At one point, spreadsheets, especially Excel, were the go-to tool for actuaries. They were convenient, powerful enough for most calculations, and easy to adopt across teams. Just like a once-popular sandwich shop that offered customisation and quick service, Excel earned loyalty for its simplicity and reliability. But over time, that same spreadsheet solution has shown its age. Menus haven’t changed, service is inconsistent, and what once worked for everyone now struggles to satisfy, according to Akur8.
In the actuarial world, Excel is still ubiquitous, but that doesn’t mean it’s still the right tool for modern challenges.
Why spreadsheets fall short in actuarial modelling
Spreadsheets remain useful for quick calculations, basic data analysis, and generating visualisations. Excel can replicate nearly any function of a financial calculator and supports basic statistics and even some probability distributions, including normal, lognormal and chi-square.
However, when actuarial models become complex, spreadsheets hit a wall. Tasks like developing Tweedie models or running machine learning algorithms are far beyond Excel’s capabilities.
You might patch together external scripts or switch to tools like R or Python—but then you’re juggling systems and increasing your operational burden. If you’re spending more time maintaining the spreadsheet than using it, that’s a clear sign you’ve outgrown it.
The risk behind the file names
Beyond functionality, spreadsheets introduce operational risk that can’t be ignored. The actuarial process often involves multiple revisions of a model, but Excel offers no formal version control.
Files are copied, renamed—“final”, “final_v2”, “final_corrected”—until no one is sure which version is accurate. This creates confusion, delays, and, in high-stakes environments, regulatory exposure.
What’s more, spreadsheets house both data and logic, and any change—intentional or not—can go undetected. With no audit trail or input protection, data can be overwritten or misused without a single alert.
In practice, this means actuaries may base their calculations on flawed or outdated data, simply because a cell changed without notice.
The illusion of a “free” tool
Organisations often assume that spreadsheets are cheaper than specialised actuarial platforms. But the true cost of Excel lies in the time spent on manual fixes, the difficulty of ensuring accuracy, and the heightened risk of error.
Those hidden costs mount quickly, especially when actuaries are forced to build custom scripts to bridge Excel’s gaps.
Modern actuarial software, on the other hand, offers built-in capabilities that eliminate much of this inefficiency. Tools now exist with support for generalised linear models (GLMs), automated variable selection, and advanced analytics—all without writing a single line of code. They include robust version control, audit logging, and input traceability, ensuring transparency across every model.
Why modern tools are worth the switch
Moving to purpose-built actuarial software isn’t just about functionality—it’s about risk management, collaboration, and future-readiness. These platforms are built for teams, scale with data volume, and support real-time editing across departments and regions.
Every change in a model is tracked, logged, and available for audit. Inputs, assumptions, and results are all transparent and easy to verify. Unlike spreadsheets developed by individuals under time pressure, third-party software undergoes rigorous testing and validation by dedicated development teams. Quality assurance is baked in, not bolted on.
Time to upgrade your actuarial toolkit
Spreadsheets will always have their place. For quick estimates or early-stage ideas, they’re still useful.
But when accuracy, auditability and collaboration matter, actuarial teams need more. Third-party tools offer significant advantages—greater governance, reduced error risk, and more efficient workflows—often at a comparable or lower total cost when the real risks are considered.
So, while Excel may feel familiar, it’s worth asking: is it still delivering what your actuarial team needs? Or is it time to try something new?
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