Are Actuaries Irrelevant?
In a world where AI, big data, and improved analytics are increasingly relied upon for complex tasks, and with regulatory landscapes constantly changing, how has the career path of the Actuary evolved over the years?
In fact, asks Clare Nash, “Are Actuaries still relevant to Boards?” In response Willis Towers Watson Senior Director Jeremy Nurse (FIA) says …
JN: “When I started my actuarial career almost 40 years ago, the path ahead was clear – pass the exams, get a good grasp of the financials of the business, and lead a small technical team. Next, get involved with the profession by writing a paper or two, manage a bigger department, network with other senior actuaries in the Dining Clubs, then take a senior executive or Board role somewhere in the firm (possibly unrelated to being an actuary). And to cap it all, become a member of the Council of the ABI, PMI, ACA, Institute or Faculty, retire after distinguished service and join a few other Boards in retirement. Career and comfortable life sorted!
Much has changed since then. As the regulatory agenda has evolved and expanded, along with the speed and capabilities of technology, so has the role and contribution of actuaries. The path that seemed so clear has developed many different routes. Some look wide and appealing, some might be dead ends. But with more twists and turns, the route for the journey is now far from certain and the destination is rarely visible. New recruits to the actuarial profession will not have the same clear pathway mapped out, but still have a world of possibilities open to them.
In the insurance world, the Solvency II role of “Chief Actuary” seems to me to be a step down in importance compared to the 1980s role of “Appointed Actuary”. Within the UK, the Equitable Life saga and the Penrose Review changed this anyway, while the influence from Continental Europe of the more limited technical role of the “Insurance Mathematician” set the seal on a more tightly-defined regulatory role. Both effects have diluted the discretions and influence that the UK’s actuaries had previously enjoyed, and the onus is now (rightly) placed on the Board and the Senior Managers of insurance firms to lead and be held fully accountable for managing the business.
The rise of the Chief Risk Officer role has provided an avenue for the technically proficient senior actuary to pursue, but this is not a role that is reserved for actuaries to the exclusion of other professionals. There is now undoubtedly a smaller proportion of Board and senior executive roles held by actuaries than in the past, as the expertise from other disciplines has come more to the fore.
So, are actuaries still relevant to Boards? Do they have the commercial focus, the entrepreneurial spirit, the necessary leadership and communication skills, the experience and gravitas to contribute effectively at the most senior levels? The answer is the same as it is for every other profession or walk of life … undoubtedly some do, while many others do not!
What is very clear, though, is that the technical expertise and intellectual rigour that (most!) actuaries possess is not a sufficient set of skills to earn a place in the Boardroom. With much focus now on ‘new’ nomenclature such as CSR, ESG and I&D, supplementing the ‘old’ language of VAR, ALM and P&L, these have not been the natural habitats for many actuaries. But actuaries can adapt and evolve – even those of us with a longer career behind us than ahead, especially if we have not exactly followed the pathway laid out all those years ago!
I am therefore firmly of the view that an actuary can make a positive contribution to any Boardroom … certainly those individuals with the right blend of skills and experience, emotional intelligence, adaptability and an interest beyond their technical heritage. All of which will help the right actuary bring informed insights and diversity in thought, as well as intellectual rigour, to Boardroom debates. For my own part, I am very much looking forward to this experience as I retire from my full-time actuarial work and move into a plural/portfolio career in the Boardroom.”
CN: Jeremy makes some very interesting and thought-provoking points. I wholeheartedly agree that actuaries can be relevant to the Board and bring a unique perspective. Over the years, I have worked with many actuaries who sit on the Board and there are common themes to their success. Those who enthusiastically embrace change and evolve; those who focus on not only sharpening their technical expertise but also their communication and leadership ability; those who are passionate about highlighting the relevance of the actuarial profession and championing progression into emerging fields, tend to be those who differentiate themselves and are most successful in securing (and thriving in) a Board appointment.
If you would like to discuss this article, market trends more generally, or to have a confidential discussion about your own hiring challenges and plans, please do not hesitate to contact Clare via email@example.com or +44 (0)7483 015591