Ensuring Effectiveness
By Clive L. Keatinge

The new year brings revisions to our early exams, including two innovations—computer-based testing (beginning with Exam 1 later this year) and validation by educational experience for economics, corporate finance, and applied statistical methods (See The Actuarial Review, November 2004, "Exam 1 To Become a Computer-Based Test in 2005" and "Important Changes to Exams 1-4 Due in '05").

Although change is always difficult, I believe these innovations will turn out to be positive steps in actuarial education. Now it is time to turn our attention to broader educational issues.

To this point in our history, we have treated our education process as mostly disconnected from the rest of the actuarial world. We expect our candidates to make the decision to become casualty actuaries very early in their careers and we expect them to remain casualty actuaries their entire careers. We have given little importance to even a basic knowledge of other areas of actuarial practice and we have done little to allow for a reasonable educational path for casualty actuaries who wish to become qualified in another practice area—or for other actuaries who wish to become qualified casualty actuaries. We have regarded joint exams with the SOA more as a necessary evil for recruiting purposes than as an inherently desirable feature of actuarial education.

I believe we need to reevaluate these tenets. We do not operate on an island. On an organizational level, we interact with other practice areas through bodies such as the AAA, CIA, and IAA. In addition, over the course of their careers, many CAS members will at some time have occasion to deal with issues from other practice areas. To make us as effective as possible, I believe we should ensure that our new members have a basic understanding of all actuarial practice areas. As we contemplate the CAS Centennial Goal, we should also remember that the rest of the world expects such a basic understanding.

The vast majority of CAS members will stay primarily within the casualty practice area for their entire careers. For them, just a basic understanding of other practice areas is sufficient. However, I believe it is useful for our profession to have a stable of actuaries who elect to become qualified in more than one practice area. From their ranks will come those who can represent the profession from a broader perspective, can provide cross-pollination of ideas among practice areas, and can fill positions that require expert knowledge in more than one practice area.

Unfortunately, we have erected an unjustifiably large barrier between the casualty practice area and other practice areas. Today, we share roughly one-third of our basic education with the SOA. I believe an objective analysis would show that we could share nearly two-thirds. Candidates who wish to become qualified in a particular practice area should of course have to demonstrate competence with material from that practice area. However, simple fairness dictates that candidates should not be reexamined on material on which they have already demonstrated competence through qualification in a different practice area.

In particular, enterprise risk management is one area where more cooperation with the SOA would be useful. We have joined with the SOA in two highly successful enterprise risk management symposiums and will continue this in the future. Wouldn't it make sense to join with the SOA in basic enterprise risk management education?

In planning our future education system, we need to focus on the future without being constrained by the ways of the past. We must overcome the political divisions within the profession to construct an education system that will best serve the casualty actuaries of the future, wherever they may be, and wherever their careers may lead. If we can do that, we will be that much closer to the CAS Centennial Goal.