By Sally Ezra
2020 was a year of enlightenment for me. Between my family and social circle, I feel as if I am surrounded by a United Nations conference. My children are mixed race. I have gone through life believing color does not matter—it’s what is inside that matters. This year, I became acutely aware that being “color-blind” is not the right approach.
The George Floyd protests, the increased presence of and the materials and programs provided by the International Association of Black Actuaries and the Organization of Latino Actuaries, and having candid conversations with my friends of color about race have opened my eyes to the struggles people of color had and have due to systemic racism. When thinking about the consequences of systemic and systematic racism people of color have endured in their housing, education, health care, and other very important parts of life, I am realizing how these hurdles have impacted the opportunities available to them.
When you consider all of that, can you say enough is being done? I cannot, and based on regular inquiries I am getting from our clients, I believe the actuarial employers are ready to go beyond the words of their antidiscrimination clauses and take real action.
Many human resource contacts and actuaries at our clients are telling me they have goals of adding diversity to their actuarial team and are asking for my help and advice in that matter. These conversations are happening weekly.
How can the employers of actuaries hire underrepresented minorities? Data suggests that the percentage of credentialed Black actuaries hovers at approximately 2%, and that percentage is approximately the same for Latino actuaries (I understand collecting LGBTQ+ and other diversity data is in the works). According to Solskin Gomez-Krogh, the Society of Actuaries’ (SOA) diversity, equity, and inclusion lead, the SOA plans to publish a summary of member and candidate demographics in March. Demographic data on this topic can be found on pages 2 & 3 of the Casualty Actuarial Society’s (CAS’) annual report at www.casact.org/about/thecas/annual_reports/Annual-Report-2019.pdf, and additional diversity demographics which is based on U.S. Census data can be found at https://datausa.io/profile/soc/actuaries#demographics.
I find it hard to be encouraging to employers who want to increase their numbers greatly when such a small percentage of the candidate base offers the diversity they are looking to add to their teams—especially when you think of the specific set of technical skills they need any one candidate to have. Additionally, as people make moves based on their own professional and personal needs, only a fraction of the small percentages of total minority candidates will be available at any given time.
My message to these employers is to grow their own diverse workforce.
The employers who want to add diversity to their actuarial team can take active steps to help increase the pool of candidates available. The International Association of Black Actuaries (IABA) and the Organization of Latino Actuaries (OLA)—with the support of the Actuarial Foundation, the SOA and CAS, and many employers of Actuaries—are offering more scholarships and other help to diverse students than ever before. This effort is creating more highly qualified diverse entry-level candidates. By focusing on hiring diverse entry-level candidates, employers can take steps to help increase the amount of diverse actuarial students who will grow to be credentialed actuaries on their team.
From all I have read, there are three things needed to help develop a greater pool of diverse STEM candidates, and I believe this approach will hold true for actuarial talent. Although any of the three below efforts are good, it is the combination of the three that will give the best chances of success. As such, the following outlines the bold recommendation I make to the individual client requests I receive.
The 3 things an employer who wants diversity on their actuarial team can and should offer first-year college students:
- Scholarships, with the understanding they will have a job offer upon successful completion of the degree, with certain outlined standards met
- Opportunities to gain experience through internships
- Mentorship throughout their undergraduate
education and beyond
Start by identifying diverse incoming freshmen who are in a STEM program, and through discussions, confirm interest in the actuarial profession. Then provide a package to them that gives them financial assistance through partial or full scholarships, practical internship opportunities within a community of actuaries who can give them the security of knowing they will be well-prepared to enter the profession, and a mentor or group of mentors who will give support, advise, and be a cheerleader.
Does this require a lot of time, money, and effort from an employer who wants a diverse team? Yes! It may be a lot for an employer, but it is a great way to support diverse students and a great way to help students grow into being the actuary they want to hire. Is success guaranteed? No, of course not. It never is, but the combination of the three actions outlined will set the student up for success. Taking these steps will create work-ready new actuarial hires who, with the continued support all actuarial students need, will one day be designated actuaries who add the sought-after diversity the company—and indeed the profession—is looking to have.
Once you have hired the actuarial student, continued mentorship through the diverse candidate’s exam process and career will help the person’s actuarial and professional development. Encourage the student to participate in associations such as the IABA, OLA, or the Sexuality and Gender Alliance of Actuaries (SAGAA), as well as any affinity groups that exist within or outside of your organization. The goal is to allow the student to be successful as their authentic self, and having role models and association with other people who share similarities will facilitate that. Many companies have launched leadership development programs specifically for minorities and women. If those are available, work toward having the student participate so they can bring the skills and perspectives learned back to the actuarial department. Offer your analysts the opportunity to be part of the hiring and mentoring process for new college recruits. Along the way, be acutely aware of the compensation and of the career advancement opportunities your diverse actuaries are awarded. And lastly, as companies are not only focusing on diversity, but also on inclusion, make sure the value they bring is recognized and that their voices are heard.
I realize the formula outlined above is very comprehensive and is not something all employers who desire to create a more diverse actuarial team will have the resources to do. For employers of actuaries who are not able to create such a comprehensive scholarship, internship, and mentoring program, there are still plenty of things you can do to enhance your minority recruitment process.
Provide internships opportunities. A candidate of any background who is given an internship and the support of a mentor will very likely accept an offer of employment from the company upon graduation. You can recruit from Historically Black Colleges and Universities (HBCUs). A total of 107 Universities in the U.S. identify as HBCUs. To find a HBCU near you, visit www.thehundred-seven.org/hbculist.html. A study by the Harvard Business Review found that the odds of hiring a person of color increased significantly if there were at least two in the candidate pool. Investing in diversifying your potential candidate pool will naturally result in a more diverse workforce. That is an important factor to keep in mind to ensure diversity hires.
