May 09, 2023

“MoneyBall for FP&A”: Maura Feddersen on Winning in Forecasts

49 minutes

Maura Feddersen, behavioral research manager at Swiss Re, is an economist who previously worked in the economics team of two of the Big Four Accountancy firms: PwC and KPMG.

She got switched on to behavioral economics as “I always felt there was something a bit missing in economics. [Economics] assumes that people act quite rationally…and that was just not the case. Behavioral economics brings together the economics, as well as insights from psychology, to try to assess how humans really make decisions”.

This fascinating episode with Maura, uncovers the lessons that FP&A teams can learn from behavioral economics to improve forecasting and the power of “knowing what knowing what you don’t know.”

This episode includes

New research revealing that investors predictions are only slightly more accurate than a chimp

How new forecasting methods improved accuracy at Swiss Re by 5%

The cognitive biases we need to be aware of that undermine accuracy (such as the dangers of groupthink)

Meryl Streep’s Oscar nominations and your forecast confidence levels tested

How to try and manage cognitive bias

The true economic impact of uncertainty in the global economy and in your business

The opportunities and limits of AI forecasting

Using RIO (Rational Impartial Observers)

The biggest failure in her career

Favorite Excel function

Her biggest advice for someone starting out to get really good at forecasting

Further reading

Actuaries magazine: So You Think You Can Underwrite [Maura Fedderson]

Insurers, take heed of these 3 common forecasting fallacies [by Maura Feddersen]

Recommended books

Superforecasting: The Art and Science of Prediction Paperback - Philip Tetlock, Dan Gardner

Nassim Taleb, The Black Swan, the Impact of the Highly Improbable

Annie Duke, How to decide

Adam Grant, Think Again, The Power of Knowing what you Don’t Know

Daniel Kahneman, Olivier Sibony, Cass R. Sunstein, Noise: A Flaw in Human Judgment

Read the full transcript and blog

Follow Maura Fedderson on LinkedIn

YouTube video

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FP&A Today is brought to you by Datarails.

Datarails is the financial planning and analysis platform that automates data consolidation, reporting and planning, while enabling finance teams to continue using their own Excel spreadsheets and financial models.

Get in touch at www.datarails.com

For AFP FP&A Continuing Education credit please complete the course via the Earmark Ap, must pass the quiz with 80% accuracy and send the completed certificate to [email protected] for issuance of 1 hour of credit toward your AFP FP&A Certification.

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By Glenn Hopper