Globalization Places Actuarial Education In New Lightby Dale S. Porfilio
Major consulting firms and many prominent insurers today clearly broadcast their international focus on their Web sites and in other corporate identity statements. Treaties and agreements such as the General Agreement on Tariffs and Trade (GATT) and General Agreement on Trade in Services (GATS) are arising that allow products and services, including financial services, to be sold across borders more extensively than at any time in history. Technology has opened national borders to a rapid exchange of information and capital. Countries, organizations, and professions have simultaneously been thrust into a globalized era.
It's certain that actuaries will be working in an increasingly globalized business environment. As such, actuaries often will compete for jobs in a global marketplace. What does this mean for the education and training of actuaries and for the companies that hire them?
Actuarial Designations Around The World
The December 1998 preliminary study of the Joint CAS/CIA/SOA Task Force on Academic Relations notes that the CAS and SOA appear to be among the few actuarial organizations in the world using an actuarial education and professional qualification system that gives little or no formal recognition to academic work. In most countries, actuarial education and professional qualification are much more university-focused.
The report also pointed out that Mexico's actuarial education and professional qualification are totally based on university training, as are those of many European countries. Both the United Kingdom's and Australia's actuarial organizations have "good experience with allowing exemptions from examinations on the basis of a limited number of accredited university programs," the report said.
Several national organizations already grant their designations to individuals belonging to another organization, usually after the person takes only one or a few actuarial exams (residency requirements are usually set, as well). For example, the CAS waives the first five exams for Fellows of the British Institute and Faculty.
In a globalized business environment, this paradox could become a major problem. How will multinational employers of actuaries handle growing needs for employees with mathematical, statistical, and modeling skillsskills that may no longer be solely the domain of actuaries? What is fair to individual actuaries (and candidates), both those who earned their actuarial designations solely through self-study and those who gained them at least in part through university credit?
Serving Their Members
The modern actuarial profession has succeeded in part because of its high educational standards. Throughout the world, both actuaries and their employers will insist that those remain. In many countries, those rigorous standards are being met through designations based on some amount of university course credit. Actuarial organizations offering self-study as the only route to a valued designation may not be serving their members and students at the highest possible level.
The joint task force is dedicated to the excellence of actuarial education. As such, it has taken the position that, while university education should be considered, university qualification should not. Actuarial organizations should retain the responsibility of providing actuarial designations through the examination process.
Globalization will continue, and businesses will strive to meet their worldwide employment needs on the basis of needed skills. Actuaries will compete with each other and, perhaps for the first time, with professionals such as financial engineers, trained outside actuarial organizations. The world has changed and will continue to do so. Actuaries must be prepared to succeed in this new world, and to thrive in it.
Dale Porfilio, CAS Representative to the Joint CAS/CIA/SOA Task Force on Academic Relations, can be reached by e-mail at email@example.com.