The new IFoA president Jules Constantinou discusses the opportunities, threats and potential areas of development for the actuarial profession with Francisco Sebastian
Jules Constantinou claims he does not have a presidential theme. After discussing his ideas with him however, I believe that he is humbly understating the robustness of his plan.
Constantinou grew up in South Africa, graduating in 1982 from University of Witwatersrand with a Bachelor of Science in actuarial science and mathematical statistics. It was the first time that the university had offered the course, and he does not hide his pride at having been a pioneer. His professional career kicked off in Cape Town with Metropolitan Life, working in investments and employee benefits. In 1991, after earning his actuarial qualification, he moved into reinsurance, where he has developed his career with Gen Re. The ebbs and flows of corporate life triggered a move to London in 1999, which brought room for innovation; there, he became part of the then-nascent industry of financial reinsurance. After a stint in that role, in 2003 he took up a new opportunity in traditional reinsurance. Since then, Constantinou has continued to successfully climb up the corporate ladder: he became head of marketing and business development for UK and Ireland, and has been regional manager since 2014.
"I am a firm believer in the actuarial skill set" and "people should volunteer for things that they are passionate about" could each be Constantinou's motto. He is guided by these principles, and his long track record of volunteering, developed in parallel with his professional career, backs such conviction.
Most actuaries volunteer on areas within their fields of expertise. "Conferences and similar events provide great opportunities to get involved," Constantinou affirms. However, his path took him beyond the boundaries of his career. In 2006, the IFoA created the Risk Management Members Interest Group. For Constantinou, this offered "an exciting opportunity for actuaries to employ their skills in an emerging area". His intuition and interest in risk management was proven right; the original interest group evolved into a Practice Board that covers Enterprise Risk Management. Subsequently, he continued to make contributions to the field, chairing the CPD and Education sub-committees, that developed the CERA qualification. These were crucial steps towards creating the Risk community, which he then led as deputy chair and chair of the Risk Board. In 2013, he was asked to chair the Health and Care Board.
Asked whether volunteering has helped with his professional development, Constantinou explains what he has learned about risk management, and how he has developed soft skills, mobilising people and networking. "That is one of the key things about volunteering; it is a diverse group of people getting together, each of whom brings a different perspective for the benefit of our profession".
Areas of opportunity
Constantinou asserts he is "among the most optimistic on what actuaries can do with their skill set" - and he has been supporting this view from Council since he was elected in 2015. However, his positive views are paired with a great dose of reality when it comes to developing the actuarial skill set beyond the traditional fields. On the one hand, in his view, the Actuaries' Code is the main tool to promote the profession. On the other, he gets the impression actuaries "tend to feel that, if they are not experts in certain topics, they won't get into them". He challenges that attitude, praising the strength of actuarial training: "problem solving, understanding the big picture, drilling down into the detail and then coming up with specific solutions".
His view is that actuaries can contribute, not just to the industries they work in, but "to society more broadly, bringing in concepts that others, looking at the same problem, may not see". As he explains, actuaries' role in "figuring out how financing the last stages of human life can be achieved or helping people grow old comfortably and gracefully" provide great examples of this. The wheels are already in motion, as the case of those actuaries focused on pension consulting to individuals shows. He met them through the Association of Consulting Actuaries and finds it interesting "to see how their job has morphed from being defined benefit consultants to becoming financial advisors. They help people understand the decisions they need to make in the accumulation phase, and when they get to the point of decumulation, advise on how that phase of life can be sensibly dealt with."
The demographic environment is a force that increases the need for actuaries. The ageing population phenomenon will continue to create challenges in most countries. Constantinou foresees that both public and private sectors will have to come together to find solutions for this issue. In this context, the work of professionals who understand data, simplify it and build models that provide options for decision makers is very valuable.
Another interesting perspective that actuaries bring is the ethical angle on data management. "Using data in the wrong manner can cause big harm to society," he states. To illustrate this, he refers to insurance, where injudicious use of data could result in parts of society being excluded from coverage because they are deemed too high risk. Actuaries can help address this risk, "bringing a thorough understanding of the data under the surface". The IFoA has recently announced a joint initiative with the Royal Statistical Society on the ethical use of data.
