Actuarial Career OptionsMaking the shift to product management October 2022
Sixteen years ago, I was writing my college application essays. One of the universities asked for a one-page excerpt of my future autobiography. I wrote about how I lost my job as an actuary because robots took over the world and how this event instigated my journey of becoming an entrepreneur. I shared a draft of the essay with my father, an actuary, to get his thoughts. I still recall the funny look he gave me and how he thought I was out of my mind.
Fast-forward to today, you could see how my father was mostly right—I was just a naive 17-year-old with a wild imagination. No robots have taken my job (yet), and the need for actuaries continues to reach new heights. However, things have changed significantly in the industries in which we work. In insurance, we are seeing a shift toward customer-centric business models and an increasing appetite to leverage technology to recreate the industry’s operations, making them more efficient and user-friendly. This has led to:
- Insurance products being developed with a customer-first approach instead of an underwriting-first approach
- Low-touch underwriting and claims experiences that are built by self-reinforcing machine-learning algorithms
- Prevention-first engagement models that use technologies to help policyholders build habits to make them less vulnerable to claims
These changes are not only being driven by InsurTech startups, but also by many of the incumbents that are putting significantly more resources into evolving with changing technology and consumer desires. As these changes continue to unfold, actuaries will play a key role in managing the risks of these new ventures. But beyond pricing and reserving, there’s an opportunity for actuaries to take on a larger role in shaping the industry’s evolution, including:
- Setting the vision and strategy for the next generation of insurance products
- Designing a product and its experience based on a combination of qualitative and quantitative user insights
- Applying new technologies to help solve customer pain points and inefficiencies that have plagued our industry for decades
For the actuary who finds these responsibilities intriguing and wants to take a nontraditional path, becoming a product manager could be a good role.
What Is a Product Manager?
It can be challenging to pinpoint what product managers are and what they do because it can vary across companies and even teams within the same organization. From my experience in product-driven organizations, three descriptors apply.
- They are the owner of the product’s vision, strategy and roadmap. This requires a deep understanding of the product’s customers and the company’s objectives, with product managers acting as the bridge between the two. They should constantly communicate the strategy and roadmap to ensure alignment with their stakeholders. They also should rally teams to get a product shipped to market. Quite naturally, some have described product managers as the “CEO of the product,” but this is an oversimplification of the role. Unlike a CEO, product managers typically work with team members who do not directly report to them. To be successful, it requires an individual who can rally others behind an inspiring vision and influence without having direct authority.
- They are enablers, helping teams launch products and features to market. Once the product manager sets the direction, following through on the roadmap and shipping the product to users is key. This part of the role can vary the most. Some product managers play the role of coordinator, ensuring that all functions (engineering, design, marketing, operations, etc.) execute their part to get a product to market. Others, particularly with smaller teams and startups, are in the weeds, contributing to the design and code, running user research and building the go-to-market strategy. Because this can be amorphous, the key to being a great product manager is a willingness to play the role the team needs most, unblocking anything that gets in the way of getting a great product into customers’ hands.
- They are advocates for the customer. Building a solid product roadmap and shipping great products depend heavily on a strong customer understanding. Product managers are gathering customer feedback constantly to determine what’s next on their roadmap. This can be qualitative—interviewing customers to understand their needs and pain points to develop a new product or observing customers using an existing product to determine how to improve it. It also can be quantitative. For example, an analysis of where customers drop off and spend the most time on the buying journey of a digital insurance product can pinpoint where to improve the user experience.
Why Actuaries Should Consider Going Into Product Management
I was about three years into my career when I realized that the traditional actuarial path wasn’t for me. Although at the time I didn’t know that I wanted to be a “product manager,” I knew I wanted a career that better suited my personality and long-term career ambitions. Upon reflection, I know I made the right decision to switch, and here are three reasons why.
