Welcome to Matters of Mind (MM)

September 2024 second edition

"Hope is like a road in the country; there was never a road, but when many people walk on it, the road comes into existence."  —  Chinese writer and literary critic Lu Xun on the power of hope

An inspiring quote: encouraging us to walk with others who have the same aspirations. Take your exam prep for example, why not study with others or check in with others as you sit down to study. Hope as a collective can be a force for bringing personal goals into being, especially when combined with regular positive action.

Economic matters

Isn’t this the problem?

South Africa has not recovered from the 2008 financial crisis as well as other economies.

We were on track with the rest of the world’s growth up to 2008 but flat lined for over a decade thereafter. We have dramatically underperformed the rest of the world and our peer group of middle-income countries in long term economic growth. Without getting into the debate about broad based and inclusive growth, our per capita growth is flat or negative in real international or constant dollar terms. To state the obvious, it’s not really possible to grow jobs without growing the economy in real terms.

Read this short but fascinating paper, maybe you have some theories of your own on why our economy is struggling. 4min read

Financial Services Industry

Investec closes accounts linked to South Africa's political elite

Investec Bank closed the accounts of Deputy President Paul Mashatile’s associates after questioning transactions involving millions of rands linked to their company when Mashatile was ANC treasurer. The bank cited reputational risks as the reason for shutting down the accounts.

3min read

Abbreviation for Million and Thousand: K & MM Meaning

If you’re confused about the letter designations that stand for thousands and millions, you’re not alone. And it’s not your fault. In fact, it’s one of our most frequently asked questions. Here’s why you’re confused and what to do about it.

Interesting reading and useful information. For any piece of communication when it comes to abbreviations, consistency is key. 3min read

Diversity and Inclusion

How fund groups rank on gender parity – and how they retain women

LONDON: This year, Citywire’s Alpha Female report showed that women continue to make up a small percentage of portfolio managers. But there were more positive signs of progress. Looking at the gender split in portfolio management teams, some of the largest fund groups are ahead of the curve, with more than a third of their funds run by women.

3min read

General Insurance

The ongoing digital transformation of insurance broking

Artificial intelligence (AI) and big data are driving a shift from traditional broking methods towards dynamic, data-driven strategies aimed at enhancing customer experiences and anticipating their future needs. This transformation was the focus of a recent seminar hosted by the Insurance Institute of Gauteng (IIG), where a trio of non-life insurance experts gathered to present on the evolving landscape of insurance broking in the digital age.

4min read

Viewpoint: How Insurance Industry Can Use AI Safely and Ethically

Artificial intelligence (AI) is on the brink of transforming most aspects of business, including insurance, but it needs to be used responsibly, according to Zywave Chief Technology Officer Doug Marquis, who takes a look at some of the practical steps insurance companies can take to use AI safely and ethically.

5min read

Litigation costs drive US liability claims by 57% over past decade, reveals Swiss Re Institute

Social inflation has become the main growth driver of US liability claims, according to Swiss Re Institute‘s new Social Inflation Index. Primarily due to a rising number of large court verdicts, social inflation increased liability claims in the US by 57% in the past decade and reached an annual peak of 7% in 2023.

Learn more about social inflation and how judicial systems in the West handle these claims. 3min read

Cyber Insurance: What Businesses need to know

Cyber insurance has become a crucial safety net for businesses, particularly in the face of escalating ransomware attacks. This financial safeguard promises protection against the often devastating consequences of cyberattacks. However, as ransomware incidents have surged, so too have the premiums for cyber insurance.

3min read

Exploding Pagers Sound Global Alarm on Supply-Chain Security

Thousands of pagers and other devices exploding in Lebanon this week mark a new and deadly escalation in the use of supply chains against adversaries, giving new urgency to global leaders’ drive to reduce their dependence on technologies from rivals.

The explosions were on 18 September. This article shines a light on the vulnerabilities industry and governments have to account for with rising geopolitical conflict. 4min read

How the need for secure supply chains is propelling blockchain

A PwC study predicts that blockchain’s ability to track provenance will contribute US$962 billion to global GDP over the next decade.

Every product has a story. One of the major benefits of blockchain technology is that it allows parties to trace the origins and follow the journey of just about anything, enabling far greater confidence and safety in supply chains and helping to prove the provenance of goods, whether they’re fresh produce or raw materials. Our study identified three key areas that illustrate the enormous potential blockchain has in the area of provenance: its ability to combat counterfeits, to prove sustainability credentials, and to promote food or product safety.

Fascinating 8min read to increase your understanding of blockchain and supply chains. I am reminded of advice from a recent Exam Techniques workshop: know your product and its ecosystem and apply the actuarial control cycle to its lifespan.

Lithium Startups Bet on High Demand in Battery-Powered Future

As the world leans into electrification, it will need more lithium. A key ingredient in the batteries that power everything from electric vehicles to cell phones, demand is projected to accelerate over the next decade.

