Ongoing thievery

Imagine you own a company that manufactures and sells bread making machines. You're approached by another company that wants to make and sell bread but doesn't have the machines to do so. They want to lease your machines to do so. You then proceed to make the appropriate calculations and quoted them a leasing fee, which they accepted.

Years later, your client decided not to renew the leasing agreement. In fact, they are going to make their own machine just to produce and sell bread. They then propose to engage you to perform regular quality assurance checks on both the machine and the bread. You determine that this cost much lesser than leasing out your machine and so quoted a significantly lower fee for such checks.

In the course of your review, you notice striking similarities between their and your machine. In fact, they even copied your unique identification number of the machine you leased to them before. How will you feel? Furious, right? You would have earned so much more if they purchase your machine - machine that you had spent time and effort to create and refine.

That's what happening in the consulting world, especially in the less developed country. Actuarial spreadsheets and reports are copied abundantly without appropriate compensation. Often these spreadsheets/reports are created and refined without being charged to any particular client (how would you feel if you are charged very high fee simply because you're the very first client?) and the cost is slowly recouped through providing consulting services, teaching clients how to create sample spreadsheets (not the full version) and reviewing them, or simply outright sell such products (if permissible). To just steal them is morally and, usually, legally wrong.

This recently happened to the actuary and I but the thief in this case could have been our associate (we worked together with another consulting firm in that foreign country). There is no way that the client could have gotten those spreadsheets. Since neither the actuary nor I did it, only suspect left is our associate. It may be common practice in that foreign country but this is detrimental to all actuarial consultants as that just make us poorer (by not getting fair compensation) and perpetuate the notion that this is acceptable practice. Humph!
2 Responses
  1. William Says:

    But actuary is more than spreadsheets right?

  2. Jaded Jeremy Says:

    Mostly spreadsheets especially for non-life insurance.