Future Fellows - June 2008
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Seasoned Actuaries Offer Advice
By Yvonne Palm, Candidate Representative to the Candidate Liaison Committee

So here you are. You have graduated from college, passed a few exams, and landed that dream job as a casualty actuary. Your whole career is ahead of you. But how do you get from being that inexperienced college graduate, fumbling over your numbers, to becoming that chief actuary, senior manager, partner, or practice leader? Sometimes even the stellar newcomer finds it hard to know what to do—what skills to focus on, what areas of the field are important, or what path to take when it comes to developing and shaping a career.

I had the opportunity to ask four “seasoned actuaries” for advice to actuarial candidates at the beginning of their careers. The “seasoned” panel consisted of Amy Bouska, John Gibson, David Hartman, and Antoine Neghaiwi. Among the four of them, they have about 120 years of experience and have worked in various capacities in consulting and insurance.   They have held chief actuary, practice leader, and management positions, and have written a paper or two. If you are a true believer in learning from other people’s experiences, this advice is priceless!

Ms. Bouska has worked in the insurance and consulting arenas in the U.S. and Bermuda, with experience in the London market. While in insurance, she worked in various positions and headed a commercial actuarial department; in consulting, she specialized in mass torts and went into management. She is now retired from full-time work and volunteers for the profession through various organizations. Mr. Gibson has worked for many years in insurance and consulting and has pricing and reserving experience. He is currently a principal and practice leader at a major consulting firm. Mr. Hartman has worked full time in insurance for 39 years, focusing mainly on loss reserving, and was a chief actuary for 25 of those years. Mr. Hartman has also retired from full-time work and volunteers for the profession. Mr. Neghaiwi has vast amounts of experience in pricing, reserving, capital allocation, and risk modeling in both the U.S. and Europe. He is currently the global chief pricing actuary and the local chief actuary for pricing, reserving, capital allocation, and modeling at a hub of an international reinsurance company.   


Breathe Easy—The Future is Bright
Be reassured that you made a good decision choosing a career as a casualty actuary. All four of our seasoned actuaries agreed that the outlook of the property/casualty actuarial career is very positive. Mr. Gibson declared that being an actuary “is still the best job in America.” Mr. Neghaiwi said that he was “proud and grateful to be a member of such a professional organization.” He emphasized that the outlook was good, especially internationally, as he saw more actuaries stepping into more managerial roles. Ms. Bouska added that the FCAS designation is gaining recognition internationally, concurring with Mr. Neghaiwi that we should be seeing growing opportunities for CAS actuaries internationally. Mr. Hartman agreed that the demand for the FCAS is continually growing, though his emphasis was for jobs outside of insurance companies. Citing a trend consistent with most other fields in the U.S., Ms. Bouska expects that the profession will be affected by the number of baby boomers who are about to retire. She commented, however, that the effect should be mitigated as the big growth in the CAS came post-baby-boomer in the late 1980s and early 1990s. So, it is likely that this group of people will still be working when the baby boomers retire.

Looking Outward
As for future changes in the profession, Mr. Neghaiwi believes that actuaries will need to be more mindful of the global economy with respect to internationalism, especially in reinsurance and corporate business. He suggested that actuaries be very familiar with the legal claim environment and accounting rules, such as the International Financial Reporting Standards and Solvency II. He also suggested focusing more on enterprise risk management (ERM) and insurance mechanisms such as insurance-linked securities. In fact, all of our seasoned actuaries agreed that we are seeing—and will continue to see—a movement of more actuaries into nontraditional actuarial roles such as risk management and finance. Mr. Gibson noted, however, that these roles will only be filled by actuaries who can grow beyond their designation and break free of the perceptions of others who think that actuaries can only do a limited number of things like reserving and pricing. Ms. Bouska added that the movement is actually dependent on individual actuaries being willing to take the risk of going into a new area. “We are risk professionals, right?” she said.

Essential Explorations
Our seasoned actuaries agreed that modeling in general is becoming an area of high demand. Candidates should consider exploring catastrophe, capital, and predictive modeling as well as ERM. Important areas to explore on the pricing side include generalized linear modeling, data mining, and pricing optimization that considers demand elasticity. Our panel underscored the need for actuaries to understand how to build, work with, interpret, and communicate the results of models, which are much more intricate and possibly less intuitively obvious than the “classical triangle approaches.” Mr. Hartman stressed, however, that at the beginning of your career, you should get a strong grounding on the basics before branching out into more sophisticated or specialized fields.

Generalist vs. Specialist
Here’s a question that may unsettle many actuaries just starting their careers—should you be a “generalist” and be able to face a broad range of issues at a high level or a “specialist” and focus on one or two specific areas of practice? Most of our seasoned actuaries maintained that it is a function of your personality and preference. Mr. Gibson suggested that the actuary is a generalist by way of training, as the exams test a broad range of topics. He proposed that a logical progression would be for an actuarial candidate to be exposed to a variety of practice areas before focusing on one specialty area. Ms. Bouska pointed out that whether you become a generalist or a specialist is partly a function of where you work. Actuaries at large consultancies tend to become specialists over time because that gives them a higher profile in the marketplace; chief actuaries at insurance companies are very successful generalists.      
Climbing Ladder

What Do We Bring to the Table?
To give newcomers a little bit of a boost, I asked the seasoned actuaries to identify the most valuable skills or dynamics that less experienced actuaries contribute to a team. According to Mr. Hartman, newer actuaries seem to have a better grasp on the subjects and skills required for predictive modeling than more experienced actuaries. Mr. Neghaiwi said that he benefits greatly from the extensive level of knowledge of higher mathematics and statistics that some of the candidates bring with them. Mr. Gibson stated that someone adds value to a team by developing a point of view and having the courage to share it. Ms. Bouska indicated the importance of newer team members is that they tend to ask the basic questions that sometimes have been overlooked, or need additional explanation.

In reviewing all our seasoned actuaries’ responses, communication was the one skill set mentioned again and again as being essential to success. All agreed that what separates a good actuary from a great actuary is the ability to communicate. Ms. Bouska said that while actuaries may have undervalued communication skills in the past, as the models we develop become more intricate, both oral and written skills will become more and more important as we explain our processes and results to clients and management. Mr. Hartman put it simply: “You can be technically proficient in some area, but if you cannot explain it to someone else, it is virtually worthless.”

Ms. Bouska and Mr. Hartman also highly recommended volunteering for the profession as it will give you exposure and opportunities to meet interesting people, do challenging things, and make good friends. Most importantly, it can give you a great platform to learn to write coherently and speak effectively.   

Ask the Seasoned Actuaries
“What advice can you give to actuaries beginning their careers that helped you in your own career?”

Mr. Hartman: Finish your exams as soon as possible and work in as many different actuarial fields as possible. But most importantly, don’t get discouraged if you do not pass an exam on your first try.
Mr. Neghaiwi: Gain experience in more technical methods early in your career as this is the stage in your career when you have the time to learn new techniques in more depth.
Ms. Bouska: Work overseas for a couple of years, especially at the beginning of your career. This will expose you to different perspectives and will be personally and professionally interesting and rewarding.
Mr. Gibson: There are two ways to get things done: (1) tell people what they are to do regardless of what they think or (2) include the views of others and get the job done together. The second way takes longer, but is almost always better.

   



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