1. Make a Real Impact on Customers
Early in my career, I rotated across various roles in pricing, valuation and financial modeling. Each of these functions played a part in building and maintaining an insurance product. As someone with an entrepreneurial itch, though, I struggled to understand how my work made an impact on the business and our policyholders. When I asked about the “why” behind product decisions, it was rarely about the customer.
As a product manager, every decision starts with the customer. A new product idea must meet a user’s need or solve a pain point. New features to improve existing products are prioritized based on their ability to move the needle on metrics that showcase the product’s desirability to consumers. It sounds simple, but as many in this role have experienced, multiple forces try to push for an outcome that doesn’t put the customer first. Much of the job is obtaining a consensus from a web of complex stakeholders to do what’s best for the user. Product managers must make the tough decision to say no to ideas that don’t align with the long-term goals of the company, even though they may positively affect other metrics in the short term. Although I’ve found this challenging, it is the most rewarding part of my job—nothing beats seeing a customer’s eyes light up when they use my product or service.
2. Accelerate the Development of More Skill Sets
My experiences as an actuary helped me develop technical skill sets in Excel and actuarial programming, a strong analytical mindset and a deep understanding of insurance products. However, these roles gave me exposure to very specific parts of developing and maintaining an insurance product. I wanted to be more involved in the end-to-end process of building a product. Being a product manager, I was able to do just that. My scope of work included the following:
- Coming up with an idea and validating that there is a consumer need
- Creating a business case to get organizational backing to launch the product
- Developing a long-term product roadmap and vision
- Working with engineers and designers to build the product
- Designing a go-to-market strategy and executing it
- Training operations and sales teams on the new product or feature
- Continuously iterating on the product based on user data and feedback
After going through this process with several product launches, I developed a repertoire of skill sets that rounded out my actuarial ones. They included strategic thinking, negotiation, user research, ruthless prioritization and storytelling. Although some of these skills would have been developed eventually if I had continued the traditional actuarial path, becoming a product manager accelerated my growth in these areas. On the flip side, my data-driven and analytical competencies that I developed as an actuary helped accelerate my trajectory as a product manager.
3. Face Ambiguity and Failure
As a profession, I believe there’s an opportunity for actuaries to take more risks and fail more. Almost all actuaries experience failure when they go through the grueling process of sitting for exams. But when it comes to the day-to-day job, the scope for failure can be limited, especially in the early stages of an actuary’s career. This can be attributed to the work being more task-oriented, contributing to one piece of a larger project. On the other hand, a product manager typically is assigned the following:
- An outcome—this can be for an existing product that can be enhanced to maximize a certain set of metrics or a new product to be built that can help achieve the company’s overarching targets.
- A customer problem space—this is more common when building products from zero to one. They may be given a user need or pain point to solve by developing and testing new concepts.
This leaves the product manager with unlimited ways to approach their work. Even if a product manager could run all the user research and gather as much data as possible to determine what gets built, there is always uncertainty if customers actually want the product until it launches. That’s why the best product managers can find the right balance between getting the product right and getting it out the door.
More important, when the result of a new feature or product is unclear, they know how to set up suitable experiments to determine the success or failure quickly. This allows teams to rapidly learn and iterate until they reach their desired outcome. In many instances, the product-market fit may never be achieved. It’s on the product manager to know when to pull the plug and move on to the next initiative. This mindset of failing fast and constant experimentation is something I would have never experienced in a traditional actuarial role. It has given me more opportunities to take risks and added to the resilience I built through failing actuarial exams.
Why We Need More Actuaries to Become Product Managers
Most of the hiring of product managers in insurance is done by InsurTech startups and the digital innovation arms of large insurance companies. As the industry continues evolving to become more customer-centric and tech-savvy, the divide between insurance startups and incumbents will blur. Eventually, every insurance company will be an InsurTech, accelerating the need for more product managers. But why should actuaries be the ones filling these positions?
