The State of the Market- Part Two

by Arthur J. Schwartz

To assess the state of the employment market for actuaries, The AR recently held a round-table discussion with a number of prominent recruiters. Our panel includes:

K.C. Cho, from D.W. Simpson, in Chicago. His firm specializes in placing actuaries in all disciplines, including property and casualty, life, health, pension, investments, and nontraditional roles.

Margaret Resce Milkint, from Jacobson Associates in Chicago. Her firm places all types of specialties for insurers; actuaries, of course, but also underwriters and claims specialists.

Milt Dossin, from Nationwide Actuarial Search in Las Vegas. His firm specializes in placing casualty actuaries only.

Everyone spoke from the perspective of CAS members and students only.

Schwartz: Let's talk about nontraditional positions. Is this area growing? How would an actuary best prepare for these positions?

Dossin: Yes, nontraditional opportunities are growing but it's still relatively small in relation to traditional roles. Most actuaries are still in traditional pricing and reserving positions. If you're interested, when starting out, it is best to get grounded in the basics of pricing and reserving, then you can be in a better position to branch out.

Milkint: If you start with a solid platform, you can use it and build on it. Among the three of us, nontraditional is a catch phrase, it needs some help being defined. So for how you prepare for this, you start by learning the fundamentals of actuarial science. Become well-rounded in management skills like communication, presentation, and project management. These are very critical in the nontraditional area.

Cho: It's not always necessary to start out in a traditional path. If, relatively early on in your career, you get an opportunity to pursue a nontraditional position, you may want to take advantage. The definition of what is nontraditional is evolving. The definition from three-to-five years ago is different from today. Back then, finite risk, catastrophe modeling, DFA, and alternative risk transfers, would have been considered nontraditional. Now they have become more and more mainstream. However, there is a distinction between "nontraditional" and "nonactuarial." For example, we're seeing more positions for personal lines actuaries in roles that once would've been reserved exclusively for an underwriter or a claims person, like product management. Previously, companies were reluctant to hire actuaries for these roles; now they see how an actuary can better leverage their skills. You can pursue these opportunities both internally (rotations, different departments/divisions, sister companies, etc.) or perhaps externally. If you have had exposure beyond a primary insurance environment, like a reinsurer, a broker, or a consulting firm, you are able to bring a broader perspective to the table. Candidates with more diverse experience may be more attractive to potential employers versus those with only personal lines pricing experience in their background. Ultimately, having a broader and more diverse background may equate to higher compensation packages.

Milkint: It's important to keep that distinction in mind, "nontraditional" versus "nonactuarial." Being a chief underwriter is bit of both. You are using your actuarial knowledge as a platform, and bringing in your big picture skills. Actuaries can do a much more in-depth analysis of an issue. They have a richer perspective. To some extent, a nontraditional role requires actuaries to market themselves more aggressively. "I can do that" has to be their attitude, because they may be competing for a position with JDs or MBAs. Try to segue into this in your own company first.

Dossin: It's easier to look for opportunities in your own company.

Cho: Opportunities may not exist within your own organization, depending on the company. You may need to seek a different employer.

Milkint: A new employer means a fresh start, and their people will look at you with fresh eyes. They can see how you can add value in this new role.

Schwartz: Let's talk about international opportunities. Is this area growing? Does it help to be bilingual? What countries are most interested in hiring CAS members? How do the salaries and cost of living compare to the U.S.? Also, how hard is it for foreign actuaries to be hired in the U.S.?

Dossin: International positions are growing but again, like nontraditional roles, it's relatively small. About 150 CAS members (FCAS and ACAS) are employed outside of North America. Because it's a smaller group, it's also growing faster. Being bilingual helps. The countries with the largest numbers of CAS members are Bermuda, Switzerland, and England. Salaries generally are about the same, but the cost of living outside the U.S. is often higher. In addition to salaries, many employers will pay housing allowances to make up for the difference. From an employer's perspective, it can be expensive to hire someone from abroad.

Milkint: For many employers, it can be costly. They may offer a housing allowance; trips to stateside; and pay for a driver, household help, and school allowance. Salary alone is not the key thing in attracting someone; it's the whole compensation package. The cost of living abroad can be much higher in certain places: in Bermuda, a gallon of milk can sell for $10! Also you have to think about whether you want to raise a family abroad. However, companies who want you, know that they have to be competitive; they want to make you whole.

Dossin: The cost to an employer, beyond a salary, can be significant.

