At a CAS Board meeting last August, Board Member Jessica Leong posed a strategic question: “Why does the CAS exist?” Leong told the Board about author Simon Sinek’s TED Talk inspired by his book, “Start with Why.” Sinek observes how successful organizations communicate and sell themselves and believes that many organizations communicate in questions in the following order: What? How? Why? Sinek says that such order of these questions is the exact opposite of how the most successful organizations communicate: Why? How? What? The CAS answers these questions through: the Preamble to CAS Mission Statement (what), the Definition of a Casualty Actuary (how), the CAS Vision Statement, and the body of the CAS Mission Statement (why).
The takeaway from Sinek’s Ted Talk, however, is that the why should be more explicit and attempt to best express the beliefs and inspirations for the CAS in society — why does the CAS do what it does? For example, why do we believe that it is better for actuaries to be qualified in the casualty field (non-life, property and casualty or general insurance) by the CAS rather than an actuarial organization that broadly qualifies actuaries across all areas of specialization?
Our why might be stated as “To provide society with the quantitative analyses needed to manage the financial consequences resulting from property and casualty risks.”
Said in terms of what we believe, it may be stated as, “We believe that CAS actuaries can provide society with the quantitative analyses needed to manage the uncertain financial consequences from property and casualty risks.”
This sounds very consistent with the mission, vision and purposes of the CAS, but the question remains: Why should there be a separate actuarial organization for just property and casualty risks? Sinek describes finding your why in terms of beliefs — your community is defined by shared beliefs, and those who share your beliefs are drawn to you and your community. Over 100 years ago, the actuarial community was intently focused on mortality risk. The quantitative analysis of mortality risks is quite distinct from the quantitative analysis of property and casualty risks. Additionally, the life insurance industry and the property and casualty insurance industry have focused on very different risks throughout their development. Therefore, having a separate actuarial organization that focuses on property and casualty risks would seem to be a very natural community. There are parallels in the specialization of other professions, but the closest example of such specializations in the insurance field is with underwriters. The underwriting profession in the U.S. has a long history of professional training and credentialing from two separate organizations. Each of those organizations has flourished in their specialized areas of insurance underwriting and has expanded their training to other related types of professionals. The common driver has been the needs of the insurance industry and the community of professionals that defines itself based on those needs.
So the suggestion to merge actuarial organizations or that one actuarial organization would provide a better way to meet the needs of the actuarial profession seems to ignore the need for specialization. More importantly, a professional community defines itself based on shared beliefs and the common problems and solutions that those professionals are most interested in. The CAS has long established itself as meeting the needs of the insurance industry that has also specialized in property and casualty risks, either by choice or by laws and regulations that apply to those insurance companies.
The CAS is the third largest actuarial organization in the world that provides its own actuarial credentials by examination. So the idea that specialization can be better served by a property and casualty section within one actuarial organization not only ignores the needs of the industry that CAS members have served for many years, but also ignores the incredibly strong, vibrant and durable community of actuaries that the CAS has become.
So why should the CAS exist? Because the CAS is a community defined by the shared beliefs of actuaries whose specialty is solving actuarial problems in property and casualty risks, and those actuaries who share our beliefs are drawn to the CAS and our community. Those shared beliefs are what define our community within the actuarial profession and thereby define why the CAS should exist.
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This blog post is a shortened version of the President’s Message, printed in the May/June Issue of the Actuarial Review.