To meet it, a new crop of startups is working on novel ways of producing the valuable metal and promising to open untapped lithium sources. They’re also battling heavy economic headwinds, pushing their technology forward amid a current market slump.

Such an informative read – well worth the 6mins.  Consider the full cycle of the role of lithium from extraction to the EV.

Health Insurance

AI and what it might mean for healthcare in SA

With varying degrees of success, artificial intelligence (AI) has begun to play the role of research assistant, radiologist, health educator and even therapist more than most of us realise, but with rapid advancements in the technology, the implications for healthcare, especially in countries like SA, are mixed.

In depth article, well researched topic.  8min read.

Courier delivery of antiretroviral therapy: a cohort study of a South African private-sector HIV programme

Courier delivery has become a popular antiretroviral therapy (ART) distribution method in some HIV care settings, yet data on ART courier delivery and how it relates to ART outcomes are scarce. We studied the differences in viral suppression rates between individuals from a South African private sector HIV programme receiving ART by courier delivery and those receiving ART through traditional retail dispensing.

An interesting, well formulated and researched paper recommended by one of our editors for those in the Health practice area. It is a full paper which will take at least an hour to read.

South Africa: Mandatory Health Insurance for South Africa Is an 'Upgrade' On NHI, Proponents Say

The idea of mandatory medical scheme coverage for employed people has made a comeback after the case for it was made at a recent conference. The policy move was previously on the cards in South Africa but faded after the ANC opted for National Health Insurance (NHI) at its 2007 national congress where Jacob Zuma was elected as the party's new leader. Chris Bateman unpacks how a system with mandatory medical scheme membership for the employed might work and asked local experts whether it represents a viable alternative to government's NHI plans.

Study links personal and work-related factors with low resilience among doctors and ambulance personnel

You can access the paper cited in the above article from the last edition of MM here.

Banking

Generative AI is ‘live’ in the bank, says FNB CEO

The South African banking industry’s digitisation of financial services will sustain its trajectory, as more smartphones become readily available at a price point most South Africans can afford.

This is according to First National Bank (FNB) CEO Harry Kellan, in an interview with ITWeb after the 

bank last week announced its financial results for the year ended 30 June.

2.5min read

Retirement / Pensions

Beating the Default Paradox: Better Support for Members nearing Retirement

Benchmark research shows most retirees (61%) wish they’d had more support at retirement. The reality is that most members are unaware of the post-retirement (trustee endorsed annuity strategy) options and support that their retirement fund’s offer.

4min read

Retirement savings under threat from criminals using Artificial Intelligence

While the world marvelled last year at the ease with which artificial intelligence (AI) tool ChatGPT completed tasks for everyday users, the criminal underworld celebrated the launch of FraudGPT on the Dark Web in July 2023. Actuary and damages expert, Gregory Whittaker, describes the emergence of FraudGPT as particularly bad news for retirees, who are already at significant risk of losing their retirement savings to cybercriminals.

Alarming 3min read

About YOU

World Mental Health Day is an opportunity to raise awareness of mental health issues around the world and to mobilise efforts in support of mental health. 

Communities can play a part in bringing our lives into equilibrium and our mental well-being into focus. Join us on 10 October from 12:30 – 14:00 to hear from those who have benefitted from these communities and also work in it.  If you are not a member of ASSA and would like to attend, please contact Chantal Petersen: cpetersen@actuarialsociety.org.za before 9 October.

Please register even if you cannot attend, as the recording will be made available afterwards.

What makes a person seem wise? Global study finds that cultures do differ – but not as much as you’d think

We all admire wise people, don’t we? Whether it’s a thoughtful teacher, a compassionate doctor, or an elder in the community, we recognise wisdom when we see it. But have you ever thought about how people in different cultures perceive wisdom? Does someone in Morocco view a wise person in the same way as someone in Ecuador? Our recent study explored how people across cultures think of wisdom.

The article is a positive 4min read. You can access the study freely here and The Geography of Philosophy consortium can be accessed here. 

The *Updated* Great Mental Models v3: Systems and Mathematics

"Feedback loops are the engines of growth and change. They’re the mechanisms by which the output of a system influences its own input. Complex systems often have many feedback loops, and it can be hard to appreciate how adjusting to feedback in one part of the system will affect the rest.

Using feedback loops as a mental model begins with noticing the feedback you give and respond to every day. The model also gives insight into the value of iterations in adjusting based on the feedback you receive. With this lens, you gain insight into where to direct system changes based on feedback and the pace at which you need to go to monitor the impacts.

Feedback loops are what make systems dynamic. Without feedback, a system just does the same thing over and over. Understand them, respect them, and use them wisely.”

This is highly reminiscent of the actuarial control cycle. The link leads you to the website where you can find a series of mental models books. Worth looking into, there are also some free chapters.