Picking up the Pieces: How to Benefit from Big Mistakes

By Tanner McKerlie

The Stepping Stone, July 2025

You are going to make mistakes in your career. No matter how knowledgeable or meticulous you are as an actuary, nobody’s work can be perfect 100% of the time. If you’re lucky, the mistake is immaterial, or it gets caught before it can cause any harm.

Unfortunately, you’re unlikely to be that lucky over your entire career, and that means there will almost certainly be several times where you make a big mistake that can significantly impact your company, a client, or another stakeholder. It’s a terrible feeling when you find an error like that; anxiety and guilt build, and a pit forms in your stomach.

If mistakes truly are universal, however, they don’t have to ruin or irrevocably harm your career, assuming they were a genuine accident and not a product of malice or negligence. You cannot un-ring the bell and erase the fact that a mistake occurred, but what you do once you uncover the problem is what determines how it impacts your company, your reputation, and your career.

Every situation is unique, and the circumstances of the error and the best way to address it are going to be specific to your position, your company, the project you were working on, and the mistake that was made. There are, however, a few broadly applicable actions you can take that will not only limit negative impacts and reputational harm, but potentially even bolster your reputation and accelerate your future growth.

Confirm There Was a Mistake

First, take a deep breath and avoid the urge to panic. Sometimes it looks like an error was made, but there is an issue with the checks you are using. You may be looking at outdated results from a model, or maybe there’s already a corrected memo that’s saved in another location that you hadn’t noticed.

Before doing anything else, take the time to confirm that there was an actual error. You don’t want to sound the alarm and create a big commotion only to find out that there’s not a real mistake.

Investigate the Mistake and Plan a Solution

Once you’re sure that a mistake was made, you need to understand the full picture of the error and its impact. There are a few major questions you should try to answer, if time permits:

What was the mistake, and how did it happen?

Is there a typo in a report, and liabilities are vastly understated?
Is a model producing erroneous results due to an improper input or a faulty formula?
Mistakes don’t have to be limited to quantitative analysis—did you embarrass a client in front of their superiors by inadvertently implying their team’s assumptions were unreasonable?

It’s important that you can clearly and succinctly describe the overall problem and its cause, both for your own understanding of the issue and to help in communicating with other stakeholders in the future.

What is the impact of the mistake?

For errors in analysis, results, or conclusions, what work products may be incorrect? This will clarify the scope and identify which stakeholders may be impacted.

Are there other results that rely on the affected work product? For example, if there is an issue with an experience study memo:
1. Were faulty results used to support information provided to regulators?
2. Are resulting assumption changes unreasonable?
Is the mistake novel, or has it gone unnoticed for a longer period?
What third parties may have relied on erroneous results?

For model errors like issues with formulas or inputs, identify the specifics of which model outputs are impacted. This will aid in reviewing the updated model results and potentially identify stronger checks to add for the future.

Which values are impacted? E.g., surrender benefits are understated by 5%.
Are there any downstream effects to other results, like understating modeled reserves?
What products are affected? Is it a certain rider or product type? How material is the impacted group relative to aggregate results?

What is the magnitude of the mistake’s impact? The actions to correct a significant error are going to look different from what you might do after a minor misstep.

For qualitative missteps (e.g., embarrassing a client contact), how serious is the problem?
1. Is the result just temporary frustration, or could your whole relationship be endangered?
2. Is a single individual impacted, or was it an entire department that you work with?
3. Is it possible to mitigate the impact somehow? For example, could you follow up with attendees to clarify your comments to reduce the impact of any unintended insults?
For quantitative errors, consider both dollar and percentage changes. A mistake that is minor compared to aggregate results may be significant only to a particular product, which can be an important distinction.

Fully investigating a mistake and understanding its scope completely can take a great deal of time and effort, but this is necessary to ensure that a solution fully addresses all the related issues. If you rush to correct only the direct and obvious impacts, you may leave secondary issues unresolved, which will likely lead to additional complications in the future.

The other benefit of a thorough investigation is additional credibility. Producing a comprehensive analysis of an error’s effects shows a high standard of quality and diligence that can reduce reputational harm from having made the mistake in the first place.

