I’ve worked in the actuarial profession for 23 years.
I’ve worked in the US market, primarily within individual retail insurance.
The ability to fly.
Actuaries are like engineers in every way, shape, and form. A challenge with having deep technical expertise means it’s easy to get anchored in that micro versus explaining the macro.
When I think of innovative actuaries, I think of individuals who have the ability to be both technical and then step away and think, and more importantly speak, at a higher level. Actuaries must be technically grounded, but they almost need to know it so well that they can step above it, which is hard because the job is so technical.
My belief is that all actuaries have the capacity to overcome this because they are continuous learners by nature, which helps them approach problems in different ways and in a different mindset.
There are several factors that can impact the actuaries ability to influence.
They must have excellent communication skills in order to simultaneously influence individuals around them, beneath them, and above them.
Based on my experience managing actuaries, particularly in pricing functions, you need a supportive environment/culture in order to enable that, an environment that’s conducive to emotional security and challenging the status quo. That is essential to promoting innovative thinking and risk taking.
Mentorship, particularly in a way that allows for trying new things and failing, is also important. Most actuaries are overachievers, which can make innovation difficult because you have to be able to fail to innovate. Creating supportive environments can move interested actuaries into that innovative realm. We need actuaries comfortable in traditional roles and as well as those willing to break conventions.
For one, data analytics is core to the actuarial profession and will only become more important. I believe actuaries have an important role of play when it comes to answering questions on ethics and morals with regards to data and use of data.
Actuaries are bound by professionalism codes that with ethics at core, which is something that’s very special. So if you have a choice of who to pick for a data analytics leader, even outside of insurance, I believe actuaries are well suited for those roles. Data and ethics is a key issue for society and actuaries can be front and center. They have the training, the education, the experience, and the motivation to take on some of our hardest questions.
Where I work, I would say there is complete alignment and integration between data science functions and actuarial functions. In organizations where they don’t mesh, it’s because there’s a perceived threat, which understandably creates barriers. A lot of this has to do with leadership.
What I have found is most people who are driven into data analytics are motivated by science and truth, rather than politics. If we could stay focused on the core of what we’re trying to do and put aside politics, then you begin to open the door for more possibilities. It’s hard because we’re only human, and one of our very human flaws is that we’re unique and have our own perspectives, but I think aligning on beliefs is the best way to get past that.
Many environments and teams face challenges that require a unique alignment of priorities and talent to get things done. Collectively focusing on those challenges is the best way to approach collaboration. If you do this really well, you can tackle pretty much anything.
Innovation is actually really difficult, primarily because when people think of innovation they think of transformative innovation when most innovation is more incremental. I think the expectation is every time we talk about innovation we mean these radical changes, and this perception is a challenge.
A lot of innovation takes a good amount of time, and many leaders might not have the patience to see it through properly. It’s very rare that you innovate a thing, throw it into the market, and it’s immediately successful. Sometimes innovation even happens before the market is ready. Patience is essential, as is understanding that goals and success measures. To create an environment that promotes innovation you need to think differently about goals and measures of success.
I think many leaders see innovation as a way to create differentiation for the future, which is true, that is what moves us forward, but the bar to do that is very high. My overarching belief is that innovation is our only path to a better future. What are some of the more impactful innovations in the actuarial field and why?
I think the actuarial field is experiencing the same change we are seeing in our daily lives: increased processing power, increased digitization of our business, and democratized information. AI and machine learning will soon be the backbone of our tech stack. The larger transition is incredibly influential because it leads to different sets of skills, behaviours, and expectations that are necessary to move forwards and embrace change. With endless possibilities, the question becomes ‘how do you tackle it?’ Not only that, but how do you create processes around validating what you’re doing and demonstrating that it’s the right thing to do.
There’s plenty of challenges with that, especially in an industry that has decades worth of processes that have remained so consistent. Within the actuarial field, there’s blank slates for approaching new problems and then there’s modifying assumptions in a model. They’re very different things. But these opportunities for change are all enablers, and I think the profession evolves with them.
My advice for actuaries looking to be influential would be to master your subject matter domain. You cannot be a generalist, you have to be an expert. That’s necessary to feel and look both credible and confident in your role to innovate and influence. Having people who understand and believe in their abilities helps influence others.
It’s also important to take risks, which can be hard because we are generally pretty risk averse. It depends on the position you’re in, definitely, but it’s always easier to stay in line. Having a perspective and articulating it, and understanding that it’s yours and you could be wrong, are all hard lessons.. Grounding those lessons in sound processes and science can do wonders to help actuaries adapt.