Constantinou's optimistic views do not distract him from addressing the challenges the profession faces. His interactions with actuaries in several industries make him question: What room for growth does the profession have? This is a critical challenge for all actuaries and for the IFoA. Half joking, he mentions that although www.willrobotstakemyjob.com gives just a 21% chance of that happening and predicts growth for actuaries in the next five to 10 years, the profession must make every effort to stay relevant.
He refers to data science as an example of the need to do so. With IBM expecting more than 3 million professionals in that discipline by 2020, compared to just 150,000 actuaries in the world, he wonders whether we are going to be swamped by another data profession. As president, he won't stand still. "We are addressing that gap in our education, currently pointing members who are interested in developing their data science knowledge to a few recommended courses. In the longer term, many actuarial bodies around the world, including ourselves, will be thinking about some data science certification. We also need to find an answer to the question of what skills do actuaries bring to the data science profession and provide educational opportunities for our members in that field."
There are also other potential threats and opportunities that we do not fully understand, such as genetics, environmental topics or the implications of 3D printing. These and other unknown concepts can bring societal changes, with potential big impacts that we need to stay alert to.
The role of Council and the president
It is not surprising that Constantinou emphasises the importance of revamping the curriculum to seize existing opportunities and to tackle challenges. He stresses the crucial role that Council plays in ensuring that our education remains flexible and relevant, and sets out the vision that the IFoA has for the future education of actuaries: "Once an individual has achieved the Associate level of qualification and wants to specialise in any area, there must be courses that can help them achieve that. For example, in addition to life and general insurance, pensions, risk and investment, there could be modules on data analysis, marketing and business management. We are moving on that quite quickly."
As we continue to discuss the future of the profession, Constantinou refers to the role of Council in developing the current strategy in 2011 and then revisiting it in 2016. He shows again his team-playing skills, crediting the CEO and IFoA executive team for its successful execution. Such clear explanation about the role of Council and executives is begging the question: how can the president make an impact?
Constantinou has defined three clear areas to which he can contribute. First, creating an environment within Council and the IFoA that encourages discussion and facilitates execution of the strategy. Second, being an ambassador for the profession, both internally and externally. This is not limited to interactions with the financial services industry, but also with other potential employers in the public and private sectors. And last, but not least, helping "maintain our professional standards and preserving the ethics in the work we do". The team effort resurfaces, as he states: "I will do as much as I can, but it is not solely up to me as an individual to do it, but with the collaboration of Council and each one of our members."
Globalisation and diversity
I am keen to find out more about Constantinou's view on the IFoA's swift global expansion. He is crystal clear: "We are a member organisation. In order to be successful, we have to continue to be relevant to our members in the UK and other parts of the world. To achieve that, we should continue to ask questions to our members, employers and educators of actuaries, to actually understand what they need an actuary to be and to support that going forward."
Constantinou has a very down-to-earth approach, acknowledging that "in different markets, those questions and the responses may be different. We need to reconcile the heterogeneous landscape with keeping a homogeneous approach to what an actuary does in different parts of the world."
As we discuss the needs in different parts of the world, diversity becomes central. But how can this be achieved in practice? Constantinou highlights the importance of keeping the profession accessible as means of enhancing diversity. "Some people in certain countries, sometimes due to demographics, cannot access the same education opportunities as others, which prevents them from becoming actuaries. Therefore, the problem starts at access level, and that is where we must focus our attention, to ensure diversity of our profession in the longer term".
The actuarial bias had to arise at some point in our conversation; this would not be a real interview of an actuary without the unavoidable question: how do you measure success in your role as president? In true actuarial fashion, his response is brief and to the point: "I would like to see an actuary on the board at Amazon. I would like to see that the numbers of scholars and students seeking to be an actuary have doubled. Whenever there is a question on pensions, healthcare or other topics of actuarial relevance, I want the IFoA to be the first place that the government goes to. And finally, I want our members to be happy with the services that they receive today and positive about the future. Unfortunately, I do not know how to accurately measure this last point."
Having heard about Constantinou's successful experience, both professionally and with the IFoA, I could not help asking him for advice that he could give to students or actuaries in the early stages of their career. Not surprisingly, the responses summarise his views about the actuarial profession, education and the role of the IFoA.
"Be confident. Our training and skill set is robust and can be applied to different situations and industries.
"Be brave. The younger you are, the more risk you can take. And if you need support from the IFoA to move into other areas, do not hesitate to reach out. But most of the time it is up to you. Just go for it!"