Photos: Zachary Bako
What do you like best about working as an actuary?
When I first started my career as an actuary, I felt honored and fit into the profession quickly. Now, I have been working as an actuary for five years, and I regard it as the most suitable job for me because it offers:
Working as an actuary is like playing a video game. There are plenty of missions, and you need to accomplish every one of them before you can upgrade to the next level. Although the repetitive and tedious routines can be challenging sometimes, I always try to manage my stress levels at work.
As a pricing actuary, I feel lucky to have the chance to develop multiple products and to learn about different features, complex modeling techniques, various sales modes and all sorts of policyholder behaviors. It is exciting work, and I am never bored.
In the actuarial world, techniques and methodologies are always progressing. Curiosity is essential for a good actuary—we must pay close attention to the rapid changes coming from regulatory updates, the evolving accounting principles and the continued development of computer science.
A Friendly Working Atmosphere
I like working with other actuaries, and I find them to be sincere and trustworthy. When it comes to internal communication, it’s always smooth and effective—most actuaries get straight to the point.
Additionally, when I was early in my career, I found it easier to meet excellent mentors when I entered the actuarial department after graduation, compared to when I worked in a nonactuarial internship previously. And these mentors, who were experienced and patient, helped me improve my skills quickly.
A Decent Job
Whether in China or overseas, an actuary is a respected profession. In most people’s eyes, being an actuary means you are hardworking, intelligent and have a stable income. What’s more, people are accustomed to respecting and trusting you.
Generally speaking, compared to some other professions with crazy hours and a heavy workload—such as investment bankers, programmers and medical staff—actuaries have a better work/life balance. I have time outside of my work life to spend with my friends and family, to travel and to learn new things I’m interested in.
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How do you incorporate innovation in your work?
In my daily work, the ability to problem-solve relies more on experience level rather than innovation. However, this doesn’t mean that innovation is lacking in my work. Innovation, from my point of view, is more than just skills. It’s also thinking outside of the box, trying different approaches and seeking alternative solutions.
As a member of the pricing team, I have never developed two identical products—there are always a few changes based on the last version. Even a slight feature update can mean a large revision or more considerations for risk management. If a brand-new feature that has never been developed is requested, we learn a new modeling method and explore unknown areas.
In my opinion, innovation is incorporated in one’s attitude toward learning rather than tools or skills. Besides, practical experience is important—it provides confidence to face challenges.
Can you share some insights about long-term life and health products in your industry?
In China, long-term life and health products have been bestsellers during the last few years. They also are the main product lines in my work. Here are five insights based on my expertise:
- In some situations, the price will not follow the pattern of benefit term. That is to say, the longer the benefit term is, the price is not necessarily higher. The pattern will be determined by the size of the saving/protection component in this product.
- In some extreme cases, long premium paid term may result in a higher price. That usually happens in products that include a return of premium benefit.
- Usually, we regard a whole life product as an endowment with longer life expectancy, which will be equal to or greater than the terminus of the current life table. From the perspective of product strategy, we consider a whole life as a saving instead of a protection.
- Except for special strategies, we usually try to set a minimum cash value (that meets the regulator’s requirement) to optimize the profitability. For protection products, such as term life, consumptive critical illness, waiver of premium and so on, the cash value sometimes will be close to nil.
- For health products in recent years, middle-aged females have the highest risk exposure.
What about your job brings you the most joy and satisfaction?
I feel honored when people ask me for help as an actuary. I receive requests from different departments and help them solve problems that are usually related to numbers or mathematics. In our company, the stereotype is that actuaries are omnipotent.
But everything has two sides. Sometimes, the title of an actuary can be a burden for me. We know a little more—even just in a narrow area—than others. Our job requires us to know something about everything, and to know everything about something, which is tough since we are not superheroes nor are we more brilliant than anyone else.
Therefore, for me, the title of actuary becomes a responsibility more than a halo. When solving a problem, it is not only calculating a result, but also making sure of it. What’s more, I make my work understandable to those who do not have an actuarial background by using layperson’s terms—I do not want to create barriers or be pretentious.
My colleagues appreciate my work style, which brings me a lot of satisfaction. They show their appreciation by seeing me as a lively and interesting working partner, and they put their trust in me. I enjoy being trusted and appreciated—it brings a sense of meaning to my work as an actuary.
Who inspires you and why?
My boss, Xiangyi Chu, the head of pricing in our actuarial department, is an excellent job mentor as well as a close friend in my actuarial life. She brought me on her team after my internship at MetLife.
Besides providing me with this job opportunity, she has inspired and supported me in many ways, from small and detailed things like exams and professional skills, to big-picture subjects like my career path. She trained me to have a good sense of responsibility at work. Professionally, she is a great leader and full of enthusiasm. Personally, her optimistic attitude toward life and endless energy have a profound influence on me.
How much does strategy play a role in your job?
As a pricing actuary, the product strategy is the guidance that impacts every detailed job. On the one hand, everything I do goes toward developing an appropriate product for the market with a competitive price; on the other hand, I must ensure new products are never underpriced or insolvent. Our key performance indicators (KPIs) include both sales value and risk indicators, which require me to balance the competitiveness of the product and risk.
It is widely known by pricing actuaries that we can never fulfill three things simultaneously:
- Extremely competitive prices
- Large profits
- High commissions
Usually, the strategy is to prioritize one of these and give up on the other two. Only a clear target can help us pay attention to the most important thing.
What are the most important actuarial skill sets?
Modeling and communication are the core skills an actuary needs to be competitive.
Modeling is the key foundational skill for an entry-level actuary. Everything you want to study, go through or analyze will eventually fall into models, which are the origin of actuarial theory. You can grasp the pattern of any actuarial items, such as premium, reserve, profitability and so on, only if you learn the modeling technique deeply. And you can also quickly analyze the reasons behind the changes based on your modeling experience. Modeling is also the best bridge between the actuarial world and reality.
Communication is the other important skill. Different from modeling, which is regarded as a hard skill, communication is an important soft skill for every actuary—especially for actuaries who wish to reach a managerial position.
When we discuss communication, people usually think of someone who is talkative and articulate. While a number of actuaries tend to be quiet and reserved, that doesn’t mean they are poor communicators. Good communication from an actuary should have the following qualities:
- Good writing skills that help make reports clear and easy to understand
- Be cooperative and exchange updates in a timely manner
- Good documentation skills
- Be a good listener and understand others’ needs, and give them feedback in an effective and prompt fashion
Can you define a successful day?
The day I got the result of the Life ALM and Modeling (LAM) exam, which was my last module (except for the Fellowship Admissions Course), was a successful day. After all of my hard work, I finally received the qualification I had been pursuing for years.
It took me about six years, from university to workplace, to complete the Society of Actuaries (SOA) exams. During those days, every morning when I opened my eyes, the first thing I was aware of was how many cards I needed to recall. Before I earned my qualification, there was never time to relax during holidays. Even on the day of Chinese New Year, I woke up early to review lessons and do practice problems.
Although it was a hard time full of endless pressure and anxiety, I felt satisfied pursuing this goal. I focused all of my attention and energy on passing the exams. Therefore, the happiness and achievement were thrilling on the day when I finally passed the last exam.
Copyright © 2021 by the Society of Actuaries, Schaumburg, Illinois.