When looking at the strategies of some of the early InsurTechs, I observed there was a heavy emphasis on the customer and technology—risk management took a backseat. Although this shift was (and still is) needed, the approach has led to questions about the long-term sustainability of these InsurTechs’ business models. Imagine building an insurance business that solely focused on what customers wanted:
- Underwriting would be non-existent, with the lowest price offered to the customer regardless of their risk profile.
- All claims would be approved instantly with no documentation required.
- Changes to the policy (benefits and coverage amounts) could be made at any time without changing the premium.
As actuaries, we already know the challenges of implementing these extreme scenarios. But to product managers who have no insurance background, this wouldn’t be obvious. A deep understanding of risk is the actuary’s unfair advantage and what separates them from a generic product manager. An actuary can use their risk management background and combine it with the ability to empathize with the user and apply technology to build user-centric products with a level of risk that can be controlled. This sweet spot is sorely needed as we enter the next phase of InsurTech, which will require more viable and sustainable innovation.
Breaking Into Product Management as an Actuary
The jump from an actuarial job to product management can seem significant. However, all product managers had to apply for the job with no prior experience at one point. In fact, many don’t start their careers as product managers. Here are three ways actuaries can position themselves to move into product management successfully.
- Get involved with digital. Most product managers are hired to build and scale digital products. Applying existing skill sets to this new world of products is a way to ease yourself into the space. Many insurers still growing their digital capabilities probably won’t have a dedicated “digital actuary” and will need to rely on actuaries from other teams. Work with your manager to see if you can dedicate a portion of your time to these initiatives. For these projects, it’s not only important to ensure you perform well in your assigned role but also to take the opportunity to connect with others on the project to develop a holistic understanding of the work.
- Start in insurance, finding a product development team that starts with the customer. Given their advantage of having risk management knowledge, actuaries who want to switch to product management should start in insurance or InsurTech, as hiring managers will value domain knowledge. Some roles have product management components but don’t have the product manager title. Look out for teams with the following characteristics:
- They build products based on customer needs and pain points and have a process to gather this information.
- They have a culture of experimentation and openness to failure.
- They are composed of or work with a cross-functional team of engineers, designers, product managers and marketers.
Many big insurers have dedicated innovation and digital arms that check all these boxes and will give those with an insurance background an edge in the application process. These opportunities also act as a great steppingstone to a product management role outside of insurance.
- Start talking to customers. Getting closer to the customer doesn’t have to involve switching jobs. One alternative is to pick a customer-facing touchpoint with room for improvement (e.g., the purchase, policy modification or claims experience) and speak to customers to get their feedback. Based on the feedback, brainstorm solutions to help improve the process. Find the appropriate teams that can help implement these solutions and present the results to them with a business case. Even if the idea ultimately isn’t implemented, this will expose you to parts of the product development process and create opportunities to get involved in areas that need customer-centric product design.
My Journey and Perspective On Becoming a Product Manager
I made the shift to product management six years ago after spending the first four years of my career in actuarial and analytics roles. I was fortunate to join Liberty Mutual’s innovation arm, Solaria Labs, as one of its founding members. It was during my time at Solaria Labs when I got my first taste of product management, and I have never looked back. The path has opened many new doors for me and is the reason why I am now a head of product for Grab, a leading super app in Southeast Asia that provides transportation, food delivery and digital financial services. I love what I do because of the impact I make on users, the ownership I have over my work and the ability to be a generalist on a daily basis.
Being a product manager isn’t for everyone, however. It probably isn’t the right career choice for those who don’t like to deal with ambiguity, want more structured work and aren’t comfortable with managing stakeholders. For actuaries who want to take the lead in disrupting the industry and desire a career that balances analytical thinking with creativity, involves rolling up their sleeves in multiple capacities and solves problems that improve customers’ lives, this could be a rewarding career change.
Statements of fact and opinions expressed herein are those of the individual authors and are not necessarily those of the Society of Actuaries or the respective authors’ employers.
Copyright © 2022 by the Society of Actuaries, Schaumburg, Illinois.