The CAS has expanded its scope from workers’ compensation to every non-life line of business. We, the CAS, are now involved in insurance and other risk management alternatives to insurance. Self-insured programs, captives, risk retention groups, catastrophe bonds and more are now within the purview of the casualty actuary. Our visibility and presence at the recent RIMS convention was quite evident of that fact.
We have expanded our geographic scope, from an almost exclusively USA/Canadian society to an international one. An effort to expand the ethnic diversity of our organization is now an official focus of the CAS. We are growing well beyond our roots.
Actuary has been one of the top professions for so long that now we have an unprecedented number of new entrants into the field, and more universities are establishing actuarial degrees every year. But how long before the supply of actuaries outstrips the need? It doesn’t have to if we expand the demand for actuaries faster than the supply grows.
We need to further expand the scope of our operations, but in what arenas? Following are a few ideas.
Supply Lines
Take, for example, electrical transmissions. What can prior power outages tell us about the likelihood of additional outages in the future? Can we use our skills to help other industries determine the most effective expenditure of time and money on maintenance and loss prevention? Transmission line age, probability of high winds, variations in electrical usage, age of transformers and more could be used as “classifications” to “rate” the likelihood of future losses. These classifications could also enable the electrical company to minimize outages by retrofitting the components most likely to fail or to fail with the greatest damage. This is an insurance hazard rating of a different nature and could apply to water companies and petroleum pipelines as well.
Logistics
We are skilled with handling hazard risk, but what about such risks relating to the on-time delivery of goods? Train and ship wrecks, truck accidents or breakdowns, and other disruptions occur to varying degrees. I once heard of some actuaries going to work for a trucking firm; I wonder if that story is true and, if so, how it’s working out. Our directory lists some actuaries working in “nontraditional” roles, and I applaud them. Should casualty actuaries be the “professional of choice” in that important activity? Can we use our understanding of risk classification, including the potential for severities, to reduce the risk for those services?
We need not limit our thinking to hazard events. I have heard of actuaries going to work for investment firms and other asset management organizations. That is great, but I wish we saw more of it. Are there other related financial services roles we can play?
“The best way to manage your market is to create it.”*
These are just a couple of my ideas. I would like to hear from readers to correct and complete this “starter list.” In my opinion, it is time we expanded our professional activities even more so than we have in the past. We need to create new markets. My future doesn’t depend on it, but yours might.
Postscript
I attended a Michigan Actuarial Society meeting, where Craig Reynolds, president of the SOA, was the speaker. He spoke of the SOA’s entry into the “general insurance” space, why they were doing it, and their progress to date, which he described as “slow but well.” He also mentioned the SOA’s strategy to enter other areas of practice. Their recent emphasis on predictive analytics is one avenue they seek to use to involve their members in non-insurance activities. Last year, the SOA paid for two college interns to work for two non-insurance companies at no charge to the companies. This year they plan to have six to nine interns in similar situations. The SOA is putting their money into the process of expanding their scope.
They are concerned that the increasing volume of college graduates with actuarial degrees is flooding the market, and the SOA is trying to increase its market scope.
* My variation of the Peter Drucker quote, “The best way to predict the future is to create it.”
