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Random Sampler
“May you live in interesting times”
By Roger M. Hayne 

Although often quoted as a curse, the title of this column is music to an actuary’s ears—it reflects our raison d’être. We are skilled at assessing and quantifying the financial effects of uncertainty (“interesting times”). However, we are not immune from risk aversion and often want and need to know what is coming next. In the next few paragraphs we’ll randomly sample some items, not necessarily in the order of importance, that will possibly make the lives of casualty actuaries just a bit more interesting in the near future.   

ERM Designation
The CAS Board has already approved the addition of the first new CAS designation since the formation of our Society 96 years ago. The new designation will recognize special expertise in enterprise risk management (ERM). The Society of Actuaries already has the Chartered Enterprise Risk Analyst or CERA designation and a number of actuarial organizations are working on a treaty for the establishment of a single ERM designation for actuaries. The CAS, through Steve D’Arcy, has been active in designing the syllabus for this global designation, which will present a robust and substantial educational framework for these ERM experts. By the time this column is published, there will likely be a number of associations who will have signed the treaty, including possibly the CAS itself, as well as the SOA. This treaty will mark the first real step the signing organizations will take to jointly promote the actuarial profession worldwide. The designation, to be called either CERA or ERMA (depending on whether or not the SOA signs the treaty), would be issued by all signing associations to signify significant knowledge of ERM. (See story on CERA in this issue.)   

Continuing Education
Qualification standards developed by the American Academy of Actuaries, effective January 1, 2008, significantly expanded the reach of continuing education requirements, as well as the level of such education relative to the standards in place before that time. Those new standards now apply to all actuaries practicing in the United States who issue “statements of actuarial opinion.” Some of our members in the United States do not see their work product as “statements of actuarial opinion” and hence may not satisfy those continuing education requirements. In addition, roughly one in seven CAS members has an address outside of the United States, and as such may not be bound by these standards.   

Recognizing that the CAS is an international organization, the CAS Board has just approved the establishment of continuing education requirements applicable to all CAS members (with limited exceptions to be developed by the Executive Council), not just those practicing in the U.S. who issue “statements of actuarial opinion.”   

A Global CAS
As stated in the previous paragraph, roughly one in seven CAS members has an address outside of the U.S. Many of those residing in foreign countries are U.S. expatriates working there. Asia, though, presents a markedly different picture. A significant portion, if not a majority, of CAS members residing in Asia are themselves from Asia. Although no Asian country as yet has the largest number of CAS members outside the U.S. (Canada holds that distinction), there are a substantial number of CAS candidates with Asian addresses. This means that the Asian population of CAS members is growing rapidly. We are already working to prepare a nation-specific examination for Taiwan to parallel our current Exam 7-U.S. and Exam 7-Canada. With a growing number of our members working outside of the U.S., we will need to be sure we can serve and represent all our members, not just those living in North America.   

Future Education Methods
The actuarial profession maintains educational requirements for admission and requires some sort of verification of that education. Some countries allow this verification to be accomplished through university education. Others, such as the U.S. and Canada, generally require passing timed, written examinations as the only route to verify the majority of the educational content of the syllabus. “Generally” is used here to acknowledge that the CAS and SOA allow alternatives to traditional examinations for some subjects through the “validation by educational experience” or VEE. Other major exam-giving actuarial organizations such as the Faculty of Actuaries and the Institute of Actuaries in the U.K. and the Institute of Actuaries of Australia give credit for many of the early examinations to students who pass particular university courses from select universities with sufficiently high grades. The CAS, SOA, and the Canadian Institute of Actuaries (CIA) are jointly exploring a similar waiver program for select U.S. and Canadian universities.   

The Global Financial Crisis
The current global financial crisis points up the need for a deep and comprehensive understanding of risk and the application of that understanding to identifying and managing risks for an enterprise as a whole. Casualty actuaries, with their broad experience in a very wide variety of hazard risks, many of which are not readily modeled, and their deep understanding of risk and uncertainty, bring a unique set of skills to the table for managing such risks. This understanding not only helps identify and manage enterprise risk, but also helps educate regulators in their roles monitoring the solidity of financial and other institutions.   

Conclusion
All of these items have a common thread—a shrinking world and the unique role CAS members can play in that world. These truly are interesting times. This simply highlights the importance of our Centennial Goal:   

    The CAS will be recognized globally as a leading resource in educating casualty actuaries and conducting research in casualty actuarial science. CAS members will advance their expertise in pricing, reserving, and capital modeling, and leverage their skills in risk analysis to become recognized as experts in the evaluation of enterprise risks, particularly for the property and casualty insurance industry.

Roger M. Hayne is CAS president-elect.

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