The IABA published “IABA Recommendations for Employers” on 8/21/2020. It is a great resource for actuarial employers looking to hire and happily retain its diverse actuarial talent.
Another important piece to remember is to educate the members of the actuarial team on the importance of diversity, equity, and inclusion. As much as having a diverse team is the right thing to do, it is also good for all involved to be aware that is good for the business. The bottom line: Studies continue to show that diversity and inclusion lead to higher profitability. According to McKinsey, companies with a more racially and ethnically diverse workforce are 35% more likely to have greater financial returns than industry medians, and Boston Consulting Group found that companies with diverse management teams have 19% higher revenues due to innovation.
I contend the best way for any company to have a truly diverse actuarial team is to be part of the solution from the ground up. The challenge is the low percentage of credentialed actuaries of color. The solution is to create a greater candidate pool. There is no overnight remedy because of the high bar of entry the actuarial profession and the travel time required to become one, but it is my hope that in five years, we will not be asking where the diverse actuarial candidate pool is. Rather it will be growing and flourishing. The grass is always greenest where you water it.
SALLY EZRA is a partner at Ezra Penland Actuarial
Some Good-to-Know Facts
Asa Timothy Spaulding is widely recognized at the first black actuary, despite not obtaining an actuarial designation, beginning his career in 1932. He became president of North Carolina Mutual Life Insurance Company and worked under Eisenhower and Kennedy after he retired. For more information about Asa Timothy Spaulding, visit: https://northcarolinahistory.org/encyclopedia/asa-spaulding-1902-1990/
Robert Randall was the first designated black actuary in the US. He is an FSA of 1952, and according to the IABA presentation, Racism in the Actuarial Profession, 2020 Virtual Annual Meeting, Aug 2020, Randall was a Yale graduate, a first lieutenant with one of the most highly decorated units of the military—the Tuskegee Airmen—and held two master’s degrees (from Columbia University and New School of Social Research).
Twenty-six years later, Marsha Bera-Morris was the first Black woman to earn fellowship within the SOA. She is an FSA 1978.
Thirty-two years after Randall, in 1984, Ollie Sherman became the first Black actuary to qualify for fellowship within the CAS. He is an FCAS of 1984. Four years after Ollie Sherman earned his FCAS designation, Linda Shepherd became the first Black woman to earn fellowship within the CAS. She is an FCAS of 1988.
The IABA was founded in 1992 under the name National Association of Black Actuaries (NABA). The organization changed its name to the International Association of Black Actuaries (IABA) in 1994. In 2020, the IABA awarded $144,500 to 45 students. Since the scholarship program began in 1996, IABA has awarded over $1,000,000.
OLA was founded in 2014. It offers one-time scholarships to candidates to attend actuarial conferences, covering travel, lodging and event expenses, all while being mentored by members of the OLA board. The candidates can learn about the actuarial profession, network with credentialed actuaries, and in some cases, these events allowed students to get interviews and even job offers. Additionally, OLA offers financial support for taking exams, as well as scholarships.
SAAGA was formed in 2020 with the mission to “facilitate connections between LGBTQ+ actuaries and allies to engage in community-wide dialogue about LGBTQ+ issues. This group aims to create a safe space for dialogue, community, and career encouragement, while also educating the broader actuarial profession.”
Employers can consider supporting these organizations—additional information can be found here:
- The Organization of Latino Actuaries (OLA) – www.latinoactuaries.org https://www.linkedin.com/company/latinoactuaries/
- The International Association of Black Actuaries (IABA) – www.blackactuaries.org – https://www.linkedin.com/company/international-association-of-black-actuaries/\
- Sexuality and Gender Alliance of Actuaries (SAGAA) – https://www.linkedin.com/company/sagaactuaries/ The launching of www.sagaactuaries.org/ is in the works!
The JCIED—the Joint Committee
for Inclusion, Equity and Diversity (JCIED).
In 2019, the Casualty Actuarial Society (CAS) and Society of Actuaries (SOA) formed the Joint Committee for Inclusion, Equity and Diversity (JCIED). This committee is composed of members from both organizations, as well as representatives and guest representatives from partner organizations such as the International Association of Black Actuaries (IABA), the Organization of Latino Actuaries (OLA), the Actuarial Foundation, the Sexuality and Gender Alliance of Actuaries (SAGAA) the Canadian Institute of Actuaries and the Conference of Consulting Actuaries. https://www.actuary.org/sites/default/files/usqscomments/77-Casualty-Actuarial-Society-and-Society-of-Actuaries-Joint-Committee-for-Inclusion-Equity-and-Diversity.pdf
Actuaries were involved in many sessions at the 2020 Dive In Festival—to see the topics that actuaries around the world covered, see https://www.youtube.com/watch?v=F5cW5qZTlBY
About Dive In: Dive In is a global movement in the insurance sector to support the development of inclusive workplace cultures. Its mission is to enable people to achieve their potential by raising awareness of the business case and promoting positive action for diversity in all its forms. Since its birth in 2015, Dive In has grown exponentially, reaching global heights with events taking place across 32 countries world-wide, attracting more than 10,000 people.
These are a sampling of resources. There are many, many more resources available that address racial and gender inequities and solutions that have an actuarial focus. https://diveinfestival.com/about-us/