In an era of change, it’s best to take the initiative to adapt and expand as a working professional. How does a senior actuary transform into a general manager of a technology information department? Perhaps by moving from working behind the scenes to the forefront, actively developing the business and unlocking the potential of technology?
In times of change, I believe that if an actuary wishes to complete this transformation, they must have clear goals and direction and determine their desired path to achieve those goals by combining their strengths and advantages. Moreover, they should seize opportunities, change their mindset, achieve self-breakthroughs in the business field, embrace technology and actively empower businesses with technological thinking.
Soft and Hard Skills Build a Competitive Edge
I believe professional literacy, communication skills and actuarial thinking are abilities an actuary should possess, with actuarial thinking lending a competitive edge for career development.
- Professional literacy (hard skills): To become a qualified actuary, an individual needs strict actuarial training to pass actuarial exams; master professional knowledge such as pricing, evaluation and risk management; obtain relevant certificates; grasp the breadth and depth of actuarial knowledge; and gain actuarial certification.
- Communication (soft skills): The ability to communicate effectively in product development, actuarial evaluation and other business applications is vital. In the insurance industry, communication skills can translate into positive results. As one’s career grows, the need for enhanced soft skills increases.
- Actuarial thinking: After years of working in the actuarial profession, an actuary can draw from an actuarial way of thinking to solve problems. This ability will increase with experience and become a competitive advantage for individual transformation and development. From the industry perspective, actuaries can more seamlessly transfer into other departments while it is more challenging for others to move into actuarial work.
Integrating Diverse Thinking
In my experience, an actuary transitioning from actuarial work to business work is akin to moving from a mysterious backstage role to a leading role on stage. They have advantages as an actuary, but there are also disadvantages. To step onto a new stage, an actuary must have a unique understanding of the business, and they may face unknown challenges, such as conflicting thoughts, assessment pressures, communication dilemmas and lack of experience.
In my experience, transitioning into business work from actuarial work is helped by understanding various aspects of the business world.
Customers Are More “Professional”
In China, those born in the 1990s are gradually becoming the primary insurance customers. They have a more professional understanding of insurance, are more familiar with insurance types and names, and can raise professional questions. Specifically, they have a more active and proactive approach to insurance needs—they are not afraid when talking about insurance; they are actively seeking knowledge. At the same time, customers have more diverse insurance needs, and their acceptance of technological tools is higher.
More Diverse Products
Compared with the traditional product sales homogeneity and price wars, there is now more emphasis on differentiating supply based on customer needs, with a product plus service concept to enrich the business. However, it is challenging to land and do a good job.
We should actively explore innovative product and service modes. For example, in pension products, customers may need to receive pension payments and have someone take care of them in their elder years. Services in this area may be reflected in health management, high-end medical resources and pension community services. There is an opportunity to provide comprehensive pension service solutions, and this means considering product extension services when designing and pricing products.
Diverse Business Models
Currently, there are four main business models.
- Individual: One agent independently serves customers for many companies.
- Product presentation meeting: This model is collaborative, with the back office organizing activities, the front office responsible for customers, and sales experts introducing products. This model was prevalent in the individual insurance era, and now customers from banks, insurance and private banking all use this model.
- Insurance livestreaming: This model, which promotes products to consumers online using video applications such as TikTok, has become popular recently. Insurance livestreaming benefits the company brand, insurance concept promotion and also can have short-term sales effects. The online-offline integration model is increasingly becoming a concern. Younger demographics, who are potential customers for insurance companies, like to browse products online.
- High-end salon: This model is very popular now. Many companies have established high-end customer service departments that focus on serving high-end customer groups and provide highly personalized and differentiated services. Insurance companies must choose the appropriate business model that matches their target customers and avoid randomly casting their nets.
Significant Effects of Technology
In recent years, technology has developed a full-process, closed-loop online service of:
- Acquiring customers
- Building relationships with customers
- Converting customers
- Insuring customers
- Maintaining customers
- Settling claims
The influence of technology on business development will continue to increase. When a new technology trend comes, as actuaries, we should embrace it with open arms.
New Expectations for Managers
Business development has shifted from focusing on rapid growth to more of a focus on quality work and doing things correctly. In my experience, the demands on managers are becoming more intense. Managers need to handle premiums, calculate value, lead teams, supervise expenses, control costs and manage compliance. Compliance is essential because, no matter how actuarial work changes, compliance principles must be placed first and actuarial professional ethics guidelines must be followed.
