President's Message

Doing Well by Doing Good: Professionalism and the Continued Success of the Profession

Doing Well by Doing Good: Professionalism and the Continued Success of the Profession

By Shawna Ackerman

Just before Thanksgiving last year, Academy staff told me they would like the next installment of my presidential message by the first of January. So, here I sit in the heart of the holiday season thinking about what next to write. By the time you read this, it will be decidedly out of season. A Christmas Carol plays in the background; Jonathan Winters is narrating. The ghost of Jacob Marley has made his appearance to warn Scrooge and is lamenting his own misuse of life’s opportunities.

“But you were always a good man of business, Jacob,” faltered Scrooge, who now began to apply this to himself.

“Business!” cried the Ghost, wringing its hands again. “Mankind was my business. The common welfare was my business…”

As actuaries, the common welfare is also our business. Millions of Americans rely on the work that we do.

As noted in the Academy’s 2015 white paper Sustainability in American Financial Security Programs, “Financial security programs are important to a well-functioning society—in addition to making it possible to weather the financial effects of misfortune, they can improve the overall quality of life by providing peace of mind in an uncertain world.”[1]

Professionalism is critical to enhancing the success of financial security systems and is a key competitive advantage for the actuarial profession—both in terms of attracting younger people to the profession and for competing with emerging areas. It is widely reported that Millennials—generally thought of as those born between 1983 and 1994 (give or take a year on each side)—are socially minded and concerned with doing good. According to the 2018 Deloitte Millennials Survey, an overwhelming majority of Millennials (83 percent) believe that while profits are necessary and a priority, business success should be measured in terms of more than financial performance. They believe that corporations should set out to achieve a broad balance of objectives that include making a positive impact on society—e.g., the common welfare.[2]

A much smaller (and undoubtedly biased) sample of Millennials’ thinking was presented in the recent Contingencies feature “The Kids Are Alright.”[3] Each of the nine actuaries interviewed noted either the impact of technology and Big Data as an opportunity for actuaries or the importance of helping others—or both. Sherry Chan, chief actuary, New York City Office of the Actuary, stated “All this work has one common goal: to make sure the public is taken care of.”

While growth in the number of actuaries employed is not directly an Academy goal, we do want continued growth in professionalism and strengthening the actuarial voice. The future growth of the profession depends on being able to continue to demonstrate that it can effectively govern itself through robust standard-setting and enforcement of the Code. We will do well by doing good.

One sure way to diminish the value of the actuary is to forget about professionalism, or set it aside for expediency or a misplaced view of what it means to be competitive with other analytical fields—data scientists, for example. Several times I have heard people wondering if actuaries are, or will be, at a disadvantage because we have standards of practice whereas other specializations have less robust standards, if any at all. On the contrary, our standards and disciplinary process are a key and competitive distinguishing feature. Deciding upon and maintaining high professional standards through continuing education requirements, qualification standards, actuarial standards of practice and importantly, a Code of Professional Conduct, sets the actuarial profession apart and puts us at a clear advantage to protect the public interest and to gain and maintain the public trust for the important work that we do. Again, we’ll do well by doing good.

One of the actuarial standards of practice I use often—ASOP No. 38, Using Models Outside the Actuary’s Area of Expertise (Property and Casualty)—is a good example of a standard that provides the public and regulators with a demonstration of the actuaries’ value and commitment to professionalism. In the early 1990s, we had a situation where new technology and techniques were emerging to address catastrophe risk. The usage of newly developed catastrophe models was questioned; their impacts were significant. Catastrophe modeling analysts could have taken over the actuarial space for managing catastrophe-exposed risks. For the most part that did not happen. Instead, through a robust standard-setting process, the actuarial profession demonstrated its commitment to protecting the public interest and the common welfare, thereby maintaining regulatory trust. Similarly, as new technology and techniques emerge for Industry 4.0, I am confident that with the help of our digitally minded, technology-embracing and integrity-seeking Millennial members, the actuarial profession will respond with new standards as appropriate.

To remain competitive and relevant, we must make the users of our work believe in the value of professionalism. Because it is always easier to believe what you can see, we need to show them that value. As a visitor to the “About ASB” page on the Actuarial Standards Board website will learn, our actuarial standards of practice give “strong evidence to any interested observer that the profession serves the public in an effective and responsible way. … Written standards of practice, coupled with written provisions for disciplining members, show that our profession governs itself and takes an active interest in protecting the public.”[4]

The common welfare of ordinary people is made better by analyses done with skill and care, effectively communicated. While I may have started this message out of season, professionalism is always in season.

 

References

[1] http://www.actuary.org/files/PIC_Sustainability_White_Paper_June2015.pdf (last checked Feb. 12, 2019).

[2] https://www2.deloitte.com/global/en/pages/about-deloitte/articles/millennialsurvey.html (last checked Feb. 12, 2019).

[3] Contingencies, November/December 2018, pages 21-29; quote from page 29.

[4] http://www.actuarialstandardsboard.org/about-asb/ (Last checked Feb. 12, 2019).

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