Credentialing: The Process of Realizing It's a Problem - UPDATED

               I have come to the realization that the way people approach and think about credentialing in 2015 needs to change. This call for change, that I have a great desire to see fulfilled, has come a long way since my initial feelings about those who create certification process for actuaries. I initially was a little mad about how hard they make the credentialing process, but later realized that it wasn't that they thought they were too smart, but rather it was from the wrong perspective. Eventually I realized that the way we think about credentialing, or gaining certifications in general, in 2015 is way far off of where the focus should be, and that this was the real problem that I was trying to address. More and more evidence became clear to me that inappropriate stigmas, dogmas, and ways of approaching credentialing existed when I started to do some research to historical time periods and ideologies which we discussed during our rhetoric and civilization class at BYU. After receiving feedback from classmates on my blog posts as well as in class I was able to come up with a presentation that I think anyone can relate to in some way, and feel a little bit of the need for the change that I see.

                I think with clear communication and applications to important lessons from history, others will see the need to make some changes to the world of certifications and credentialing. This is not just a needed change within the actuarial world, but in the world as a whole. 

Small Piece of Paper: Big Problems

This video wraps up some of my thoughts on the perception that future actuaries need to go through the same process that the preceding generations went through to become certified.  Although this is a very specific topic to my field of study I hope that you can't take away some of the highlights to some of the more general dogmas with regards to credentialing. (Some of the other students in our class have done their videos/blog posts about this topic.)

(Hopefully this video updates soon so that it doesn't look as raw as it currently does. Either way, Enjoy!)

Don't Tell An Actuary He's "Too Smart"

            I never back down from a challenge. As expected I have received a lot of pushback to my new ideas surrounding the certification of actuaries from a couple of actuaries who have been around the block a few times. As I previously discussed in my last post, I feel that actuaries in general have a mentality about them that is almost unavoidable in feeling “smarter” than others. I have felt this in myself from time to time as I tirelessly work and sacrifice my time to pass actuarial exams. When I do pass them. I too can sometimes become “big-headed”. It is a vicious cycle that needs to be stopped.

            This semester I have had the opportunity to take a class from a visiting Actuary. His class is amazing and his insights are great, as there aren't any fellowship actuaries currently teaching at BYU. I asked him what he thought about the exams, and if this dogma of being “smarter” than others existed, and was leading to the difficulty of the exams. He quickly shot me down, and stated that the exams are not a product of a better-than-the-world mentality, and that they have to be difficult to ensure actuaries know what they are doing. A response I expected as Joe’s comment suggested.

            I also messaged an actuary on LinkedIn who is in a group with me titled, The Entry Level Actuary. He responded almost identically to my teacher, saying that no such dogma existed among professional actuaries, and that the exams should be harder if anything else.

            So was I completely wrong? Perhaps. But I think it is also fair to suggest that those I talked with about this issue have a skewed frame of reference in which they would be unlikely to respond in any other manner than in which the one they already have. These were two men who had sacrificed many hours to take 8-10 actuarial exams, sacrificing time from family, friends, work, and school work to accomplish professional goals. They aren't about to say that the exams they sacrificed over are too hard, and especially that they are hard because of some kind of poor mentality among actuaries.

            The world is changing, and because of this there are more people out there that could be actuaries but can't because of an outdated thought about the requirements. Actuaries of the future need to change their frame of reference and see that more can be done to allow those who are able to be actuaries to become certified. 

Being "Too" Smart

                Actuaries have a running joke about the accounting CPA exam in which they claim “CPA” stands for “Can’t-Pass-Actuarial-Exams”. As an aspiring actuary I think that this joke has some actual weight to it, in the sense that passing actuarial exams is a very difficult process. The actuarial exam process is the reason why many people don’t ever consider pursuing a career in actuarial science, and why a lot of people haven't heard of an actuary. However, I have recently heard it wasn't always like this.

                The exams used to be a lot easier. In turn, more people passed the exams and became credentialed actuaries. Because of this there were more and more actuaries that didn’t really know what they were doing on the job, but had become credentialed by memorizing a few formulas. The organizations that administer the exams have “solved” this problem by making the exams now a days ridiculously hard. It is common knowledge that to have a chance at passing an exam you must study 100 hours outside of your class time for every hour of that specific exam. My knee jerk reaction to the difficulty of the exams is to demand a change and to make these exams easier, but recently I have realized there is a larger issue at hand.

