What Is An Actuary?How to effectively answer this common question March 2023
It was 1975, and I was a senior in college, back on the East Coast for year-end holidays. I sat in the lobby of Home Life, waiting to get called in for my first actuarial job interview. As a Stanford student who considered himself a math whiz, I was a little cocky. I opened up New Yorker magazine on the table in front of me and came across the perfect cartoon by Robert Weber to help keep me grounded. It was a geeky-looking guy saying to a woman, “In a way, I am kind of famous. But you’ve probably never heard of me unless you happen to travel in actuarial circles.”
Whimsical digression aside, this article aims to answer the question, “What is an actuary?” For starters, I found this statement on the SOA website:
“Actuaries are highly sought-after professionals who develop and communicate solutions for complex financial issues.”
I also recall a definition along these lines promulgated some years back:
“Actuaries evaluate the financial consequences of future contingent events.”
Both statements are accurate, but just try using them at a cocktail party and see what reaction you get.
A Variety of Skills
One problem is that actuaries do so many different things, and no short statement can capture that breadth while keeping the interest of a listener or reader. I earned my FSA in 1976 and held a wide range of roles during my actuarial career. As an actuarial student, I worked in group marketing, individual insurance financials, individual annuities and underwriting. Then I became an individual health insurance financial manager, disability income product manager, head of an actuarial department and, finally, chief actuary. In the years since, I have been a systems consultant and a career coach. What statement would cover any combination of those in a meaningful way?
We’re all proud of those highly developed technical and analytic skills we mastered to become actuaries, and rightly so. But we all have those, so they do not distinguish us much from other actuaries, or even from other highly analytic professionals (eg, data scientists, quantitative analysts). In fact, I always enjoyed it when someone would be surprised to find out I was an actuary, or a non-actuary would say, “You’re not like other actuaries.” That didn’t mean I wasn’t proud of my actuarial credentials, but I liked not being defined by those.
If you aspire to be a great actuary, you must be willing to gather skills outside of the traditional actuarial ones, and even outside of the profession. Being somewhat introverted and buried in my math textbooks, I was given that chance my sophomore year when a friend wanted to put on a play and asked me to participate. The idea of memorizing lines and presenting to an audience scared me. But Paul persisted, so I ended up cast as Sir Studley in Once Upon a Mattress.
To my surprise, I loved performing and went on to do four more plays before graduation, as well as a little bit of theatre at a social club in NYC afterwards. That experience got me to be completely comfortable in front of audiences, which proved to be a huge asset to my actuarial career and beyond. One of the most important ways to distinguish yourself as an actuary is through communication skills, shedding that reputation of a highly technical speaker who takes something out to too many decimal places.
Changing the Perception
Think of how it would change things for you and your career if people saw you as that person of influence who could always boil messages down to their essence instead of getting bogged down in the minutia:
- What if you were sought after to present to peers, senior management and at conferences?
- Wouldn’t it be nice to be considered a thought leader, not just because of your command of the actuarial concepts, but because you make them easy for others to follow?
- How would it change things if you were recognized not just for your actuarial expertise but for your incisive commentary on a range of topics?
Now how can you go about making that happen?
You don’t need to run out and join the cast of I Love You Because and start singing “The Actuary Song”—although joining a group like Toastmasters can certainly help.
The first step is to simply observe the way you speak and write and what impact it has on others.
- When you contribute at a meeting, do you get across your concepts simply?
- What body language do you see among other attendees?
- Do you frequently get interrupted or are others listening intently?
- How often are you invited to contribute to the discussion?
- Are you asked to weigh in on issues beyond the traditional technical and analytical ones?
When you write a document:
- Do you start with the goal in mind?
- Do you pare back what you wrote to just what is pertinent to that goal and avoid the temptation to cover multiple purposes in one report?
- Do you open with an executive summary, leaving the details for later for those who want them?
- Do you resist the temptation to immediately send it out, and let it sit for a bit so you can come back to it with fresh eyes before its release?
- Do you get the response you anticipated, or does your writing more often raise more questions?
Now think about what those observations and answers tell you to work on to be more effective.
For a resource to help with this, I recently read a book that provides excellent guidance on being more effective in your communications—Simply Said: Communicating Better at Work and Beyond, by Jay Sullivan. He gets into PowerPoint, emails, report writing, meetings and pretty much all types of situations.
Answering the Question
Now let’s go back to where we started: “What is an actuary?”
I’m sure you have been asked this question hundreds of times. How can you give an answer that is meaningful but also effective and engaging?
The first step is to slightly reframe the question. Imagine how you might answer if they instead had asked, “What is interesting about what an actuary does?” or “What makes an actuary so valuable?” That answer will focus more on the benefits to that listener and what will be meaningful to them. And that’s the real key—always try to answer WIIFM, “what’s in it for me,” where “me” is the listener.
The second step is to recognize that no simple definition will cover all of what an actuary does or even all of what you specifically do vs. all other actuaries, and that you really don’t need to worry about that. The point isn’t to provide lots of information; it’s to engage the listener so they might be interested in knowing more. If they are, you will get the chance to provide other aspects of what an actuary does in response to their questions.
Here are some answers I might have been able to give in different eras of my actuarial work:
I automate calculations to be done more efficiently and without errors.
Individual Insurance Financials:
I streamline our financial reporting processes.
I make sure our annuity systems are error-free.
I create risk analysis that lets our underwriters make better decisions.
Individual Health Financial Manager:
I won our 150-person department $3,000 bonuses in the company’s first-ever productivity improvement contest.
Disability Income Product Manager:
I put our product line on track to catch up to the disability market leader within five years.
Actuarial Department Head:
I transformed a dispirited compliance group into an engaged and productive unit that was able to handle 50% more projects with the same headcount.
Here’s a fun exercise: Try expressing your “unique value proposition” in a Haiku. I challenged a group of actuaries to do this several years ago, and I loved this answer:
Ninety percent detective
Ten percent magic
You can find the rest of the Haikus I received here. I invite you to send me yours to add to the list.
So what will you say when you are asked, “What is an actuary?”
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.