Thoughts After Transformation
I joined Taiping Life Insurance in February 2015 as assistant general manager and deputy general manager of the actuarial department and became the head of the business department in December 2019. During this time, I have experienced transformation in my role at the company in many comprehensive and profound ways.
Moving from the actuarial department to the business department brings significant evaluation pressure. Changes include going from qualitative to quantitative assessment. There are also changes in team structure, from leading a few people to leading a group of people.
Previously, actuarial work—such as product pricing, monthly assessment, price accounting and financial management—only required completing the tasks on time or ahead of schedule. After transitioning to the business department, the most important thing for business lines is the goal-oriented culture. Achieving goals can lead to experience sharing; failing to achieve goals means lessons were learned. In addition, in the management mode of “headquarters formulating strategy, institutions implementing execution,” headquarters strategy is crucial. Actuaries need to do more research and discussion when formulating strategies.
Focus on Team Building
How to effectively cultivate high-quality, high-capacity sales teams and efficient, collaborative internal operation teams is crucial whether you have dozens of employees in the actuarial department or tens of thousands of employees on the business side. As managers with actuarial backgrounds, we sometimes have a relatively weak understanding of human nature, making it easy to execute tasks but challenging to manage people. Because it is difficult to distinguish the true from the false in the records, colleagues at headquarters tend to report good news and not bad news, and the business of organizations is occasionally exaggerated. Therefore, we need to know which people and institutions are trustworthy, testing the level of actuaries’ understanding. For the most part, an actuary-turned-business manager understands the situation by looking closely at the whole picture.
Multidimensional and Efficient Communication
Multidimensional refers to various levels, such as internal communication within departments, cross-departmental collaboration, external channel cooperation and execution of subordinate institutions. In the business department, we need to change our way of thinking about communication and how to supervise institutions better to run our business.
Transformation of Marketing Thinking
The thinking of actuaries is often straightforward, utterly different from marketing thinking. The essence of marketing is to sell products. We need to think about how to meet demand and sell products in creative ways.
Actuaries in Business
Whether it is the underlying logic or strategic deployment level, business managers with actuarial backgrounds face inevitable challenges, such as a lack of practical business experience. But overall, actuaries who transform and work on the business side still have strong advantages in four unique areas.
- A deep understanding of the company’s strategic deployment: Applying actuarial thinking and experience leads to a complete understanding of value assessment, solvency requirements and strategic deployment required by the company.
- Precise interpretation of indicators: Actuaries can use their professional skills to calculate actuarial and financial indicators.
- Abundant external resources: Actuaries have extensive resources, and consulting and reinsurance companies can all be flexible resources.
- High market sensitivity: Actuaries have an innate sensitivity to policy guidance and industry trends.
Empowering Insurance With Technology
Insurance technology development has evolved significantly over the last 30 years, from informatization, networking and mobility to algorithmic and data-driven digitization. We are now in the midst of the digital wave, and where the digital transformation of life insurance will lead us is a significant question. When we talked about technology in the past, we spoke of core systems. Now, we talk about empowering technology, moving from systems and data to technology empowerment.
So, how does technology empower insurance? It empowers insurance in three ways: It enables convenience, ecosystems and intelligence.
- Convenience: Insurance technology is not about adding or subtracting but about developing all tools around customers and agents, striving to solve all problems with one convenient device. For example, we can provide tools for customer acquisition, sales, training and claims handling to agents. And for customers, we can offer tools for claims and service issues.
- Technology ecosystem: All technology empowerment is aimed at achieving business goals and integrating customers into the business ecosystem. We aim to form a closed loop of customer acquisition, building relationships with customers, conversion and fission.
- Intelligence: Technology is no longer simply a tool. It also provides data intelligence, which is very important. For example, publishing insurance-related content on social media, the recommended posting time, frequency, text and content analyzed by big data are all factors that can promote conversion.
In summary, technology empowerment improves efficiency through intelligent recommendations and precision marketing.
Returning to the initial point of this article, how do actuaries transform themselves in the technology era? Why do they need to change? Timing, location and people are all critical factors.
Every transformation is the result of the synergy of subjective and objective factors. Is the company culture able to provide you with opportunities for change? Is there a mentor willing to train and help you? When the opportunity comes, do you have the courage to leave your comfort zone? Company platforms, development opportunities and personal courage are all indispensable. The world is beautiful everywhere, and things change every day. On the road ahead, we value the promise of something good more than the difficulty of the process.
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 © 2023 by the Society of Actuaries, Schaumburg, Illinois.