An unfortunate dogma I've felt in the Actuarial field

Actuaries write these exams. There is without question somewhat of a “pride” factor that has caused these exams to evolve into what they are today. There is a sense that those who make up the Society of Actuaries want as few as possible to make it to the top credential. Making the exams easier isn't going to change this way of thought. Actuaries everywhere need to embrace those who may be slightly less mathematically gifted but still work hard enough to become a practicing actuary. 

Beyond The Numbers: Becoming A Successful Actuary Requires Communication

                 Congratulations! There are few who actually discover that actuarial science exists, let alone actually decide to pursue a career as an actuary. You and those who typically find this field either know someone who is an actuary or hear about it in an accounting, finance, or economics course. Most likely you possess a true love of mathematics and problem solving which has driven you to pursue a professional career as an actuary. Perhaps one of the reason’s you have chosen to pursue actuarial science is because you shy away from certain interactions with other people. This however is one of the biggest dangers you can make as a newcomer to the actuarial field. Having strong analytical skills is obviously essential to being an actuary, but few who are new to the field realize the necessity and daily uses of communication that actuaries are required to master. There are certain skills which are completely non-analytical in nature that are needed in order to land a first job or internship, be successful in that job, and continue to progress toward a successful actuarial career.      

              Depending on how familiar you are with the history of actuarial science may be a factor as to how prepared you are for the communication requirements of the field. Actuarial science can only honestly be traced back to the 1700’s where a London man named James Dodson made the first steps in the direction of modern day actuarial analysis. His work for the society Equitable Life is the corner stone of the current actuarial industry. Dodson was among the very first to use this science (math and statistics) to determine premium rates and long-term policies for insurance. This was not only the start of the actuarial field but also the predominant stereotype of actuaries as being nonsocial, number crunching, introverted, and math-obsessed individuals. If you haven’t already heard or learned about this stereotype you will. The problem isn’t knowing about it, the problem is found in how you feel about it. Finding any kind of comfort in this stereotype in helping you to decide whether to be an actuary or not is a mistake, and will start to instill the dangerous lack of emphasis on the non-mathematical skills required to become successful as an actuary. Although this stereotype may have some backing from the history of actuaries from the past, over the last few decades and especially looking ahead into the future, this preconceived notion about actuaries could not be further from the truth. More and more actuaries not only need to communicate internally and externally in their places of work, but must do it effectively or risk losing their companies clients and even their job positions.

Importance for Student & Entry Level Actuaries

              For obtaining internship or entry-level work, which is becoming extremely competitive, communication and persuasion are essential in helping companies to choose to hire you. If any student entering into the actuarial science world conforms to the stereotype of the actuaries from the past, no matter how good at math or statistics they are, they may never even get their foot in the door of the modern actuarial businesses of the world. There are currently many actuarial students all over the U.S. applying for internships that have analytical experience, some actuarial exams passed, and a high GPA (which are the top three things to have on an actuarial resume), yet still struggle to obtain an internship or job. The reasons for their struggles are not because of a lack of analytical ability, but rather an inability to “sell” themselves in the interview process and help recruiters see the value that they can bring to a company. The actuarial interview experience is unique and isn't something that you will likely be able to take a class on. It is absolutely necessary for an actuarial student to ask mentors, teachers, and recruiters as early as possible about ways to grow their persuasive interview type communication skills.

Importance for Aspiring Actuaries

             The need to be persuasive and communicate at a high level goes far passed your first interview and securing that first job. Consulting actuaries’ most common circumstance for communication will be with clients. Many of these interactions will be through email, phone, or even video calls for the lower level associate actuaries. For the partners or fellowship actuaries, a lot of travel and actual face to face contact with clients is necessary. These face to face interactions is where the persuasion takes place. It is here that the client really needs to feel like they can trust the firm that is analyzing their risk. It is the actuary’s job to persuade them that their company needs their risk minimized by the actuary’s specific consulting firm and why they aren't better off going to another actuarial consulting firm. This interaction between the head actuaries and the clients is at the heart of the business of consulting actuarial work. It is also important that not only skills of persuasion can be applied in these situations, but that clear communication, with respect to the clients understanding of analytical terms, is achieved. Without strong communication and persuasion skills it is harder to accomplish the goals of these personal interactions.

