Take the Pledge: Becoming an Actuary of the Future

by Jack Richards, CAWG Candidate Representative, and Wes Griffiths, FCAS

The actuarial profession is changing rapidly, fueled by the rise of advanced analytics, technological advancements and volumes of data that we could never have previously dreamed of. As these key influences provide an opportunity to transform our profession, actuaries will be faced with new challenges and will increasingly cross-collaborate with other insurance stakeholders.

Jessica Leong, immediate past president of the CAS, challenged 2021 Annual Meeting attendees to solve a new business problem in the coming year. She noted that the market forces mentioned above challenge actuaries to solve new problems by thinking differently, interacting with new business partners and bringing value to their organizations in ways they haven’t done before. Her message was clear: The actuary of the past and the actuary of the future share similar backgrounds, but the actuary of the future must invest in their own skills and development to successfully deliver on these new challenges.

An actuary of the future might focus on equity in insurance, evaluating the impact of race and other protected characteristics in insurance pricing, and accessibility. They will need to deploy increasingly complex predictive analytics that model not only premiums, but also driver behavior, underwriting workflows and customer acquisition metrics. As computing power increases, actuaries will more often leverage stochastic analyses of reserve volatility and other financial analyses not previously feasible. To answer these questions with authority, we must continue to prove our expertise is well-suited to influence the business.

While the solutions to these problems may become increasingly technical, driving the business and influencing stakeholders require the actuary to effectively communicate by teaching or story-telling that “paints the picture” of our analyses and of the possibilities that actuaries can uniquely bring to the table.

As a CAS candidate, your journey with the CAS and the profession is just getting started. Through a combination of the credentialing process and on the job experiences, you will begin building your knowledge of the actuarial profession and insurance industry; however, to become the actuary of the future, you must seek out opportunities to challenge yourself, your team and your company.

So, what can you do to become an Actuary of the Future?

Understand the business and your partners — Building a robust knowledge of the insurance ecosystem starts with grasping the goals, processes and objectives for each function. Job-shadow underwriters, claims professionals and others to understand their roles as part of the bigger picture. Look for rotations and roles outside of core actuarial pricing and reserving functions and build your industry knowledge by reading industry periodicals or going to a conference outside of the traditional actuarial space (e.g., insurtech). This diversified experience will give you a broader understanding of the business and help you comprehend and influence your business partners.

Learn to teach, story-tell and influence — As more actuaries are asked to play a part in cross-functional teams, your role will require you to teach others the core concepts of the actuarial function to influence and persuade them to “buy-in” to your analysis. Listen to other’s perspectives and ask questions before you start to persuade. Be open to admitting you are wrong and incorporate other perspectives into your analysis.

Adapt to new technologies — Drive change within your team by exploring innovative technologies that can enhance your analyses or make your processes more efficient. Seek out the next trend and get in front of it — being a pioneer and bringing others along to amplify the impact on your function. When trying out these recent technologies, accept that you will pivot fast and fail often, and learn from those experiences to maximize your impact going forward.

Learn to fail fast – Don’t be afraid to try new things but recognize quickly when they won’t work. Build a culture within your team that values efforts and ideas, even if they eventually don’t pan out. This culture encourages team members to try new things without the risk associated with failing. Through trial-and-error and learning fast, you’ll be able to ideate and innovate quicker the next time.

These skills will enable you to solve challenges that actuaries will face in the future. Your ability to adapt to new predictive modeling software and articulate the possible inequities in insurance rating plans will help your business partners understand how to build equity and ensure fairness in insurance pricing. Your ability to fail fast will allow you to rapidly ideate on models and analyses that help business partners make decisions, bringing more value to the business quicker.

To become the actuary of the future, start working now on building these skills and deepening your understanding of the broader insurance ecosystem. As you progress through the exams as a candidate, your technical actuarial foundation will be developed, but there is more to being an actuary than this foundation. The differentiators come in different forms and require focus, intention and effort to build. To echo Jessica Leong’s challenge to CAS actuaries – Who’s ready to solve a new problem for your business and to take the pledge to be an Actuary of the Future?