How to increase your chances of achieving a Management or Leadership Position in Actuarial Science

Estimated Reading Time: 6 minutes

Just a couple of quick housekeeping items to start! First, my apologies for not sending out the newsletter on Tuesday. We've actually just hit our 1-year anniversary (yay!), and this is the first time we’ve missed sending it on schedule.

This past week, I was at the Society of Actuaries ImpACT conference, where I had the chance to meet dozens of people. More and more are starting to recognize me, thanks to my active LinkedIn presence — I’ve posted daily for a full year without missing a day! If you enjoy this newsletter, I highly recommend following me on LinkedIn here for more valuable and engaging daily content.

Now, before we jump into today’s article, here’s a question for you. Select the answer that resonates most closely with your thoughts:

The path to a management or leadership position in the actuarial field is a journey that requires dedication, strategic planning, and continuous personal development. While technical proficiency forms the foundation of an actuarial career, ascending to leadership roles demands a broader skill set and a more holistic understanding of the business landscape.

Situating the context

But first, some context. This isn’t your typical “Top 10 Tips to Become an Actuarial Leader” article. We understand that success often depends on external factors beyond our control, and luck plays a significant role. It’s unrealistic to assume that simply doing XYZ will always result in ABC outcomes. While focusing on what’s within our control is essential, we must also acknowledge the impact of external forces and not be misled by randomness.

While many of us work with stochastic reserving, we can see parallels in life—it’s a blend of predictable and random factors. Think of hard work like training a neural network: it expands the surface area for discovering the best outcomes. While luck might occasionally hit the target by chance, consistent effort refines our parameters, minimizes noise, and improves our chances of success. Just as stochastic models account for variability, hard work positions us to seize those lucky opportunities when they come our way.

Understanding randomness allows for resilience against life's inherent uncertainties. Nassim Nicholas Taleb emphasizes in ‘Fooled by Randomness’ that while hard work is essential, luck plays a significant role in success. In his view, many successful individuals attribute their achievements solely to hard work, overlooking the impact of randomness and chance. Taleb argues that being prepared for unpredictable events and recognizing the influence of luck is crucial. He believes that acknowledging this interplay can lead to a more realistic understanding of success and failure in life. To avoid being fooled by randomness, Taleb suggests cultivating awareness of uncertainty, embracing humility, diversifying risks, and focusing on long-term outcomes rather than short-term results.

Exploring the journey from novice to expert

There is a Korean series ‘Forecasting Love and Weather’ that details the lives of weather forecasters. There is a scene in which the second-in-command asks the head how was he able to achieve his record of making the greatest number of accurate weather forecasts? The head replied that he did so by also achieving the record for making the greatest number of non-accurate weather forecasts. As an expert, he has simply tried more than the novice or mid-level forecaster has even forecasted. People have a distorted view of reality when they look up to successful people, but they fail to see the struggles behind it. This point is as relevant for us as actuarial professionals as it is for anyone else.

So one way to strategize your journey is to focus on mastering the fundamentals so that in the future, you can use it as a ladder to diversifying into broader roles and work streams. Or as Pablo Picasso said “Learn the rules like a pro, so you can break them like an artist”¹.

The core of actuarial work is technical expertise in areas such as probability, statistics, financial mathematics, and risk modeling. The first step toward leadership in any technical field is establishing a solid foundation in the core skills. This includes:

• Passing Actuarial Exams: Completing the exam requirements is essential. For actuaries in the U.S., this means earning a designation like Associate (ASA) or Fellow (FSA) from the Society of Actuaries (SOA) or a similar designation from other actuarial bodies like the Casualty Actuarial Society (CAS) Institute and Faculty of Actuaries UK (IFoA) as well as various other actuarial bodies.

