In the 1990s, we wondered how actuaries would preserve their market value when competing with product managers. In the 2000s, some wondered if CFAs would encroach upon our territory. Others viewed the SOA general insurance track as a danger. Today, data scientists are our newest “threat.”
There are two fundamental facts to keep in mind. First, we live in the most data-driven environment the world has ever known. New data sources and monitoring devices with insurance applications seem to pop up daily, whether we want them or not — kind of like the dandelions in my yard. The demand for the skills we are developing in CAS members has never been higher, and we are not fully meeting it. Predictive analytics jobs all over North America remain unfilled and the high demand brings lucrative compensation to those capable of meeting it.
Second, and perhaps most importantly, we are in an actively competitive market to provide these technical, strategic services. Gone are the days when actuaries were virtually a protected class of employee. (“Oh, nobody else can do the mystical stuff the actuaries do.”) If we don’t meet the demand to provide data-driven solutions to our customers, there is an increasingly long list of alternatives now available to them. This means that CAS members need to be proficient not only in the technical aspects of our work, but also in their business applications. There has never been greater demand for actuaries who are able to not only translate the technical details, but also be part of the team developing and implementing the business solutions.
So how do we actuaries preserve our market value in this ever-changing, data-driven world? In short, we earn it. We earn it the same way actuaries always have: by demonstrating our risk analysis skills, by thinking critically in applying models and analytics and by effectively communicating our data-driven, value-added insights to our customers.
This blog post is culled from In My Opinion – How Do Actuaries Preserve Their Market Value?, printed in the September/October 2016 Issue of the Actuarial Review
Agree fully, Rob. No profession is without risk, but with risk comes opportunity. Actuaries need to rise to the challenge and show our principals and the public that we deserve their trust.
“earn it the same way actuaries always have”
So, key take-away – do the same thing. Thanks for the insight, Robert
The CAS needs to offer substantive continuing education that gives older actuaries a crash course in data science. Not how to do it, but what it is and how to use the results. They need to understand why it’s so much better than the methods they learned in the 70’s and 80’s.
We should split into the things the CAS can do and the things individual members have to take care of on their own.
The CAS can do more in terms of culling out older articles on the syllabus that are no longer relevant or use techniques that are outdated and putting more emphasis on the application of modeling techniques that are available today, but were not when much of our material on the later exams was created. The CAS can do more in terms of vetting which on line courses would work well for members and/or laying out courses that would enable members in mid-career to catch up with today’s modeling applications. It can be difficult to know where to start and creating an efficient road map to acquire a given skill set would be useful.
There are general business skills that are necessary to acquire to advance, but there are a number organizations outside of the CAS that do very well at providing that type of educational experience. We don’t need to replicate or try to compete with other organizations ( MBA programs), which do very well at providing the means to pick up those skills.
Also, some level of coding or programming skills are required for those who want to remain in the analytical end of the business. The CAS could do some leg work to identify which on line courses work well, but it falls to the individual to find time to take those courses.