them. If you can really understand a problem very deeply, in all its granular complexity, and present a solution  simply to the user, that’s the goal.

They say simplicity is the ultimate sophistication, and I agree with that. If you look at it as ‘how do we make this easier, more simple, more effective’ when it comes to solving user problems, those answers and widespread adoption are how innovation becomes impactful.

At Ladder, we put the user at the center of everything we do. We constantly ask, ‘how might we do this?’ and that’s the invitation to improve.

What are some of the more impactful innovations in the actuarial field and why?

For me some of the best innovations are born in the insurance world when people get access to much needed financial products that they wouldn’t have had otherwise.

I’ve seen solutions in Africa and Asia getting insurance to people without bank accounts, using text messages to pay for things. Crop and health insurance solutions in developing countries as well, which help lubricate micro-finance systems to alleviate poverty. These innovations are important examples of how insurance can unlock financial systems to allow people access.

Another is incentivizing health improvements and rewarding those through better and cheaper insurance. You might say this isn’t strictly actuarial, but if you look at the teams coming up with these solutions, actuaries play an important role. Seeing actuarial teams and insurers solve these really meaningful problems is where I gain a lot of pride in what we’re accomplishing as a profession and industry. 

What is the best type of change actuaries can adopt to become more influential in the insurance industry?

One change that has been personally very impactful is embracing design thinking.

What I mean by that is an iterative process of seeking to understand the user, challenging those assumptions, redefining the problems you’re trying to solve so the way forward is clear, and asking how this impacts the user. Design thinking can be so impactful in many ways, regardless of the profession.

The second is working with cross functional teams. If we can get better at embracing different areas and skill sets, the profession improves and we become more influential. Ultimately, we have to measure ourselves against how we make things better for the user. That’s what really counts.

What advice would you give someone considering an actuarial career today?

The ways of thinking and problem solving you learn throughout the actuarial training process are incredibly valuable. Understanding risk, codifying it, and adding a financial figure to it, is valuable in so many ways. Really understand those principles, take them to heart, and then think more broadly about where that skill set could be beneficial.

With a broader mindset, the opportunities with this skill set are really endless. Be comfortable learning and using new technologies - there’s other things besides Excel. Get as much cross functional experience as possible; take on those projects and roles. Expand your capabilities every chance you get, whether that’s data science, design, marketing, etc.