Update: This article has now been published on the SOA website and can be viewed here.

At Corality we have a number of consultants with actuarial backgrounds and we support the initiatives of Society of Actuaries with their professional development training and research programs.

In an article soon to be published in the SOA newsletter, I share my top 10 tips to reduce errors in excel modelling:

• Be transparent
• Fewer formulae
• Be consistent in Excel calculation blocks
• Be flexible to allow for all assumptions to change
• Keep it simple stupid
• Use checks to verify calculations in Excel
• Control relative and absolute references in Excel “$”
• Use formats and styles
• Have models peer reviewed
• Assess your team’s capabilities and introduce modelling standards

Amongst other tips, this article illustrates the importance of being transparent with key calculations and assumptions, when to use high-end models to verify more detailed models, how consistency makes it easier for the end user to understand and review a model and how to be flexible to allow assumptions to change. It also discusses how to asses team capability in order to decrease modelling risks by consulting professional service providers and implementing best-practice modelling standards.

Corality is a supporter of the Society of Actuaries (SOA) and follow their commitment to education and research on actuarial trends, public policy issues and further expansion of the actuarial profession. The SOA vision is for actuaries to be a leading profession in the measurement and management of risk.

While you are waiting for this article to be published, you may enjoy our blog “4 free alternatives to a financial model audit“.