Actuaries are known for their analytical expertise and quantitative acumen, but in today’s dynamic professional landscape, their ability to communicate effectively is equally vital. As the complexity of data and risk grows, actuaries face increasing demands to convey nuanced insights to diverse audiences, often comprising nonspecialists. The 2024 CAS Annual Meeting presentation “Winning the Communication Battle” shed light on the critical communication challenges actuaries encounter and the strategies they employ to overcome them. It also emphasized how their adherence to the Actuarial Code of Professional Conduct supports them in managing these challenges. The presentation was provided by CAS Fellows Melissa Huenefeldt, Carl Ashenbrenner and Kathleen Odomirok and CAS Associate Zach Suter. Huenefeldt and Suter are both members of the Professional Education Working Group.
Breaking down communication challenges
One of the primary hurdles for actuaries is distilling technical findings into clear, actionable insights for audiences that may lack specialized actuarial knowledge. This challenge is amplified when delivering sensitive or unfavorable results, which can be met with resistance or require immediate response. Communication obstacles also arise from the complexity inherent in actuarial work, including presenting uncertain projections and explaining assumptions or methodologies that could impact stakeholders’ decisions.
Using plain language without compromising accuracy
To address these challenges, actuaries make clarity a priority by simplifying language, avoiding jargon and tailoring explanations to meet the audience’s needs. According to the presentation, effective communication involves “knowing the key messages and focusing on getting these across” by employing plain language and summarizing findings upfront. With these strategies actuaries can present complex analyses without overwhelming the listener, a skill particularly valuable when meeting with executives or clients who need rapid, high-level insights.
Communicating bad news with professional integrity
Delivering unfavorable news is another significant challenge. Actuarial analyses often encompass a range of possible outcomes, and when results indicate financial losses or increased risks, actuaries must approach communication delicately yet directly. The presentation emphasized acknowledging uncertainty and discussing the range of potential outcomes upfront, allowing the audience to understand the full scope and implications of the analysis.
Moreover, the approach to delivering bad news is strengthened by professionalism and empathy. Actuaries are encouraged to stay calm, listen to concerns and propose constructive next steps. This method reassures clients that, while the analysis may not yield desired results, the actuary remains committed to helping them navigate solutions.
Overcoming confrontation and building trust
Actuaries sometimes face pushback or skepticism from clients, especially when findings contradict a client’s expectations or internal assessments. For instance, in a vignette shared in the presentation, an independent appointed actuary faces pressure from a company’s chief actuary and CFO to revise a preliminary reserve estimate. Even after carefully considering the claims and underwriting changes that the company has made, the appointed actuary still does not find sufficient evidence in the data to adjust her estimates to the extent the chief actuary and CFO expected. The actuary’s responsibility in this scenario is not just technical but ethical, as she must uphold her professional standards despite external pressures.
In such cases, the CAS’s Code of Professional Conduct provides a foundation. Precept 1, which calls for actuaries to act with integrity and competence, is especially relevant. By adhering to this precept, actuaries ensure that their work aligns with professional and ethical guidelines, which can be invaluable in contentious situations. When faced with confrontation, actuaries often rely on their technical rigor and the documentation of their process, as outlined in ASOP 41, which specifies that actuaries must document and disclose their analysis thoroughly to maintain transparency and trust. By the conclusion of the vignette, the appointed actuary was able to clearly and objectively explain the reasoning for her decisions. While her clients were still disappointed, they could not argue with the facts and were able to accept the decision.
Navigating professionalism standards as a guide
The actuarial profession is supported by a set of established standards that reinforce both communication and ethical responsibilities. Key provisions, as paraphrased below, within the Code of Professional Conduct1 address these issues directly:
Precept 3 explains that actuaries must ensure that their work meets applicable standards, reinforcing their commitment to accuracy and reliability. Precept 4 notes that actuaries are obligated to make their communications clear, appropriate and suited to the intended audience. This ensures stakeholders can make well-informed decisions based on the actuarial analysis. Precept 8 spells out that actuaries must avoid misleading clients and present information fairly, a vital guideline when presenting complex analyses to prevent misinterpretation. These standards provide actuaries with an ethical framework that enhances their credibility and bolsters their commitment to clarity and integrity.
Developing essential communication skills
The CAS presentation offered practical advice for improving communication skills, such as rehearsing presentations, seeking feedback and engaging in public speaking opportunities. Additionally, the presenters highlighted mentorship as a means for actuaries to develop and refine these skills, learning from more experienced colleagues who have navigated similar situations.
In summary, actuaries today face a blend of technical and communication challenges that require both analytical prowess and the ability to convey complex information clearly and ethically. By adhering to the Actuarial Code of Professional Conduct and honing communication skills, actuaries can effectively bridge the gap between technical analysis and practical insight, maintaining trust and integrity in every client interaction.
Sarah Sapp is the CAS Editorial/Production Manager. Erin Olson, FCAS, is the lead actuary in auto pricing modernization at USAA and is the CAS VP-Engagement.
1 ASOP 39 provides examples from Hurricane Andrew in 1992 and the Northridge earthquake of 1994, which “clearly demonstrated the limitations of relying exclusively on historical insurance data in estimating the financial impact of potential future events.”
