More Than Just an Actuary

Have you ever thought about what sort of actuary you are or what sort of actuary you’d like to be? Have you daydreamed about people fighting to book time in your diary because your advice is so insightful and strategic? Frank Mitchell Redington once said “An actuary who is only an actuary is not an actuary.” We think this is worth keeping in mind as you progress through your actuarial career.

In this article, we draw on our experiences and those of our colleagues at WorkSafe Victoria to speculate on how to become more than just an actuary.

WHY EMPLOY AN ACTUARY?

Through our experience at WorkSafe and prior roles, it seems clear that all actuaries bring the following skills to an organisation:

• an ability to understand numbers;
• an understanding of lifetime costs and long term trends;
• sound training in using hypothesis testing to work through uncertainty; and
• an aptitude for looking at problems holistically (remember those Control Cycle classes!).

These skills make actuaries a somewhat natural fit for WorkSafe and other injury insurance schemes, where there are key linkages between the long tail nature of the business, claims liabilities and premiums. Our ability to understand these linkages is very important.

WHAT MAKES SOME ACTUARIES STAND OUT FROM THE CROWD?

The skills listed previously are not enough, on their own, to make you the kind of actuary that people kick the door down to visit. Why not? Here’s what some of our WorkSafe colleagues thought.

• Numbers aren’t the only thing that counts. In a business like WorkSafe, people matter most; in particular, injured workers who have needs and expectations that are just as important as the financial viability of the scheme.
• To stand out from the crowd you need to go beyond identifying and measuring a problem by helping to find solutions. To be really valuable, you also need to guide the business in how best to implement those solutions:
• Businesses require decisiveness. In actuarial science, there’s never a right or wrong answer. We can analyse data all day but eventually we need to use ‘gut feel’ to put forward a recommendation that the business will have confidence in adopting.
• Qualitative information is important. This might take the form of subject matter expertise, the market place and the broader economy, which all add another layer of information to consider.
• You have to be able to influence and engage others, sometimes without the authority to do so. It is all very well to undertake some sophisticated analysis that identifies the root of a problem and then develop a solution. However, if you aren’t able to engage others and bring them with you on the journey, then your solution won’t get very far.
• You need to speak in plain English to translate complex actuarial concepts into language that will keep your audience awake.

ATTRIBUTES OF A VALUABLE ACTUARY

Taking all of the above into account, a position description to recruit an actuary who is more than just an actuary might include the following capabilities:

• numeracy;
• strong analytical skills;
• an ability to think in lifetime costs and long-term trends;
• confidence in working with uncertainty;
• a holistic view of the world; including being able to consider non-financial impacts;
• experience in identifying, measuring and solving problems and implementing solutions;
• an aptitude for giving weight to qualitative information before forming conclusions;
• an ability to influence and engage others;
• communication skills to explain difficult actuarial concepts in plain English; and
• a collaborative working ethos to enable formation of strong business partnerships.

It’s important to stress that these ideas aren’t new. Many of the same ideas have been discussed by leading actuaries and other professionals in the financial services industry.

WHY DON’T ALL ACTUARIES HAVE THESE SKILLS?

There are a few possible reasons…

Typical Actuarial Personality

Actuaries are stereotypically considered logical, analytical, longer term thinkers. We were interested to see that both Leonie Tickle’s research and participants in David Miller’s ‘be an influential Actuary’ CPD tour tended to confirm this stereotype. That does not mean all actuaries match this stereotype, nor that those born with these strengths can’t also develop others. It does, however, highlight the need for actuaries to be self-aware and learn how to build non- technical capabilities that may not come naturally to us.

Actuarial Education

The current actuarial syllabus focuses very heavily on technical knowledge. We see the use of many low level verbs such as ‘define’ and ‘estimate’, rather than high level verbs such as ‘compare,’ ‘discuss’ or ‘advise.’ The structure of most of the syllabus gives little opportunity to develop non-technical capabilities. There is little opportunity for students to practise engaging, communicating and influencing.

Community Expectations

What came first: the chicken or the egg? Did we create the ‘nerdy’ actuary perception in the community by focusing on our technical expertise or have the business community’s expectations driven us further in that direction? It’s probably a bit of both.

Professional Circumstances

Workplaces play an important part in shaping our development. In-house actuaries in large corporations have the opportunity to be exposed to different professionals and the inner workings of the business, helping them to understand the importance of qualitative information and how to operationalise projects. On the other hand, consulting firms place a lot of focus on developing soft skills, such as coaching, influencing and communication.

It is important for actuaries to experience a balance between both environments but this is not always the case.

HOW DO WE ENCOURAGE TODAY’S STUDENTS TO DEVELOP THESE VALUABLE SKILLS?

Steps we have already made

The Institute has already undertaken a number of steps towards achieving this goal, including:

• Actuaries for the Future Project (Capability Framework & Assessment Tool);
• Education Strategy Working Group;
• Rebranding Campaign;
• Recognition of non-traditional areas;
• Mentoring Program;
• CPD Tour events; and
• Professional Standard 1: CPD.

However, there must be more that we could be doing.

What we can learn from other professions

We looked at several other professional bodies for ideas. Most have now developed capability frameworks or competency standards. The medical profession stood out as being more progressive than most. Medical course applicants must undertake ‘Multiple Mini Interviews’ that test soft skills, such as cultural sensitivity, collaboration and communication. The course aims to align both technical and non-technical skills. For example, one course component is ‘Self-attribute’ under which students are expected to demonstrate understanding, empathy and management of uncertainty.

Mapping the capability framework to the education syllabus

This process provides an opportunity to:

• identify areas of the current syllabus which the capability framework can map to;
• identify which capabilities are missing from the syllabus;
• reassess service delivery and integrate other assessment formats, such as those involving collaboration opportunities; and
• consider providing formal soft skill courses (e.g. Myers Briggs).

Increase diversity of personalities

Research by Leonie Tickle suggests that the profession could benefit from a greater diversity of personalities. Similarly, our WorkSafe colleagues stressed the value of having a range of personalities on a team. The Institute’s rebranding campaign is a good starting point, but the technical nature of the current education syllabus may still be a deterrent for non-typical actuarial students.

Development opportunities within workplaces

We need to ensure that students are aware of these development opportunities and seek them out. Perhaps we should measure this as part of continuing professional development requirements?

Coaching/Mentoring

We could make it compulsory for all students to have a coach/mentor who can reinforce the importance of:

• developing self-awareness;
• identifying capability gaps;
• having a range of experiences by working in different types of organisations, on different projects and by getting exposure to people from different backgrounds; and
• seeking out learning opportunities that focus on soft skill development.

Enhancing existing Institute guidelines and messaging Greater emphasis should be placed on soft skill development within the continuing professional development framework, perhaps by requiring a minimum number of hours in this area. The professional education requirement seems a natural place to increase the soft skill focus, given that these skills can be developed through on the job training, coaching and mentoring.

SO WHAT DOES IT ALL MEAN?

As a profession, we have identified an issue: we want to shift the stereotyped image of actuaries being technical boffins, and instead, promote ourselves as thought consultants. The Institute has started to address this through various initiatives.

However, some of the most valuable soft skills may not come naturally to many of us and our current education process falls short on developing these. There is more that we can and need to do to solve this problem.

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