The May 2012 issue of The Actuarial Review included point-counterpoint opinion pieces from Mike Miller and Pat Teufel regarding the future of the actuarial profession.
According to Mr. Miller, “Now is the time for a significant change in the organizations that serve U.S. actuaries.” He goes on to propose “a new U.S. actuarial organization built once again on the concept that actuaries are uniquely qualified to estimate costs associated with future contingent events. The proposed new organization, Practicing Actuaries of America, will support actuaries in the area of property/casualty and health insurance.”
Read Mr. Miller’s complete opinion piece here.
In her counterpoint, Pat Teufel contends that the CAS continues to be true to its mission, explaining that “employers and principals of casualty actuaries tell us that the value of the CAS lies in our comprehensive and rigorous educational framework, and the ability of our members to offer insights by applying those technical skills to real business issues, all within a context of professional integrity. These three facets—professionalism, technical training, and practical application—have been at the core of the CAS since its inception.”
Read Ms. Teufel’s complete opinion piece here.
What do you think?
We have moved the discussion to the CAS Roundtable and all CAS members are encouraged to weigh in on these important topics.
- Will the CAS’s consideration of an expanded statistics and model-building curriculum for our basic education undermine the value of the CAS credentials?
- Should the CAS be doing more to advance the relevance and value of the CAS actuarial practitioner?
- Is a new organization needed to accomplish these aims?
Share your views by leaving a comment below.
A sound statistical backing is incredibly important to things a property & casualty actuary will work on, and a rigorous testing of that understanding is critical to keeping the profession relevant. The CAS does need to take care not to emphasize techniques that are only useful with large amounts of good quality data, or highly theortetical concepts that have no practical application in the insurance industry. However, there is a lot of statistics that meets the criteria of wide applicablility, and that is the expertise an actuary must have, and relying on college professors to validate that is a path to our own destruction. The CAS membership was strongly opposed to the Future Education Methods proposal advanced by the CIA, precisely because it is well known that academic grades are rife with problems, and are not a credible source of validation of knowledge.
I don’t think a new organization is needed, I just think that sometimes we need to take a step back and ask “does getting more complicated/statistical really make sense for the analysis we are doing?”
This point-counterpoint is really about two unrelated issues. One is the growing mathematical sophistication of actuarial science and the other is about conflicting visions of existing societies.
I have both actuaries and statisticians working on my team. They do not have the same skill sets. There is a core of insurance-industry context the actuaries have that provide an essential background when working on even the most technical insurance problems. No matter how much technical education you require of actuaries, they do not become equivalent to statisticians. No matter how much statistics is needed in some applications, you cannot just plug in a statistician to an actuarial job – even though they provide valuable input in some areas. Making the profession more quantitative in no way makes it obsolete. On the other hand, some of us old actuaries might become obsolete – that is not the same question.
On the institutional issue, I am inclined to accept what the SOA is saying about international competition. We might see their nonlife track as competing directly with us, but I tend to see it more as their as their attempt to fend off emerging competition in China with the Institute of Actuaries. That is also where they are most likely to find some success with this initiative.
Conversations with Chinese actuarial students studying in the US are revealing on this matter. Those who would like to work a year or two here then return for a career in China are interested in the SOA nonlife track. Those who want a career in the US have no interest in it whatsoever.
I suggest that Michael Miller browse through the 1914 Volume 1 Number 1 of the “Proceedings of the Casualty Actuarial and Statistical Society of America”:
http://www.casact.org/pubs/proceed/proceed14/1914.pdf
Although Miller is quite correct that professionalism and practicing to serve clients is central to being an actuary and goes far beyond statistical skills, the CAS cannot escape (no more in 2014 than in 1914) intimate and extensive involvement with advanced statistics. It is out of touch with current reality to accuse the CAS of abandoning professionalism and real world practice simply because the CAS incorporates statistics into its exams and continuing education. Browsing the current syllabi for Exams 5-9 and the topics of the dozens of sessions at any of the 5 annual large CAS gatherings quickly disproves that assertion.
In trying to meet the onerous Continuing Ed. requirements, I subscribe to numerous webinars. P.Teufel is a regular contributor. To paraphrase P.Teufel from a recent webinar, “The CAS is under attack within the risk management area of practice.” Basically, audit firms are allowing non-actuaries to prepare reserve analyses for non-insurance entities since the estimated reserves represent a tiny fraction of the balance sheet and (presumably) a credentialed actuary is too expensive. This is a ridiculous situation. High level statistics is simply not required in these situations and businesses need this expertise at a reasonable price. If Members of the CAS cannot provide this service in a reasonable manner, it would appear that the CAS has no real purpose outside of true insurance company work.