Nick Spencer and Nico Aspinall explain how the profession can expand into new domains and retain its relevance in a changing world
In his June 2020 presidential address, Tan Suee Chieh said: “This is a call for an open, imaginative and creative exploration of the domains we can work in and influence, given who we are and our DNA. We want to be recognised as actuaries and analytical problem solvers, not only in our core fields but also across a wide range of domains, wherever our unique attributes can add value.”
Project New Horizon has identified the growth of new actuarial domains as crucial for the profession’s future success. Actuaries are needed to help solve an abundance of problems – yet the successful creation of new actuarial domains remains rare.
If actuaries are so useful, why is it so hard to create new domains? This is both a missed opportunity and a threat to our profession’s vibrancy. We risk stagnation and decline if we cannot outpace the medium-term shifts in demands for actuarial work, such as those projected for UK defined benefit pensions and the substitution of artificial intelligence. Those involved in Project New Horizon spent some time thinking about how to make this easier. We must get this right.
Of course, there has been success. General insurance took off 30 years ago, and it’s now impossible to imagine it without actuaries. In some countries, such as Australia, actuaries are a key component of banking. In Africa, innovative and entrepreneurial actuaries are found in many new and evolving companies.
However, these are limited case studies, and it has been a struggle to scale up such efforts.
How can we learn from these experiences and make them more widespread?
Project New Horizon identified three dimensions for action:
1.Creating fertile ground – ensuring new sectors know that actuaries exist and can make a vital contribution. Ideas included:
- Developing a growth theory for new domains to support each step of the progression, from forming beachheads to full-scale occupation
- Using PR to enhance perceptions of actuaries and their unique attributes
- Consistently supporting initiatives with large potential (for example data science)
- Introducing regulation that distinguishes between (reserved) statutory and non-statutory roles, simplifying the effort required to become a pioneering actuary.
2 Supporting the seeds – helping pioneering actuaries survive in small numbers as they carve out actuarial niches and demonstrate the value that we add. Ideas for this included:
- Creating networks and mentoring groups to enable better knowledge transfer – especially technical jargon
- Identifying knowledge and skills gaps to better support individuals in their learning Incentivising the retention of wider field entrepreneurs so that they remain within the profession
- Bringing people who are later in their careers into the profession, for example via a fast-track one-year qualification for experienced individuals and those with backgrounds in suitable professions.
3 Increasing the number of seeds –getting more actuaries to join entrepreneurial efforts, either on their own or by supporting emerging beachheads.
Ideas for this included:
- Highlighting and celebrating case studies of exciting work in new domains
- Making sure all actuaries are embraced as ‘real actuaries’
- Identifying spaces that have an excess supply of actuaries and supporting these actuaries to transition into new domains
- Improving support for people who are changing career
- Getting the message about flexibility out early to graduates and at qualification.
Our public interest duty will be enhanced if more actuaries are engaged in tackling a broad array of real-world problems. To reach new domains, we need to celebrate and embrace pioneers and innovators, and stop suggesting they’re not ‘real actuaries’. We must move beyond the mindset that initially criticised the COVID-19 Actuary Response Group for commenting on real-time data without waiting for long-term data to emerge.
We can only succeed if we understand that an actuary is not just someone who works in pensions or life insurance, but someone who applies a skillset, using ethical conduct and professional judgment.
These ideas are at an early stage, but new domains don’t just happen – we must make them happen. We hope that you will join Project New Horizon members in supporting and encouraging the IFoA in these efforts. Our future depends on developing and applying our skills in broader domains, as this will grow, invigorate and cross-fertilise our profession to benefit our members, our clients and our futures.
This is the third in the series of articles contributed by members of Project New Horizon; the first article in the series can be found at bit.ly/Actuary_PNH
Nick Spencer is a Council member and the founder of Gordian Advice
Nico Aspinall is founder of Nico Aspinall Consulting
Image credit | Getty