              Actuarial clients need to feel like the work they are having done for them is valuable and being done at a competitive level. They need to have no reason to feel like they should doubt the actuaries’ abilities. When they do, conflict arises and it is the actuaries’ job to persuade the client to believe that the services they are receiving from the actuaries’ respective firm are the best option for them. An example of such a situation is given below in a made up dialogue:

• Client: “I have seen that there are other actuarial firms offering similar analysis for less pay, and I am thinking about switching to them because I have heard that their quality of work is quite comparable and even better than yours…”

Here you might pause and ask yourself “How would I respond to these concerns?” to evaluate how prepared you currently are to take on some of these future challenges that require persuasive communication skills. Below is an example of what may be an appropriate response by an experienced actuary:

• Actuary: “I see. If I had heard that same thing and was in your shoes, I too would be questioning who I was paying to analyze my risk. However, I can assure you that ____ services are not only more efficient, but that the quality of work that is done throughout the whole company at ____ is far superior to ___­_. Not only would it be a mistake to switch, but because of how sought after our services are it might be too hard for you to come back to ___ if you do decide to leave. It would be wise to stay with ___ where your work is done at a higher standard and where you are able to interact personally with the people working with your company’s risk.” 

Once conversation is flowing and the bulk of the conversation is in the actuaries court that is the time he has to pounce, making sure to do all he can to please and retain the business of the customer. Providing and stating evidence clearly, with a pleasing style, helps his argument to put the client at ease, minimizing the amount of questions of doubt that may arise in the clients mind as the conversation goes on. Tone and delivery must be friendly, timely, and confident. As the actuary focuses on these aspects of his style he will undoubtedly leave this last meeting with a firm handshake and an assurance for continued business with the client through the upcoming year. This is only one example of how essential communication and persuasion skills are to the actuarial profession.

Conclusion

           Although most of the focus for the next few years of your life, if you continue to pursue actuarial science, will be on passing multiple national actuarial exams and learning new ways to analyze risk you must not forget how important the interpersonal skills of persuasion and clear communication are to becoming a successful actuary. From obtaining your first job to being effective at the work place, your need for effective communication and persuasion skills starts now. Don’t put off working on your interview skills, or facing your current boss, coworkers, and clients at your current place of work. These moments are the best opportunities to grow these skills which, with no exception, are absolutely necessary for this field no matter where you are at on the path to obtaining your credentials and licenses as an actuary.

Works Cited

            Interview with Justin Owens - Asset Allocation Strategist at Russell Investments – 12/3/2014

            Choike, J. (1980). The Pentagram and the Discovery of an Irrational Number. Two-Year College Mathematics Journal, 11(5), 110-315. Retrieved December 2, 2014.

Actuarial Career Seekers Notice

Audience

There are few who actually discover that actuarial science exists, let alone actually decide to pursue a career as an actuary. Those who typically find this field either know someone who is an actuary or hear about it in an accounting, finance, or economics course. Of the individuals that find actuarial science, those with a true love of mathematics and problem solving actually decide to test the waters and pursue a professional career as an actuary. One of the biggest dangers these newcomers will face are the stereotypes and the lack of emphasis on the non-mathematical skills required to be successful. Having strong analytical skills is obviously essential to being an actuary, but little realize the necessity and daily uses of communication that actuaries are required to master. There are certain skills that are needed to land a first job or internship, be successful in that job, and continue to progress in an actuarial career that are completely non analytical. Those entering into or deciding whether or not to pursue a career as an actuary need to consider that being able to be persuasive in their speech is necessary to their overall success. 

Context

The path to becoming an actuary is a long one. There are multiple national certification exams that one must complete, along with other required national course work, in order to become a certified actuary. Because of this long road to certification it is valuable for any student considering the path of actuarial science to get as much information as possible, to help themselves decide if it is really right for them and before taking too many of these excruciating exams. Knowing the history and the necessary role that communication could play in their lives is very valuable to students considering this field of study in order to prepare better for what may be ahead.

Rhetoric

The stereotypical math obsessed, non-social actuary is becoming a thing of the past. Many successful actuaries are business consultants, no longer crunching the numbers but simply working with clients every single day. For an actuary knowing what to say and how to say it could be the difference between signing a client, vs losing a client. This type of speech also is important in landing entry level jobs which can be competitive, and those who lack the communication skills (although they have the necessary analytical skills) will often be left out. Effective internal and external communication/persuasion are not optional for successful actuaries, they are absolutely essential.

