The flow of the river of opportunity does not always follow the same course as it has in the past. Currents change, and rapids can either push you ahead or swamp you. In contrast, the lakes of comfort seldom flow at all, and the course of opportunity is dictated by the winds and the power of your vessel.
Should we stay on our lakes of comfort and familiarity or venture onto the rivers that flow to the ocean? The journey on the rivers of opportunity will not be easy. It will present new challenges and require new skills. Fortunately, we have a number of colleagues who have already traveled some of those waterways.
Why Chart a New Course Now?
Actuaries are well respected by many insurance business leaders around the world. However, we are now hearing from several business leaders that actuaries are seen as lagging behind in learning and adapting to the emerging skill sets in analytics and data science. These skill sets are becoming increasingly important to many business decisions. Some believe that insurance analytics talent requires expertise beyond actuarial training, a belief driven by business executives who have successfully engaged experts in statistics, economics, and behavioral and data science to provide valuable insights for business decisions. The message from industry business leaders seems clear: They recognize and value specialists able to work on multidisciplinary technical teams.
However, merging expertise within a team of diverse specialists is not part of a typical career path for actuaries. For some actuaries, their actuarial qualification is the defining boundary of their expertise. That view, though, can be a challenge for the growth and influence of our profession. Our influence depends not only on what can be included within the bounds of our education, but also on our training in how to combine our expertise with that of other specialists.
We have proven our value in specific industry functions where our skills have been long established — insurance, self-insurance and risk management programs — but we have had limited recognition for our skills and training beyond these traditional realms. While data science and analytics have exploded in popularity and are driving innovation, they have also clearly disrupted some of our traditional areas of practice. But this disruption now presents unique opportunities for our profession — and some threats.
Should the CAS take the route less traveled by other actuarial organizations? This course is bound to have currents, rapids, obstacles and other challenges not previously encountered. The CAS will need our members to lead and support the efforts to broaden and adapt the skill sets of actuaries and encourage others with complementary skills to join our journey. Meeting the needs of business leaders is our ambition; it is those business needs that are signaling a change in course.
Our enthusiasm for being the gold standard in our field should also drive us to chart a new course aimed at expanding our boundaries.
What If We Stay the Current Course?
Adopting new technical skills is not revolutionary, but the normal process of such change is slow and incremental. Actuarial practice is currently viewed by many insurance executives as having entrenched concepts and methods that can be major obstacles compared to the rapid development of other professional education for specialists in analytics, data science and behavioral economics. At a seminar on insurance analytics a few months ago, Mike Angelina, ACAS, MAAA, CERA, asked a presenter, “Why aren’t insurance executives going to their actuaries for insurance analytics?” The presenter responded that the actuarial profession may not be completely out of the picture, but it has a lot of catching up to do.
We see a growing proliferation of analytics courses, university certificate programs, analytics software certifications and post graduate degrees being offered. Actuaries, both those credentialed and those still taking our exams, are increasingly attracted to such programs. While the actuarial profession evaluates, debates and develops the changes to our actuarial education process, others are taking those opportunities and bypassing our profession.
Do we want to be valued only for those skills that our actuarial exams cover? Will business leaders be convinced that the actuarial domain is flexible enough to adapt to the insights of behavioral economics and predictive analytics? Are actuarial education and practice flexible and adaptable enough to create credible experts in the application of these concepts and methods?
The challenge we face as a profession is how to respond to this expansion of talent in analytics and data science and still expand the value of the skills that our credentials represent. More importantly, how can we turn this challenge into an opportunity? For example, what can we learn from our experiences in developing the CERA credential, from the new Certified Actuarial Analyst credential developed by the U.K.’s Institute and Faculty of Actuaries, and from the ASPPA pension actuaries who have joined up with other employee benefit and retirement plan professionals?
While the actuarial profession evaluates, debates and develops the changes to our actuarial education process, others are taking those opportunities
and bypassing our profession.
There are many CAS members and candidates whose practical skills are quite valuable to the analytics needs of many of our employers; many job listings are posted looking for a combination of actuarial and analytics skills. However, adding to the overall educational load for actuarial qualifications would certainly slow our progress through or around the rapids or may cause us to throw overboard many important topics from our actuarial curriculum.
Scouting out the New Course
“The best of the best are always focused on reinventing,” was the innovation message delivered by Josh Linkner, CEO and managing partner of Detroit Venture Partners, at a recent convention of the American Society of Association Executives. One of Linkner’s five “obsessions” of innovative thinkers is envisioning how a brand-new startup would try to gain traction in your market. Another obsession of innovators is pushing their boundaries — genuine disruption comes from more than incremental change, according to Linkner. So scouting out our new course will focus on how we can reinvent ourselves and where we should look to push our boundaries.
Innovation and reinvention can provide us with a fresh approach to these new threats and opportunities. This approach will take a commitment to break away from our conventional educational pathway and attract those who bring the new skills.
As I mentioned in my President’s Message in the last issue of AR, this is time to build upon our current alliances, form new ones and expand our sphere of influence. Our vision must be clear: “Be a world-class collaborator, especially beyond our traditional actuarial boundaries.” We must embrace these new business demands and enable actuaries to be a part of a multidisciplinary approach to professional education.
In fact, we have already begun to explore what such educational pathways might look like — pathways for more integration of those with actuarial skills with those from other disciplines. We are also seeking established organizations with mutually beneficial goals who are interested in forming strategic alliances to help us navigate our new course and accelerate our progress.
Our new course should include options for alternative professional career paths — including a pathway for those who wish to follow a similar direction of many actuaries, as well as alternate routes for those who are looking for a focus on specialized areas where analytics, data science and other quantitative skills can be combined with actuarial skills. The design of alternative pathways should also include the achievement of professional education and competency to recognize a specialist’s expertise.
Preparing for the New Course
The CAS already has the basic infrastructure to offer our credentials, continuing professional education and professionalism. Through that infrastructure, we can expand our operating model and address the current and future business needs important to our members and the organizations they serve. The new course will also enable us to enter much larger territories where qualified professional specialists in analytics are needed and where many actuaries are very interested in staking claims.
Now is the time to chart a new course for the CAS and our profession. The CAS leadership has been very busy this year working on such a new course, laying a foundation to take us from an exclusive club of actuaries to a more inclusive and diverse professional organization. Extensive preparations are being made for our expedition. The journey should be an exciting one. So get ready to pack your gear for a ride down the river.
The details of our plans are still under development. To be continued….
