In this blog, Dr Mark Farrell FIA, discusses the challenges faced by today’s graduates and the skills they need to meet the rapid changes in the actuarial profession.
We live in an increasingly uncertain world where no one knows what the future holds. The workplace is not immune to this uncertainty as it continues to change with time. The actuary from 50 years ago, writing out calculations by hand, would have found it difficult to imagine today’s actuary having such immense data and computing power at their disposal.
Many university actuarial students are now graduating and moving into the world of work. Given the pace of change one may ask what are likely to be the most important skills for actuaries of the future?
Below are five skills tomorrow’s actuaries will need:
1. TECHNICAL EXPERTISE
Actuaries are renowned for having strong technical ability. We spend years studying complex maths and statistics. As the complexity of the world evolves, our ability to solve difficult problems using our technical skills and knowledge will stand us in good stead. Our ability to quantify risk will remain a cornerstone of our work and add value to businesses and society as we deal with new emerging issues.
2. FLEXIBILITY AND ADAPTABILITY
Remember the day when an actuary could get a practicing certificate and then rest assured that their future career was lined out until retirement? Those days are gone. Actuaries are now faced with the very real idea that they may undertake work that is completely different from their current work. We need to have the ability to adapt to the needs of the changing business environment and apply our skills and knowledge in new domains and ways.
As the world shifts in a progressively competitive and global way, the ability to challenge ideas and come up with new unique solutions is becoming more important. An actuary’s aptitude to be creative may not spring to mind when one considers an actuary’s core skill-set, which is largely focused on logic and reason. However, I think we are doing ourselves a dis-service. I believe we already apply creativity, in many ways, without thinking about it as creativity. Consider, for example, an actuary developing new pricing models for a different product.
Actuaries of the future will need to take this up a notch and come up with new unique ideas that embed new technologies and ways of thinking. This is likely to be especially true as we bring new exciting products to the insurance consumer (think wearables, IoT, telematics etc). Innovation is one of the key ways by which we can remain in business and creativity is the gateway to this innovation.
4. COMMUNICATION SKILLS
Strong oral and written skills will remain fundamental to an actuary’s day job. We may perform the most optimal solution to a business problem, but if no one can understand what that solution means then what value have we added? We need to be able to summarise analytical results and present them to decision-makers to be easily interpreted and acted upon. Stakeholders need to truly understand the complex risks we are analysing, and hence strong communication skills will remain key to our work.
We have entered the world of big data and actuaries now have a wide plethora of data available for their analyses. Strong coding skills allow us to analyse this data in an efficient manner and automate recurring tasks when necessary. VBA has been the main programming language actuaries have traditionally used (given our reliance on Excel) however many actuaries are now learning other languages such as Python as we move towards machine learning based solutions and analyses outside Excel.
Virtually every industry and profession has been experiencing rapid change over the last decade. The actuarial profession may be over 300 years old, but it is also caught up in the throes of change. Globalisation, technology, automation, machine learning and ever changing customer needs, wants and expectations. These are just some of the areas acting as catalysts to change affecting the actuarial profession. More than ever we need to work hard to evolve and stay relevant. The future may not be certain for new graduating actuaries, but if we embrace change, remain flexible and upskill as necessary, then I believe the future is very bright. Actuaries can continue to play a big role in helping to overcome the challenges of tomorrow and embrace the opportunities they bring to the profession.
Dr Mark Farrell FIA is a Senior Lecturer of Actuarial Science at Queen’s University Belfast. He blogs on actuarial science related topics at www.ProActuary.com.