Corporate Actuary Versus Consultant — A Comparison

If you read the “Comings and Goings” column, you may have noticed that I have a new job. This time, I went from a corporate environment to a consulting firm.

Upon reflecting on the differences between corporate life and consulting life, I wanted to share my thoughts with you. For those of you who have only worked in one setting, this will give you some insight into what the other side is all about. When I took my first job as an actuarial assistant in a company, I used to wonder what it would be like to be a consultant.

This is the second time I have been employed as a consultant. Some things have changed, others have not. The majority of my years in the profession have been at companies, except for a few years at the Insurance Services Office.

Project Focus Versus Process Focus

Work is more projects-focused at a consulting firm — get the task completed and delivered to the client. Timeliness and presentation are vital.

At a company, things are more process-focused. There are projects, but most of the work is repetitive (quarterly loss reserves, annual rate review for a line/state, etc.), and so the process of getting it done is important. Time spent today to streamline the process will pay returns the next time you, or someone else in the department, does the task. Since the amount of work often exceeds the current workforce capacity, this investment is usually worthwhile. Timeliness and presentation are still important, but many corporate actuaries do not give these two aspects of the product the necessary attention.

Documentation

The documentation is different for a client than the documentation you do as a corporate actuary. Both need to be clear, concise, comprehensive and correct. (The 4 Cs on documenting.) Both need to be in compliance with professional standards. But there is a slightly different twist to each.

In a corporate setting, you are usually available to answer questions. Certain terms that have company-specific meanings are understood by both the corporate actuary and others within the organization to have that same meaning.  You might not have to create a glossary for the reader, since all the recipients have the same definitions of the terms involved. Oftentimes, the documentation for a given analysis, as well as its report, is simply kept up-to-date rather than re-invented and re-published at each successive update.

Since someone else in the department might be updating the work the next time it is refreshed, the documentation, at a minimum, needs to be sufficient to enable another person to do it. If not, it needs to be documented sufficiently so that someone else in the department can do it.

While corporate actuaries usually work in the same physical location as the recipients of their work, consultants are usually not local to the client; therefore, a consultant’s work needs to speak for itself. There are some controls on whom may see and use a consultant’s report, and it is usually within the confines of the client company. But the report can be copied multiple times for multiple readers, many of whom will not be a part of the original work group or project team.

As a consultant, you likely will not be present when your work is reviewed by the client, so it needs to be clear, concise and well-documented.

A consultant will likely need to create a glossary for the client, so that the client knows how the consultant interpreted the data and data elements. The report needs to be conveyed in a manner where both the analysis and the audience have the same definitions of the terms involved.

Travel

The amount of travel depends more on the organization than whether it is a company or consulting practice. But both as a corporate actuary and a consultant, I found that travel tended to be uneven: a lot for a while, then no travel at all for a while. It doesn’t seem to be evenly distributed throughout the year or even evenly distributed year to year.

Scheduling and Deadlines

You do not control deadlines in either position, but since company work tends to be more process-oriented, scheduling and deadlines tend to be more predictable. Consulting deadlines are set by the client.

People With Whom You Network

In a corporate setting, the network is more contained and relations tend to last as long as you remain with that company. You see the people with whom you work, and for whom you do the work, nearly every day.

In a consulting environment, you are more likely to deal with a rather wide group of clients you likely do not know as well as you know your coworkers. Since much client work is project based, you don’t interact with them as often as you would a coworker in a corporate setting.

Data

I forgot how difficult data was for a consultant until I went back to work as one. A consultant has to use what data the client provides, which is often incomplete and without clear definitions.

Since much of the consulting work is project based and many times the projects are one-time events, there seems to be no incentive for the client to put the data in a format better used by the consultant. (Although the client who asks the consultant “What data do you need and how do you want it?” will have lower consulting bills, since the consultants will be more efficient and thus bill less.)

On the other hand, the corporate actuaries usually have much more control of how they get their data, if not initially, then eventually.

Keeping Track of Your Time

Many of the articles and books on time management tell us to keep a detailed log of what you do and your start and stop times for those tasks. One company I worked for kept track of all of the work through work logs. See “Should We Be Agile?” Actuarial Review, August 2012.

In that corporate setting, the work log really helped with workload analysis. It also helped me and others realize just how little time is available to do “actuarial work.” Take out the time spent in meetings, fighting fires, answering other people’s questions, etc., etc., and see just how much time you have left to do “your work.” You will be shocked. Years ago when I went from consulting to a corporate position, I was surprised to find out just how little time I had to do “my work.”  Meetings and supervisory responsibilities absorbed a large proportion of my workday.

Take out the time spent in meetings, fighting fires, answering other people’s questions, etc., etc., and see just how much time you have left to do “your work.” You will be shocked.

 

As a consultant, you are forced to keep track of your time. I recommend that you do that occasionally as a corporate or governmental employee. You might be surprised at what you learn about how you are spending your time.

Peer Review

As chief actuary in several corporate settings, I had trouble getting others to understand the value of peer review. Usually, the issue was with senior management, who would ask “Why can’t you do it right the first time?” or “Why not have everyone check their own work?” The actuaries I worked with understood the need for peer review, as do the ones I work with now. Fortunately, in a consulting environment, peer review is almost second nature. Peer reviews ensure correctness, of both accuracy and presentation, which is vital for a consultant.

I have enjoyed working in both environments and hope I have given you some insight into some of the differences. Probably the biggest difference is the variety that consulting offers over a corporate setting.