History

The history of the science itself is important for this audience to understand, but more importantly the history of the “actuary” himself is more important to understand. This background can shed light on whether or not they fit the mold of an actuary, and put to rest what is true and what is false when it comes to the personality of the actuary. History can be very telling for someone trying to make a decision on whether or not to pursue actuarial science.

Plan

After outlining some of the things above I feel that I understand what is going to be most valuable to someone entering this field of study and what things I need to share more of. I need to emphasize more on how knowing rhetoric and history within the field can help you land your first job. In my experience that is where I have seen it be most helpful to this point. Before really applying persuasion into my interview process for example, I was not successful in securing an internship. These type of experiences and topics will be more applicable to those just starting down the road of actuarial science.

I may also spend a little more time researching some history of the science, as even those who have been students in the major for quite some time can struggle in answering the questions “What is actuarial science?” More background and history on the subject may help those who read make a more informed decision on whether or not this is the career path for them. With this in mind I think I can develop a powerful and helpful paper for those interested in pursuing actuarial science. 

Actuaries: Unknown & Misunderstood

Actuarial science, the science of applying mathematics, statistics, and other financial thoughts to evaluate and assess risk, is relatively new to the world. This is mostly because the work actuaries are involved in apply to many things that have only recently been developed within the past few centuries. Although its specific application to our day only dates back to the 19^th century, there are many instances where those in both recent and distant past have used different mathematical ideas or “models”, per say, to evaluate decisions and help give reason to important decisions.

Distant Past

A depiction of Thales

The Greeks are often most associated with the formation and systemization of mathematics as a whole. Thales might be someone who you can compare to being an actuary in his day. Thales is credited with being one of the first to use deductive reasoning with respect to mathematical practices. This is the heart of actuarial thought, using mathematical and statistical methods to make real world decisions and analyses. The idea of using mathematics to help make real world “non-math” decisions, versus (for example) just how to best construct a good building, continued to grow throughout the middle ages, renaissance, and into the 17^th century. In 1762 a London man, James Dodson, made the first steps in the direction of modern day actuarial analysis. His work for the society Equitable Life is the corner stone of the current actuarial industry. James Dodson was among the very first to use science (math and statistics) to determine premium rates and long-term policies for insurance.

                                  Recent Past

                My actuarial mentor, Justin Owens, who I met on my LDS mission in Seattle Washington has been around the block in the actuarial field. In talking with Justin for a good half hour I was able to learn a lot about the recent history of the field as well as the near future. Many actuaries are portrayed or stereotyped as being math obsessed, socially inept people. This has always been one of my worries about the profession as I feel this doesn't really describe me. Justin helped to put my worries to rest by explaining that the traditional actuaries of the recent past tend to fit that description better than what the modern day actuary has become. Instead of simply crunching the numbers and figuring out how much something should cost, many actuaries today are business consultants, talking daily with clients and having to be professional in daily business interactions with others. Justin explained that not only are the applications of the science growing with increases in data and technology, but that the actuary as a person is having to become a much more well-rounded business professional than in the recent past.

Sources:

Interview with Justin Owens - Asset Allocation Strategist at Russell Investments – 12/3/2014

            Choike, J. (1980). The Pentagram and the Discovery of an Irrational Number. Two-Year College Mathematics Journal, 11(5), 110-315. Retrieved December 2, 2014.

Actuaries Have... Style?

On the final stop of a string of flights around the country, the head actuary of a leading firm in the industry prepares to meet with the last of his clients. It is the end of the fiscal year and customers are eager to see where their money is going, and the value that actuarial risk management is bringing to their business.

            The actuary has been preparing for this end of year meeting all year long, each day of the year perfecting his communicatory style. His style will be important as he sits down and discusses business with his clients. The reports he has written all year and the work he has done with other actuaries has helped to prepare him to now orally deliver a confident and stylistic report. The actuaries’ stylistic goal is to please the client. This middle type of style – one set at delighting the hearers – is a skill that a head or lead actuary must have mastered by the time he meets with his clients at the end of the year.

           

            The first chance the actuary has to attempt to please his client happens before either of them opens their mouths. How he decides to dress will put an idea into the clients mind almost immediately on how much they can trust the work that his actuary is doing. A red tie can resemble intellect, but also can resemble dominance. Appropriate business dress for a consulting actuary should give off the message of confidence, but avoid going too far into the realm of arrogance and god-like prowess. Allowing his appearance to become too expensive, flashy, or “mighty” will negate much or what can be achieved through a powerful middle style in pleasing his clients.