Cho: An increasing number of U.S.-based actuaries want to pursue international opportunities now. Although the percentage of ex-pats may be down, the compensation packages remain attractive. For example, in the Far East, employers are discovering that they need to be extremely competitive in order to attract actuaries with U.S. experience and training. The volume of interest in international opportunities from the candidate side is much greater than four or five years ago. For example, the number of Fellows in Bermuda is actually about half that in the entire Canadian province of Ontario. In Southeast Asia and Latin America, the SOA actuaries are far ahead of CAS actuaries. Being bilingual and knowing the local customs of the country certainly helps. Having the actuarial designation and the right type experience can be more important than being bilingual. People who go abroad assume greater risks. They see this as a career advancement strategy and are willing to make more sacrifices or compromises. Also, for a foreign actuary coming here, it's slowly becoming easier. The lowering of the barriers of entry reflects the current U.S. job market, which has a tremendous demand for actuaries, and the willingness of foreign candidates to be more accessible. Some candidates are even willing to incur the travel costs to interview.

Dossin: For Canadians, coming here is easy and vice versa. The 1991 U.S. and Canada Fair Trade Agreement made it easier for goods and services to cross the border. The result has been far more Canadian actuaries coming here. It's not as easy for actuaries from other countries. It's harder to get a visa.

Milkint: The H-1B visa issue is hard to overcome. We see more actuaries coming in to the U.S. from Canada, and not as many from Mexico. The Canadian actuaries have enriched the U.S. market. They are well schooled. Due to the fall in high tech stocks, more H-1B visas may be available for foreign actuaries. It's my understanding these visas are allocated by country.

Dossin: It's easier for a Canadian actuary to work anywhere in the U.K.'s commonwealth than in the U.S. Years ago there were very few casualty actuaries in Canada, but not any longer. They have their own society and they're producing enough casualty actuaries to keep up with demand.

Milkint: The world is getting smaller. To be a part of the globalization trend, the actuary has to take some risks. Years ago, when an actuary went to a foreign country they would join the colony of English speaking ex-pats. Now, they want to immerse themselves in the other country. They want their kids to know what it's like to live there.

Cho: Partially due to the growth in the number of multinational companies, employers are more open to consider a foreign-born actuary. Although it is still difficult to obtain an H-1B visa, the recent passing of the Portability Act has allowed the foreign- born actuaries to have the option to change employers within the first six years of employment. As for Canadian actuaries, NAFTA has made it easier for them to obtain a work permit (TN Visa), which is renewable every year. This has had a significant impact on the U.S. market with regard to the actuarial pool.

Milkint: Previously, if the employer had been the sponsor getting the H-1B visa, they also would have helped the foreign actuary in getting a green card. Because of the portability act, this is no longer a selling point. After two years, the employer is at risk to lose the foreign actuary; that actuary is eligible to go to a new employer.

Schwartz: I've heard that becoming a citizen in Bermuda is very attractive with much lower taxes. Is this true?

Dossin: It's hard to become a citizen of Bermuda. In perspective, Bermuda is a small island, 20 miles across and 3.0 miles at the widest. It's an independent country of 60,000 people.

Cho: Some Bermuda employers may require you to sign a three-year contract.

Milkint: Being overseas enriches your experience of life. It's like a company rotation. You go abroad for three years and then you come home. Of course, some folks fall in love with being abroad. They say the weather is lovely; it's paradise; and the only downside is leaving. There are some career ex-pats; they make a career out of being abroad and they don't want to come back!

Dossin: They see it as career development.

Schwartz: What things should an actuary do if concerned about becoming unemployed? Suppose it actually happens; what's their smartest course of action?

Cho: The actuary should be proactive. If they can foresee it coming, it's important to make themselves marketable and keep their skills current. Keep evolving. Become as well rounded as possible. Or develop an expertise in a specific field. If it does happen, the actuary should rely on a) recruiter(s) with whom they have established relationships and b) personal/professional contacts. Actuaries should also consider advanced degrees or other designations (such as MBA and CFA).

Milkint: No one is indispensable or irreplaceable. They'll be in demand especially if they have done a quality job on each project and their technical skills are state of the art. It's important how they see themselves. If you see yourself as a business person, don't be concerned. Again, emphasize the value you've added to projects. You need a strong network, including recruiters. Don't be afraid to use recruiters even if you're not actively looking. And you can use recruiters as a sounding board, a resource. Use your past colleagues on previous jobs, use actuaries you meet in other professional circles, to build networks. You don't want to have to cold call someone: "Hi, I'm Jane Smith, and I need your help…" If you do lose your position, you need to explore the job market through a multifaceted approach. My caution is not to get crazy; don't oversaturate the market with news that you're looking. With the demand we have for actuaries today, if you lose a job this week, we can get you another next week!