How was the mistake not prevented by existing risk controls?

Part of the solution to correct a mistake should include proposals to reduce the likelihood of a similar problem in the future. To develop those proposals, you need to understand how existing risk controls, including standards like model controls and peer review, failed to prevent the problem.

Generally, the answer to this question is going to fall into two broad categories:

Existing risk controls are insufficient, letting the mistake slip through the cracks. This happens when existing policies were followed properly, but didn’t prevent the mistake. Proposed solutions would likely include new controls or additional checks to be added.
Existing risk controls are adequate but were not properly followed. This could include issues like someone failing to obtain a peer review, or maybe a peer reviewer failing to review at an appropriate level of depth. Whether out of ignorance of policies or complacency, proposed solutions likely involve some sort of education or reinforcement of existing policies and procedures.

Lastly, develop a plan for a solution.

In quantifying the error’s impact, you likely already understand how to correct it, which is a great start. You also need to consider a correction that is appropriate for the mistake. An immaterial typo in a PowerPoint appendix assumption table may not require the huge undertaking of correcting, reviewing, finalizing, and redistributing the whole deck, but errors that have a material impact on the work product almost certainly require decisive action.

Your supervisor or experienced colleagues are good resources for determining the best way forward if you’re not confident in materiality or possible solutions. In the case of mistakes in client interactions, salvaging and repairing the relationship is going to depend heavily on the existing relationship and the nature of the misstep, and may not be as simple as finding a “solution.”

As mentioned previously, part of the solution should also include actions to ensure that a similar mistake is unlikely to happen in the future. If appropriate, consider additional checking measures or risk control procedures, or additional education on existing policies. If you feel the mistake was due to a lack of knowledge or expertise, request additional support or consult actuaries more familiar with the relevant subject matter. Take this opportunity to make improvements and prevent the pain and embarrassment of duplicating the error in the future.

Communicate with Stakeholders

Once you have a sense of what went wrong, its impact, and how you can fix it, inform impacted parties. How quickly you need to inform stakeholders is going to depend on several factors, but it’s generally a good idea to start by reaching out to your supervisor as soon as you’re confident a mistake was made. Don’t look to place blame or point fingers—take responsibility for any errors you personally may have made, explain the actions you’ve taken to investigate, and communicate your plan to prevent similar mistakes in the future.

It’s almost always a good idea to get a deeper peer review of impacts and solutions before sharing updates with external stakeholders or senior management. Making a significant error is bad; making another when trying to fix your original mistake is worse and will further damage your reputation. Make sure that you succeed in rectifying the problem on your first attempt.

When you are preparing to share your findings with your company’s senior management or external stakeholders, be sure to involve any supervisors or client relationship managers in crafting your messaging. The last thing you want is for an impacted party to feel like they are out of the loop during a time that could strain an important relationship or generate additional questions and requests.

As with communicating with your supervisor, be transparent, honest, and direct with senior managers and external stakeholders. Taking ownership of mistakes and making quick and thorough corrections is the best way to build credibility in the way that you will properly handle errors (or any other issues) that come up in the future.

Lastly, make sure to always comply with any relevant laws, regulations, professional codes of conduct, and relevant company policies and risk management practices. Don’t deceive, mislead, or cover up material errors when you find them. Making an honest mistake is understandable and happens to everyone. Willfully acting deceitfully and unethically is a quick way to ruin a career and reputation, and it never ends well.

Follow Through and Show Growth

Even if you handle a mistake perfectly—you investigate and correct the problem, take responsibility, and communicate clearly—it’s only going to buy you goodwill over the long term if you avoid making similar mistakes in the future. These are learning opportunities, and it’s critical that you use those chances to actually grow and develop. Learn from your mistakes, help others learn from your past errors, and you’re going to continue to improve the quality of your work and develop a reputation for honesty and integrity both within and outside of your company.

Statements of fact and opinions expressed herein are those of the individual authors and are not necessarily those of the Society of Actuaries, the editors, or the respective authors’ employers.

Tanner McKerlie, FSA, MAAA, CERA, is a consulting actuary at Milliman, Inc. He can be reached at tanner.mckerlie@milliman.com or via LinkedIn.