            Once conversation is flowing and the bulk of the conversation is in the actuaries court that is the time he has to pounce, making sure to do all he can to please and retain the business of the customer. Providing evidence and clarity in his style helps to put the client at ease, minimizing the amount of questions of doubt that may arise in the clients mind as the conversation goes on. Tone and delivery must be friendly, timely, and confident. As the actuary focuses on these aspects of his style he will undoubtedly leave this last meeting with a firm handshake and an assurance for continued business with the client through the upcoming year.

Conflict Issues and Special Topics of Invention in Actuarial Science

Points of Conflict

There are two main situations in which conflict arises in the life of an actuary. The first of these situations is with clients. Clients need to feel like the work they are having done for them is valuable and being done at a competitive level. They need to have no reason to feel like they should doubt the actuaries’ abilities. When they do, conflict arises and it is the actuaries’ job to persuade the client to believe that the services they are receiving form the actuaries’ respective firm are the best that they can get. The second situation is when fellow actuaries or team members disagree on a process of a project or any other type of work being done at the workplace. Such conflicts arise often and usually end with a negotiation between team members, both having to make exceptions to let both people continue working in harmony.

Topics of Invention

                An example of the first of the two situations discussed above is given below.

Client: “I have seen that there are other actuarial firms offering similar work for less pay, I am  thinking about switching to them because I have heard that their services are quite similar to      yours…”

Actuary: “I see. If I had heard that same thing and was in your shoes, I too would be questioning who  I was paying to analyze my risk. However, I can assure you that ____ services are not only more  efficient, but that the quality of work that is done throughout the whole company at ____ is far  superior to ___. Not only would it be a mistake to switch, but because of how sought after our  services are it might be too hard for you to come back to ___ if you do decide to leave. It would be  wise to stay with ___ where your work is done at a higher standard and you are able to know  personally the people working with your company’s risk.  

Analysis

This actuary defends himself as well as his company well in this example using deliberative oratory. The special topics of invention of the advantageous vs the disadvantageous are show within his brief comparison between himself and the competition. He makes a clear statement and testimony that the client would be wise to stay with the actuaries’ company. 

Communication and Persuasion in the Actuarial Field

For those who have never heard of an actuary before: actuaries calculate and minimize the financial consequences of risk, using mathematics, statistics, finance, economics, and other areas dealing with risk management. Most actuaries work for insurance companies or large consulting firms. My interest in the actuarial field resides mostly in the consulting side of the industry, in which communication and persuasion skills are not just valuable but absolutely necessary in becoming a successful consulting actuary.

Consulting actuaries’ most common circumstance for communication will be with clients. Many of these interactions will be through email, phone, or even video calls for the lower level associate actuaries. For the partners or fellowship actuaries, a lot of travel and actual face to face contact with clients is necessary. These face to face interactions is where the persuasion takes place. It is here that the client really needs to feel like they can trust the firm that is analyzing their risk. It is the actuary’s job to persuade them that their company needs their risk minimized by the actuary’s specific consulting firm and why they aren't better off going to another actuarial consulting firm. This interaction between the head actuaries and the clients is at the heart of the business of consulting actuarial work. It is also important that not only skills of persuasion can be applied in these situations, but that clear communication, with respect to the clients understanding of analytical terms, is achieved. Without strong communication and persuasion skills it is harder to accomplish the goals of these personal interactions.

The actuarial field is very unique, especially the consulting side. It requires advanced analytical and interpersonal skills. Communication is mostly deliberative, but judicial and epideictic also play a role in actuarial profession. Those who can master both the required analytical skills, and these genres of communication can become very successful actuaries.

I became interested in becoming an actuary during my first semester of college after my LDS mission. I learned about what they did during a basic accounting class and it seemed to fit what I was looking for at the time. During my mission I saw the power of communication and business. This gave me a desire to find a career where I could combine my mathematical skills, with my growing communication and interpersonal skills. The actuarial field was a perfect fit!

The information I have shared today came from interacting with professionals in the industry, and others in information sessions and internship interviews for actuarial positions. This information is clearly valuable, and only increases my desire to continue pursuing this career path.