Friday, December 31, 2021

Book review: ACTUARIAL FAIRY TALES (John Lee)

John Lee, who gave us the eccentric joys of Confessions of an Actuarial Tutor, turns his brand of nerdy humour into re-telling well-known fairytales, such as The Three Little Pigs, Sleeping Beauty and Goldilocks, with an actuarial slant. The results are cerebral, engrossing and often laugh-out-loud hilarious.

There is joy to be found in every paragraph. Whether it’s in character’s names changing to match copula theory in CS2 (Hansel and Gretel is renamed Hansel and Gumbel), or the way actuarial parlance is peppered into the storytelling (witty turns of phrases like ‘diversified portfolio of dwarves and ‘short tactical asset re-allocation’, or the way a character changes from animal to human being described as a ‘transition’), or the way the action is updated to fit into actuarial occupations. So, for example, instead of the Queen in Snow White giving her a poisoned apple, she instead sells her junk bonds that lead our na├»ve princess to bankruptcy.

In Confessions of an Actuarial Tutor, John Lee had lots of fun in sending up accountants, and this motif is entertainingly employed here, with the intellectual gap between actuaries and accountants setting up some of the book’s cheekiest jokes. In Actuarial Fairy Tales, recruiters are also the butt of jokes, being the nefarious baddie in lots of the morality tales. Naturally, the way that recruiters operate have been exaggerated for comedic effect, but there’s definitely a grain of truth in the book’s depiction of their pushy salesman-like tactics.

While the message of a lot of fables tends to be that if you do good, you will see a happy ending, this optimistic tone is not afforded the actuaries in several of the stories in this book, who are put through the ringer in the name of juggling their demanding jobs whilst sitting mentally gruelling FIA exams, and yet a happy ending still eschews them. Which is bleak, but rather more reflective of reality. At least the wit of John Lee’s writing helps the medicine go down.

The actuarial flourishes to the storytelling mean that classic fables, many of which no longer hold up to scrutiny when read with modern sensibilities, are made infinitely more enjoyable than their source material. The cheesiness and contrivances of fairy tales are acknowledged in John Lee’s stories. One such example is in Beauty and Beast, when Belle’s only wish for her father’s voyage, is the saccharine one that he’d return safely. The cloyingness of this line is highlighted and ridiculed appropriately. Another hilarious statistical observation was of the ‘near perfect correlation between fairy tales and princes wandering in woods’.

John Lee has a great comprehension of what worked well about the fairytales his stories are based on, and what worked less well. This means his re-tellings retain the whimsical plot points of the original, with less of the archaic messages. As many of the characters in the stories are trainee actuaries, they seem to be a lot more switched on than their callow counterparts in the original stories, and in my opinion, this makes them easier to root for.

For example, in Little Red Riding Hood, rather than blindly believing what the wolf said, she does exercise discernment, conducting hypothesis testing when the wolf tells her that he’s a grandmother. In The Actuarial Princess and the p-value, rather than a pea being placed under her mattress, it was a piece of paper that quoted pi inaccurately. By using obstacles that are related to Maths, these make the conflicts of the stories more relatable, rather than the fables, many which are set in past eras, and thus have conflicts that a no longer relevant.

For all of the caprice of Actuarial Fairy Tales, it also treats the reader’s actuarial capabilities with respect. R code, Excel commands and bookwork from the FIA exams are sprinkled throughout the storytelling, and John wisely avoids dumbing down the theory or over-explaining the concepts, which would have detracted from the flow of the stories. By not spoon-feeding the reader every line, it also means the reader gets a great sense of satisfaction when they’ve understood an inspired double-entendre like ‘his Ornstein-Uhlenbeck process meant he kept reverting to being mean’.

John Lee expects the reader to be familiar with concepts such as the aforementioned, knowing that if you’ve bought this book, you’re probably an actuary or trainee actuary, and thus, likely to be au fait with these concepts. This means that, two things that perhaps wouldn’t seem to go together on paper – fairy tales and complex financial mathematics, manage to blend together seamlessly.

I mentioned in my review of Confessions of an Actuarial Tutor that John Lee was always three steps ahead of his more low-energy students. That was clearly an understatement; being able to think of ways to repackage fairytales in actuarial theory is a higher-order skill that very few could have carried off with aplomb. John’s beautiful mind has gifted us this delight of a book; I can’t wait to see what he thinks up next.

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