Brad Smith, in his inaugural speech as President of the Society of Actuaries, called for the Society of Actuaries (SOA), Casualty Actuarial Society (CAS), and American Academy of Actuaries (Academy) to consolidate, stating, “There is absolutely no need for three separate professional organizations…to exist. They need to consolidate into one efficient, effective organization.” Mr. Smith made these remarks during a luncheon speech on October 18 at the SOA Annual Meeting in Chicago. CAS leadership was informed of the content of this speech the afternoon prior to its delivery, but was not otherwise involved in the proposal or its manner of presentation. The text of Mr. Smith’s speech can be read in its entirety on the Society of Actuaries Web Site.
The CAS Board of Directors has been apprised of the SOA President’s comments and will discuss them during its next meeting, scheduled for November 6 in conjunction with the CAS Annual Meeting in Chicago. In advance of that discussion, the CAS Executive Council is soliciting feedback from CAS members. We have developed a short online poll and members are invited to respond. The CAS Member Advisory Panel will be asked to complete a slightly longer survey prior to the Board meeting, but we are interested in all CAS members’ reactions to Brad Smith’s proposed consolidation of the CAS, SOA and Academy. I also invite CAS members to share their comments on the blog.
After reading the full text of the comments made by the SOA President, what is your view on the idea of consolidating the Casualty Actuarial Society, Society of Actuaries, and American Academy of Actuaries into one actuarial organization? Leave a comment here and complete the online poll.
Merger or takeover?!? By the incoming SOA president’s own words, it would indicate a takeover of the CAS by the SOA.
“In the intervening years, a number of our leaders have attempted to address these issues and in the most recent election, several of our candidates for President-elect also expressed the view that structural change is needed.”
Notice how he uses “our” throughout? Where are the AAA leaders’ comments and input? Where are the CAS leaders’ comments and input? They are suspiciously missing. Translation: How can we force the takeover of the CAS and AAA to boost our own power in the face of decreasing relevance in the Actuarial world.
He throws out opinions as facts, so I will too. Let’s face it, in another ten years, SOA actuaries will be much less relevant, the SOA will be losing membership, and will be in danger of being taken over by the AAA, not the other way around.
There is a common body of knowledge that life actuaries and non-life actuaries share, but it is only at the mathematical, statistical and financial levels. As soon as one gets to the product, distribution, accounting, regulation, organization and service knowledge required by the professions, one finds a wide divergence of experiences and theory between the two groups. Since the insurance industry is divided by history, regulation and company structure into life and non life entities, it is appropriate and even necessary that there should be separate societies for life and non-life actuaries. The purpose of the SOA and CAS is to serve their members as these members serve the public. The American Academy of Actuaries is and has been a good solution to the problem for coordination between the different actuarial types.
Raymond Nichols, FCAS, FCA, MAAA, CPCU, CIDM, ARe, AIC
Actuarial societies in the rest of the world are not divided as per industry (Life v/s P&C). They just have industry wise sections in the same society. So …
Have CAS & SOA been able to achieve something unique for their respective industries which other actuarial societies (for example the ones in UK, Australia, or even Canada etc.) have not been able to achieve?
If yes then .. If there had there been a single actuarial society in US, what would have been the impact of that on the unique achievement? Conducive / not-conducive? Cost effective / not-cost effective? etc. etc.
Please don’t take my questions as my stand in support of or against the proposal.
If the example of the Canadian Institute of Actuaries is any indication of what a single US actuarial society will become, be prepared to be poorly represented as a non-life actuary.
As an actuary living and working in Canada, my reference is far more the CAS than the CIA. The CAS has clearly nothing to gain in joining hands with the SOA and the AAA.
I support your point of view. I feel that the CAS voice within a newly formed association would be very limited.
While there might be some benefits to a larger association of actuaries, the disadvantages for the CAS outweigh them.
Why not consolidate the medical and dental societies ? Why not consolidate the very numerous engineering societies ?
http://en.wikipedia.org/wiki/List_of_engineering_societies#United_States
For that matter, why not consolidate the US Senate with the US House of Representatives? Those two bodies represent the exact same populations and 99% of the time debate and vote on the same laws.
Is the current organizational partitioning of the US actuarial profession really that redundant compared to other professions, governing entities, corporations, and interest groups? A single all powerful organization would reduce checks and balances.
The unique role of the CAS and its members would dissolve in a consolidation of the actuarial societies. The subsequent confusion to public would likely result in a significant number of SOA members with no background in P/C being hired at a high level to do P/C work, and some CAS members with no relevant background hired at a high level to do life/pension work.
