Christine Hofbeck - Actuary, Author, Keynote Speaker

Christine Hofbeck - Actuary, Author, Keynote Speaker

What do you see as key characteristics of innovative actuaries?

Innovative actuaries look for reasons that they “can'' instead of reasons they “cannot.” The insurance industry is highly regulated and we have our actuarial standards, so often actuaries are running through all of the reasons they can't do something. Innovative actuaries look for what they can do and if it falls outside the guardrails, they will find a way to (ethically) widen the guardrails. This is sort of a mindset shift.

Also, innovation doesn’t usually happen without failure because we're probably not going to get it exactly right the first time. So continuing on the idea of a mindset shift, innovative actuaries will reframe the word “fail” into more of something like “test and learn.” Failure is hard for us because a lot of us have come off years of studying for exams where failure feels hugely disappointing. Resetting our brains “to failure is okay,” or even “failure is bringing me one step closer to success” is something innovative actuaries do.

Innovative actuaries don't do their work in a vacuum. They talk about their ideas, they get people excited about their ideas and they celebrate their ideas. They generate enthusiasm around their work so when the innovation is ready to roll out, their whole audience is excited. I have seen actuaries who try to be innovative, who go into the back room and don't tell anyone what they're doing. Then, they come out and share and it’s harder to have success that way. People who are able to generate excitement around their work are usually pretty successful.

Lastly, I think that innovative actuaries will seek to solve an existing problem. When you’re solving an existing problem, you have the greatest chance of acceptance and use. So they’re innovating in places where their audience will say, “Wow, that’s great. Wow, I need that. I need to use that, I need to do that.” That allows the greatest chance of success.

What factors do you believe influence the impact actuaries can have within their organizations? (tools, collaborative opportunities, leadership positions, support from leadership, etc.)

The first thing I’d say is time. Us actuaries are often scheduled to within an inch of our lives. We are under super tight deadlines, usually on extremely lean teams. And by lean, I mean head count. A lot of actuaries are incredibly innovative and they have these wonderful ideas that they want to explore, but frankly, there is just not time. There is no time to innovate. There is no time to make something efficient. Sometimes there’s not even time to even think beyond the task at hand. The ability to have time in your workday to think and to do is absolutely critical.

" It needs to be okay to fail and shift again."

The second is the acceptance of failure (I talked about this in the last question too). It needs to be okay to fail and shift again. In this area, the test and learn mindset needs to be not just with the actuaries and innovators themselves, but with the team or the organization. Most of us are operating with midyear and year-end performance reviews and we want to be successful. So the mindset of the organization needs to support a test and learn philosophy.

One thing that I have seen some companies think about is creating an innovation team. Certainly, if that is something that’s available in your organization—where there can be actuaries that are fully dedicated to innovation—that’s something that would be successful. But I don’t see that often. I would love to see that more often.

What are some key ways you see the actuarial profession evolving in the next few years?

The world is changing at an unprecedented rate and there is now this huge push into automation. I think we will continue to see our work become more automated, especially the earlier actuarial work. That means once a lot begins to become automated, we will move much more into that recommendation space of answering the “So what?” or the “Now what?” Our communication skills will be more important than ever so that we can better influence the business decisions around the results. Gaining a better understanding of how we can influence next steps, understanding other people’s motivations, and better communicating with others, that is all going to be critical.

That’s not normally what we think about when we think of actuaries, right? We think of people sitting behind a computer crunching numbers. We’re going to need to change our entire mindset to the computer now crunches the numbers, actuaries make the judgments and the recommendations around the numbers. Actuaries decide the “So what?” and the “Now what?”

How do you feel about automation coming into actuarial science?

Automation is happening in many jobs. What I love about the actuarial space is that we are so uniquely poised to understand the business, understand regulations, and understand data. We’re in a great place to be able to say, “Yeah, we are the experts who can take the output of that automation and tell you what to do next.” I am not at all fearful of automation. If we can get over the automation hump that people are hesitant about, what we'll actually find is that it's elevated our value, that we’ve become more important because now we're influencing the decision making around it.

What advice would you give someone considering an actuarial career today?

Do it! I love this career. There are so many opportunities for people who want to be actuaries; there’s insurance, there's consulting, large global companies, small companies, health care, government, investments, I could go on and on. People can find the niche that feels right for them. I believe that there is a role for everyone everywhere and that people should always come home from work feeling like a total rock star. If you're not feeling like a rock star then it's time to find a new role or a new team or a new manager or a new organization.

Despite significant collaborative potential between data science and actuarial science, the two fields don’t always mesh. How do you believe they can work together more successfully?

I actually built two different predictive analytics functions for two large global insurers. In both cases, my teams were high performing teams and a beautiful collaboration between actuaries and data scientists. So I do believe that this works. It starts with a deep mutual respect for each other and each other's capabilities. The data scientists come to the table with expertise in managing these gigantic datasets and building these complex models. The actuaries come to the table being experts in the data, the regulations, the products, and the business. The actuaries are going to create the recommendations and the judgment around the outputs. Success happens when data scientists and actuaries come together and respect each other’s contributions, they both leave their egos at the door, and work together toward these beautifully collaborative solutions.

"It starts with a deep mutual respect for each other and each other's capabilities."

Some actuaries believe that they need to become data scientists. I don't think that is necessarily the answer. Data scientists are experts in data science and actuaries are experts in actuarial science. I think there is a world where we can come together and complement each other and mutually lift each other up. 

What makes innovation impactful?

I believe that innovation is most impactful when we use it to solve an existing problem. Most organizations have limited resources of people, time and dollars. Innovations are most likely to gain traction when we put into use something that's actually going to solve a problem.

There also needs to be a strong consideration of the audience that the innovation is created for. Innovation can be something amazing, but if it's too complex to explain or too expensive to maintain and run, then it could lose its impact. We need to keep the audience or the end user in mind.

What are some of the more impactful innovations in the actuarial field?

There is no good way to answer this question because the answer is infinite. I could bring up new products we've created or new sources of data we've used. But I don't want to overlook the innovation that someone came up with that allowed us to do a 10 hour run in 10 minutes. Those are the types of things that completely change an entire experience for a team or for a company. Innovations that simply allow us to do our work better are critical. Whether the innovation is large or small in scope or scale, anything that helps us move forward as a profession is highly impactful. I also say that because not everyone can change the world, but even those small things that people pitch in every day make a difference. So I'm not giving a single answer. I'm giving a shout out to everyone who does something that just pushes us forward a little bit.

What is the best type of change we can adopt as actuaries become more influential in the insurance industry?

We need to become more comfortable sharing our own value. As actuaries, we develop these incredibly creative solutions to these very complex problems, and yet we tend to downplay what we do. We feel like our work speaks for itself but that is not the world that we live in anymore. I wrote a post on LinkedIn and I said that competing professions are getting more attention and outpacing us, and it's not because they're doing better work, it's because they're getting more attention. So we have to get more comfortable sharing our value.

When we can begin to make that traction, we will actually become more influential. When I think of influence, I think of how we communicate our results. We need to think about things like how do we communicate highly technical information in a non-technical way? How do we frame up the conversation in a way that is most motivating to our audience? What information should we be sharing? How should we be sharing it? How do we create attraction around ourselves?

The whole idea has to do with the influence that we can create or the success that we can have goes beyond the work that we do. It's the way that we engage our business partners and our customers so that they believe in it. They believe in our work, they trust it, and they believe in us. They celebrate us, they trust us. If we are better at our communication, I think we can be more influential in the outstanding solutions that we create.