The following is taken from Jessica Leong’s presidential address given at the 2021 CAS Annual Meeting in San Diego last November.
Do you want to be the “actuary of the future?”
What does that even mean?
Last year we made an important change to the CAS Envisioned Future. The envisioned future used to say that the CAS would “advance the practice and application of casualty actuarial science.” Now, the envisioned future says that our members are “sought after globally for their insights and ability to apply analytics to solve insurance and risk management problems.”
This was a big change — and it wasn’t just semantics.
Let us take the old Envisioned Future that talks about the “practice and application of actuarial science.” Hands up if you have applied casualty actuarial science in your job?
[Much of the audience reacts with a show of hands.]
Ok. Good. That’s pretty much everybody.
Now, let’s take “applying analytics to solve insurance and risk management problems.” Have a think . . . in your job, think of a time when the business came to you with a problem, and you were able to apply analytics to get some insight, and then worked proactively with the business to solve their business outcome and got a good result for the business.
So, it might go like this: The business had a profitability issue and you applied actuarial science to estimate and understand the drivers of their loss ratio. Based on your insights, you then worked with the underwriters to craft and execute on a strategy to improve their loss ratio — perhaps they cut a part of their book, or they targeted a new profitable area, and their loss ratio is now showing 2 to 3 points of improvement.
The story ends in a positive business result.
Now, hands up: Who can tell a story like that?
[The audience reacts with a smaller show of hands.]
Ok. So, we have some of you but not all of you who can tell this story.
We are all applying actuarial science in our jobs, but not everyone here can share a story where they have solved a business problem that results in business impact.
Solving business problems is hard. That is why the CAS Board very deliberately focused our vision of the actuary of the future on solving business problems.
Many actuaries feel that it’s enough to do high-quality analytics and effectively communicate the results. But the actuary of the future takes the next steps and helps the business act on those results.
Some actuaries think of themselves as umpires keeping score. But the actuary of the future thinks of themselves as a valuable member of the team.
So, if you want to be the actuary of the future, I issue a challenge to you: Make a pledge that, before the next CAS Annual Meeting, you are going to solve a new business problem.
You will have a story that you can tell, in which you have applied analytics that has a significant business impact. And I’ll find you at that next Annual Meeting and get that story from you.
So, I ask again: Do you want to be the actuary of the future?
If you do, then be proactive and make that pledge!
CAS Immediate Past President Jessica Leong, FCAS, chairs the CAS Board of Directors. She is lead data scientist for Zurich North America in Chicago.
