President's Message

Planning Your Course

Planning Your Course

By Bob Beuerlein

Golf fans were just treated to a Masters for the ages (which saw Sergio Garcia win his first major—in a playoff, no less) and are eagerly anticipating the U.S. Open. These tournaments bring together some of the best professional golfers in the world. But they’re playing a different game of golf than typical weekend duffers. In addition to having superior physical skills, these professionals also possess exceptional mental processes. When preparing for a golf tournament, they analyze the course, sometimes going as far as researching the thinking of the golf course architect. Each golfer plans where he wants to hit each shot on each hole to optimize his score. This planning and thinking separates pro golfers from the amateurs.

As professional actuaries, the planning processes we use are similar to those of a professional golfer. I would agree that we all have good basic actuarial skills to perform our work, as exhibited by our actuarial associateship or fellowship designation. But the mark of good professional actuaries is that they plan their work while taking into account the principles contained in the Code of Professional Conduct, the actuarial standards of practice (ASOPs), and the U.S. Qualification Standards.

A key part of planning your work is first determining that you are in fact qualified to perform it. To do that, it’s important to review the U.S. Qualification Standards (USQS) to affirm that we are qualified to do the work. Part of a work plan may involve doing what is necessary to become qualified, or just affirming that we are qualified to do the work. But what if you have questions about how to interpret the qualification standards? The Committee on Qualifications has developed a great tool in this area—a series of more than 50 frequently asked questions (FAQs) about the USQS. These FAQs address the majority of questions that actuaries have raised over the years regarding qualifications. Of course, you can always contact the Committee on Qualifications directly to have other questions answered.

Just as it’s important to review the USQS to determine that we’re qualified to perform the work in question, we also need to know which standards of practice apply. There are about 50 ASOPs—how can we be sure that we are considering the right ones when we plan our work? The Applicability Guidelines suggest which ASOPs may be pertinent when undertaking various types of actuarial work for each area of ­practice. Although not authoritative, these guidelines provide a list of ASOPs that actuaries may wish to consider in various situations. Just as a golfer considers the layout of each of 18 golf holes when he is planning his round of golf, so also does a review of applicable standards provide us with a framework of things to consider when we are planning our actuarial work. Professional actuaries possess the skills and experience to understand the considerations that are suggested by the standards. And, considering the standards while planning your work—instead of in the midst of the work—can lead to a more efficient and professional work product.

Finally, in planning an actuarial work project, peer review can be an excellent practice. Just as professional golfers rely on their caddies and coaches to review their performance on the course, so should actuaries make a habit of including peer review in all of their work. In most situations, peer review makes the finished work product much better.

So, the planning of your actuarial work involves reviewing the U.S. Qualification Standards, with the help of the FAQs. Then a review of applicable ASOPs, with the assistance of the Applicability Guidelines, is in order. Finally, to enhance and ensure the quality of the work, peer review is important. And, if you are not responsible for planning the entire project, consider planning your piece of the project and encouraging the leader of the project to follow this planning process.

When you watch the U.S. Open or another professional golf tournament in the coming weeks, take a minute to watch the golfers executing their plans for their round of golf. Then think of the planning process that you use as you prepare to provide actuarial services. You may score a hole-in-one on your next project when you combine your actuarial skills with a professional planning process.

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