Why We Are Staying
by William T. Mech

Gil Student's opinion piece in the February 2001 issue of The Actuarial Review caught my attention for two reasons: his frequent comments about salaries and his concern about the 'artificially controlled supply of credentialed actuaries.'   I'll comment on both and add my perspective to the debate.

Not everyone enters this field of actuarial science because of financial motivations.  Heck, some of us are in the field because we actually like insurance—both the concept and the business of it, peculiar as that may seem to some! If you are in this field and your motives are less financial than Student's, and if you are not as concerned with your position in the industry or firm, it could be that you are attracted to our profession for some of the nonmonetary reasons mentioned in the Jobs Rated Almanac article of a few years ago.  This was the article that prompted many new candidates into the exam pipeline.

While those who are financially motivated can certainly find a place in this profession to realize their ambitions, those objectives don't necessarily endure for the entire length of one's career.  So often it is in the early stages of a career, during the exam process, when the value of the struggle to attain credentials is questioned.  As Student mentioned, there are many conflicting priorities (often involving the "neglect" of loved ones), that contend for one's energy.  I was no different, having entered this career later in life, studying for each exam while raising young children.  I put up with 6 failures out of 16 sittings, went at a pace that my family and I could tolerate, and was content with a slower progression of salary and position as a result.  It has still been a largely satisfying career to date, all things considered, and I see good things on the horizon as well.

It may be that the people who are most financially motivated are also the ones who have the greatest need to broaden their skill base and enhance their market value.  That can indeed be accomplished by attaining multiple "sets of initials," along the lines of Beth Riczko's argument in her opinion piece of the same issue, "Strengthening The Profession."  Which set of initials comes first on the business card (or the resume), I suppose, depends on whom you are marketing yourself to at any given time.  Another way to enhance your value in the marketplace is to take work assignments that are not actuarial in nature and show by your work product that you are more than just a set of initials (or two, or three...).

In the same issue of The Actuarial Review, I noticed the double-page spread devoted to new Fellows and Associates. It doesn't look to me that "the powers that be" have done a particularly good job of what Student contends they try to do, that is, limit the supply of credentialed actuaries.  I'm starting to feel a little claustrophobic at CAS meetings—a huge roomful of (mostly) total strangers!  Besides being crowded with people who could easily have preferred shopping cards from "Nerds R Us," it takes forever now to get through those refreshment lines!

Seriously, it wasn't so many years ago that a new Fellow expected, upon receipt of initials, to be given an officer-level position with the accompanying degree of responsibility.   Now, I see a fair number of Fellows working as unit managers (which Associates used to do), or performing as individual contributors, instead of occupying the corner offices. The "vast elitist conspiracy," designed to keep new students from moving through the system too quickly, just hasn't functioned very well. A big "egg" (of students) has "passed through the snake" in recent years, so that we as a profession are now more top-heavy than ever.  This indeed may be what is keeping salaries and positions for Fellows from being all Student thinks they should be. Some conspiracy.  It looks to me like any attempt at supply-side management by the "conspirators" (whomever they are) has failed miserably.

The free market being what it is, I see nothing amiss in a profession foundering now and then, losing some market share to other "sets of initials" for a while, and looking to right itself over time.  Perhaps there is a lesson to be learned from the recent stock market.  In the flurry of excitement to hop on the dot-com NASDAQ bandwagon, many investors are now dealing with margin calls and the regret of having left the good old Blue Chip Sector for an oversold new idea.  To me, the actuarial profession is a true Blue Chip stock that will weather the whims of the market, albeit not without change or the occasional correction in market value as the market moves from bull to bear.  Members of the profession individually and collectively need to learn how not to be left behind by whatever new "technology" comes along and threatens to render their skills obsolete.  But sound fundamentals are always valued, and, particularly in times of crisis, there is an eventual "flight to quality." I expect members of the CAS will be there when that flight happens in financial services, ready to step in and earn their keep with fundamental skills and knowledge that were so brutally hard to obtain.