Dossin: It's important to keep your résumé up to date. Jobs open and close all the time. Looking at reinsurers, for example, many of them from ten years ago don't exist today. There's been tremendous consolidation. You have to recognize that even if you stay with the same employer, your job a few years from now may be quite different than today. The world is constantly changing and the employer you start with may not be the one you retire from. So, my advice is, keep up your contacts, and use recruiters. If you are laid off, though, don't use too many recruiters.

Milkint: Have a plan for your career. Your career should not be at the whim of an employer. Your plan can include some short-term objectives and some long-term goals. How you build your résumé is more up to you than it seems. Have a contingency plan in case your current job ends. And pick your recruiters wisely.

Cho: These are all good points. My advice is to have an overall, broader approach. Your career should not be defined as stages but as a work in progress.

Schwartz: Are there any types of actuaries that face special challenges in getting hired or promoted? Specifically, women actuaries, actuaries with minority backgrounds, and actuaries with physical handicaps? Is there a glass ceiling for these actuaries?

Dossin: Here are some interesting statistics on women actuaries. If you look at the 1991-1995 period, women getting their Associate or Fellow designations were about 27 percent of the total. For 1996 to the present, it's 34 percent. The percent is growing, and that's true for previous periods as well.

Milkint: It's great to see more women in the field.

Dossin: To take this a step farther, from my database of actuaries, and this includes students, women are about 30 percent, men 70 percent. However, looking at actuaries I've actually placed, women have been about 25 percent, men 75 percent. My conclusion, and this is partly anecdotal, is that men have a higher propensity to change jobs.

Milkint: It's my experience also that women actuaries tend to be more loyal to their employer. It's an evolution for females to be executives. So far as women, minority, and physically handicapped actuaries go, they have a tremendous opportunity. Many companies want diversity in their workforces. They will specifically ask us for a slate of candidates with diverse backgrounds. There's no better time for these actuaries than now.

Cho: No, we see no glass ceiling within the actuarial career path. Furthermore, unlike what I've heard about professions such as accounting and engineering, there is little, if any, disparity in income between women, men, minorities, or the disabled in the actuarial profession. Professional progress is based mostly on the individual's day-to-day performance as well as other measurable performance standards such as exam progress. However, in regard to being promoted into nonactuarial senior management roles, a type of "glass ceiling" exists for all actuaries as they climb further up the corporate ladder. Although we see this changing very slowly, there are still very few actuaries who are considered for executive general management positions.

Milkint: If you've got talent and creativity, you are wanted. We have not seen a glass ceiling.

Dossin: We also do not see a glass ceiling. There is no overt discrimination.

Milkint: If an employer comes to us with a request for candidates from diverse backgrounds, we have to honor that request.

Cho: It's an exception to the rule when an employer specifically requests minority candidates. Most employers simply seek highly qualified candidates. For both female and male actuaries, there is a growing trend among employers to create a work environment that offers more of a work-life balance. This includes flexible hours and telecommuting. More employers use this as a selling tool in the recruitment of actuaries. Thus, career advancement opportunities depend more on individual performance, professional qualifications and personal choices. The willingness to travel and to work extra hours can make the difference in receiving promotions.

Milkint: The actuarial world is open. It's a great time to be an actuary if you're a woman, minority, or physically handicapped. There's nothing holding you back. The key is to develop a strong track record of success. As the female on this roundtable discussion, I have to get on my soap box for a minute. Telecommuting attracts female candidates. It greatly assists in maintaining a work/family balance, for women with children. Some organizations even offer benefits for working fathers! We see a more sensitive corporate America. When a company reaches out with a human touch, when it shows there's a corporate heart, it goes a long way toward attracting talent and keeping them.

Dossin: As long as we have a shortage of qualified actuaries, companies will bend over backwards to attract and retain people.

Milkint: It's a win-win. If it's good for the person, then it's good for the company. It will be rewarded with better performance. There's a three-fold return to the corporation.

Cho: Speaking of actuaries with physical handicaps, we recently placed an actuary who was sight impaired. The employer bought them a computer that literally talks.

Milkint: People with physical handicaps are becoming more mainstream in the workplace. There's more openness and willingness to hire them as actuaries. Many schools though, push them towards computer programming.

Dossin: Having a physical handicap can be a disadvantage. It can be a major chore getting to work. Most employers overlook this though.

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If you have any questions or comments on this article, please feel free to send them to Elizabeth Smith at esmith@casact.org.