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The Actuary The magazine of the Institute & Faculty of Actuaries

Actuary for the millennium

When I first decided to write an article on how the actuarial profession may change in this millennium, I was not aware of much evidence to suggest that others were thinking the same way as me I did not know if anyone else was concerned about the way actuaries are perceived, or whether people were worried about the fact that we as an industry are not recruiting the best graduates.
As luck would have it, while I was writing this, a copy of the Institute’s journal arrived, containing a paper on the vision and values of the actuarial profession, and since then there has been a commendable editorial on the subject by Raj Mody in the April 2000 issue of The Actuary. At least this means that the profession is aware of the issues, and is encouraging members to make a difference. While I agree with Mr Mody that we must become ambassadors for the profession, I feel that the area that is vital to concentrate on in creating an actuary for the millennium is recruitment.

Perception is everything
Actuaries traditionally do not have the best reputation. A considerable proportion of people outside the industry to whom I speak have never heard of an actuary, and many of those that have are split between knowing that ‘actuaries are boring’ and ‘actuaries earn a lot of money’. I have no problems with being associated with the second of these (true or not), but it is not ideal for a young man (speaking from personal experience), when introducing himself at parties, to be searching desperately for an adequate description of what he does without using the words ‘actuary’ or ‘pension’.
So why is it that I find it so difficult to tell people what I do? Admittedly, it is not the easiest job to describe in a sentence, but I think the crux of the matter is worrying about how I will be perceived. A wise man once said, ‘Perception is everything’, and I find myself in a vicious circle of ’misperception’ if others like me are unwilling to stand up for and publicise the profession, how is the situation ever likely to improve?

Who cares?
It could be argued that it doesn’t matter what the public thinks, as not many people will come into direct contact with an actuary on a professional level. Even the Institute’s paper on vision and values states: ‘How the profession is perceived by the public is not critical.’ I could not disagree more! No one is born an actuary. We were all once ‘members of the public’ and we made a choice to enter the profession. Deciding which career path to take is greatly dependent on how you perceive a profession. I am not suggesting that a career in pensions, for example, will ever sound the sexiest and most glamorous option, but a lot more could be done to educate people most importantly to students who are in the process of choosing a career about what we do.
We (actuaries) surely want the industry to become bigger and stronger. Indeed, this was the purpose of the Institute’s paper. I believe that the key to making this happen is to make sure the right people are entering the profession.

The actuarial secret
It is impossible for the best people to be entering the industry if they have never heard of an actuary. I believe this has been a stumbling block in the development of a very traditional and strong profession. I only graduated a year and a half ago and I know that, back at university, when I was talking to my peers about careers, very few had heard of an actuary. It seemed to be a profession that was whispered about in the maths lecture theatre, and nowhere else. I didn’t do a mathematics degree, and fortunately learned of the ‘actuarial secret’ from a relative who works in finance.
Despite the job fundamentally being mathematically complex and requiring quite a high level of mathematical understanding (not least to pass the exams), I am convinced that many graduates would not have too much trouble doing the everyday sums encountered in the job, especially now that most of the routine calculations are done by computer. However, not everyone has the qualities needed to deal with people effectively, or the dynamism to take the profession forward in new directions. I agree with a comment in the vision and values paper attributed to Mr CD Sharp, in which he suggests that the ‘mathematical sieve’ through which everybody has to go is one of the reasons why the industry is restricted. He goes on to say, ‘I have the greatest admiration of mathematicians, but I suggest that a major degree in mathematics may indicate a narrower educational experience than is necessarily good for the profession as a whole’.
Many degree courses prepare you for your career at the same time as teaching you about your chosen field. A large part of my engineering degree was made up of individual and group projects, which involved a lot of teamwork and research, and presentations were part of the course. Add this to subsidiary courses in communication skills and accounting and you have a useful head start when it comes to the business world, whichever career you choose. From what I can gather, many degree courses seem too ‘pure’, and may be too focused on teaching people about the chosen subject and little else. I must be careful not to generalise (as course content obviously varies from one university to another), but I would say that maths currently falls into this category.
This is probably changing as degree courses evolve, and more maths courses may include the teaching of soft skills so, while I am not trying to suggest that maths graduates should be shunned completely, I would say that those with no experience of studying these skills may not be suited to a career in the actuarial field. I feel that mathematical ability is not the be-all and end-all any more, and I do not believe a good mathematician necessarily makes a good actuary.

The actuary for the millennium
I have no wish to offend the high proportion of actuaries who come from a purely mathematical background, but I am trying to raise awareness of valuable skills such as initiative, problem solving, teamwork, and communication, that I believe would be found in abundance in graduates from non-mathematical backgrounds. People who possess these skills would be an asset to any profession, and these are the people that the industry should be trying to recruit the people who would be leading the industry forward into new directions and raising the profile of the profession. The responsibility for such recruitment ultimately lies with the employers, but the Institute has the power to give a tremendous amount of help.
The Institute’s latest careers brochure, The best kept secret in the financial world, is a giant step in the right direction, making the profession sound incredibly attractive I hope it is widely distributed. My only gripe is that nine out of the ten people talking about an actuarial career within its glossy pages are maths or actuarial science graduates. I do not think that a student on a non-mathematical degree course would see this as very encouraging, and I am sure it is an exaggerated representation of the proportion of mathematicians in the profession. It does contain suggestions that the job and training ‘aren’t as mathematical as you might think’, and that as far as maths degrees go, ‘you don’t need one at all to become an actuary’. I know this is absolutely right but possible applicants may not, and it is slightly careless to contradict an important message by inferring that 90% of the profession does, in fact, consist of maths graduates.
This should be an exciting time to be an actuary, with branching into other areas looking more and more a probability. What we need now is for the right people to be entering the profession at the bottom to get involved in this expansion and take it another step further. The key to this is communication I believe the Institute (and the recruiting companies) needs to be doing more around the campuses to raise awareness and interest in an actuarial career, especially outside the maths departments. I feel that the vision and values paper is an important step, as at least it shows that the issues are being considered, but more positive action along the lines of the careers brochure is needed to improve the image of the profession.
I am sure that most people would agree that the actuary for the millennium will be very different to Dr Edward Sang (proposed as the actuary of the last millennium in The Actuary April 2000). I don’t think that anyone imagines the actuary for this millennium spending his or her time calculating log tables, and this serves as an illustration that the changing nature of the profession calls for a changing nature of recruitment.