• Developing Specializations: As you progress through your career, you’ll likely specialize in areas such as life insurance, health insurance, pensions, or enterprise risk management. Deep expertise in one area can help you stand out when leadership roles are available. Barrack Obama rightly gave a very valuable suggestion that be the person to whom others come knowing that he/she can get the work done. It doesn’t matter what work it is, just learn how to get stuff done2. The allure of technologies creating the future is very attractive and it’s tempting to start innovating to make your mark in the world. But most of it will come on the back of your existing track-record. If you are not good at your current role, people will look at that lack of track-record as a disadvantage and reserve the judgement that a person doesn’t have the aptitude for perseverance, hard work and discipline to execute the innovation.

• The purpose of actuarial exams is not to turn someone into a 'know-it-all.' Instead, these exams focus on building core competencies and enhancing one’s ability to learn and adapt. Over time, with experience, tasks that once took 3 months can be accomplished in 3 weeks. The goal is to apply the knowledge gained to real-world work performance, not to simply earn credentials and then step back after qualification.

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Other important tenets

Gaining diverse experience is a critical step towards leadership roles. Many successful actuarial leaders have worked across different product lines and departments within their organizations. This breadth of experience provides a comprehensive understanding of how various actuarial functions contribute to the overall business strategy. For instance, working in both pricing and reserving can give you insights into the full lifecycle of insurance products. Additionally, seeking opportunities in adjacent areas like underwriting, data analytics, or even finance can broaden your perspective and make you a more well-rounded candidate for leadership positions.

Developing business acumen is another crucial aspect of preparing for leadership roles. Actuaries aspiring to management positions need to understand how their work fits into the broader business context. This involves familiarizing yourself with your company's strategic goals, market position, and competitive landscape. Take time to understand financial statements, key performance indicators, and how actuarial decisions impact the bottom line. Engaging in cross-functional projects or seeking out opportunities to work with other departments can provide valuable exposure to different aspects of the business.

Leadership and communication skills are paramount for actuaries looking to move into management roles. Technical expertise must be complemented by the ability to lead teams, influence decision-making, and effectively communicate complex concepts to non-technical audiences. Aspiring leaders should actively seek opportunities to lead projects, mentor junior colleagues, or take on team lead roles. Participating in industry committees or professional associations can also provide valuable leadership experience. Additionally, consider formal leadership training or pursuing an MBA to develop a more comprehensive management skill set.

Networking plays a crucial role in career advancement. Building relationships both within and outside your organization can open doors to new opportunities and provide valuable insights into leadership roles. Attend industry conferences, participate in webinars, and engage with professional associations. Within your company, seek out opportunities to interact with senior leaders and colleagues from other departments. These connections can provide mentorship, offer different perspectives on the business, and potentially advocate for your advancement.

Demonstrating initiative and strategic thinking is essential for standing out as a potential leader. This could involve proposing innovative solutions to business problems, leading process improvement initiatives, or identifying new market opportunities. Show that you can think beyond your immediate tasks and consider the long-term implications of actuarial decisions. Develop the ability to anticipate future trends and challenges in the industry, and propose proactive strategies to address them.

Finally, it's crucial to quantify and showcase your contributions to the organization. Keep track of projects you've led, process improvements you've implemented, and any measurable impacts on the business, such as cost savings or revenue growth. When opportunities for advancement arise, you'll be well-prepared to demonstrate your value and readiness for a leadership role.

Conclusion

We must remember that the transition to a management or leadership position is rarely instantaneous. It often involves gradual progression of taking on more responsibility, demonstrating leadership potential, and proving your ability to drive business results. Stay patient, remain persistent in your efforts to grow and develop, and be open to feedback and continuous learning. With dedication and strategic career planning, you can position yourself as a strong candidate for actuarial leadership roles and make a significant impact in your organization. By focusing on these areas, you'll position yourself as a strong candidate for management and leadership roles in the actuarial field. Remember that progression often takes time, so remain patient and persistent in your efforts. The adventure of our journey is not to know what we eventually might end up becoming.

1. https://www.goodreads.com/quotes/558213-learn-the-rules-like-a-pro-so-you-can-break

2.https://www.linkedin.com/feed/update/urn:li:activity:7078549210865827840/