Since I began my career in the 1980’s, there have been at least 1 or 2 calls for such actions in each decade. With the new decade beginning it is only natural to have these thoughts come forth again. The competition between the SOA, CAS and any Actuarial Organizations outside of the United States for what ever resource or purpose is healthy. The diversity of mind set and skill set is what keeps us relevant to our particular clientele. Combining our organizations will not enhance that diversity, but instead likely stifle it.
I agree that communication from Actuaries (any of us) has been poor overall and our true relevance to the Insurance and any other Industry has been impaired because of it. But combining our organizations, will not enable us to be better communicators. Enhancing the cooperation and communication among them will.
If we were to marry these organizations, then to be successful, it would need to have the attributes of a successful marriage. And communication between the parties is the most crucial for long term growth together. We are not at that point nor does it appear we are working our way there.
After working on both Joint CAS and SOA task forces and on a AAA Task Force, our communication amongst each other (the differing disciplines) is feeble. And while we have some venues for communication such as the Council of Presidents, it is not adequate to entertain the thoughts of a venture such as this.
One argument for combining actuarial societies in the US is the argument that foreign actuarial societies are organized that way. But why is a worldwide division by country a good idea? Better that life and non-life societies exist separately worldwide. Should all professional medical services providers be one professional society?
In my opinion, a better organization would be one where the financial, health and enterprise risk actuaries join the CAS leaving the life and pension actuaries in the SOA. We would then have a better division into life and non-life actuarial societies. The problems of credit default swaps, supply chain disruptions, natural catastrophes, etc are all recently expressed risks well understood by non-life actuaries. The world would be well served by a strong common worldwide non-life actuarial profession. By organizing along life/non-life divisions we could be an example for the rest of the world to follow. Let the AAA remain as the single representative of actuaries in the US.
Raymond Nichols, FCAS, FCA, MAAA, CPCU, CIDM, ARe, AIC
If consolidation of the two professions was a win then it seems that in the corporate world the Life and the P/C divisions would consolidate, but that does not happen as there are different disciplines required for the two products and consolidating dilutes the strengths of individual organizations.
As far as the SOA, CAS and AAA there has to be an economic win for it to be feasible as the content of the work is wildly different. I don’t know how the work and topics of Health actuarial group is integrated into the SOA’s venue.
Can the exams be the same? Even in the CAS we are discussing different and changing needs as far as training our members. More will have to defined before we can get support for such a big change
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The SOA is considerably larger than the CAS. It is not clear to me that we could efficiently absorb them at this time.
Thank you, Tom, for putting a smile on my face in the midst of the debate. It’s probably not appropriate for me to be posting anything in public ahead of the Board discussions on Sunday, but I had to stop and say thanks!
I’m concerned that the SOA is much larger and we would not have much influence. We saw with the joint lower exams that it didn’t go as well as we had hoped, and we ended up making our own part 3. If we can’t have joint lower exams now when we’re a separate society, what hope will we have once we’ve joined and we have a small fraction of the vote?
My household has an interesting perspective as I am a member of the CAS and my husband is a member of the SOA. We both disagree with this merger. My husband has had the opportunity to work in both P&C and Life/Health fields, and he agrees they are unique disciplines that require separate focus. While this separate focus could still be maintained within one society, the methods in with the SOA is recommending this merger implies it is unlikely. This statement was made without working with the CAS, so what indication do we have that a merger would work to ensure our P&C needs at met. Also interesting, this statement was not made with the knowledge of the SOA members. My husband had no advance knowledge of this statement, or the opportunity to express his opinion. Without a guarantee that we would continue to have the same voice in a combined society that the CAS provides us, I cannot support this merger.
It seems to me that the main reason for the proposing the merger is to improve the “image of the actuary” to general business public. I do not see how merging the actuarial societies will promote this goal in any way, shape or form. How does having a “unified front” increase public awareness of our profession? Or how will it improve their understanding of what we do?
I have had the pleasure of working with several SOA members during my 34 years as a casualty actuary. They are bright, energetic, friendly and easy to work with. However, it is amazing how different our problems and issues are. In working with them it is generally an education for me and for them as similar concepts and questions invoke very different responses from SOA and CAS members. In probing, it becomes readily apparent that this is because of our respective experience reflects the unique and very different aspects of the Life and P&C areas. Until these areas require the same services I fail to see what benefits will come out of a unified association that we haven’t already gotten from the Academy. I do foresee serious disadvantages as intelligent but misguided actuaries of all types attempt to apply there experience from one side of the house to the other.
The first time I interviewed a non-P&C actuary for a P&C job he asked me if we have tables that have the probabilities of loss reserves. Until we do I think we are better off separate.