2010 Presidential Address

Donald J. Segal, FSA, FCA, MAAA, EA

President, Society of Actuaries

Delivered at SOA 2010 Annual Meeting, New York, NY.

Thank you!

It's an honor to stand here among the world's finest risk management professionals!

Even better, I get to assume office here in New York City, my hometown!

I'd like to begin by thanking Mike McLaughlin. He leaves a strong legacy within the SOA. Mike, thank you for your leadership and guidance over the past year.

I'd also like to welcome Brad Smith as president-elect of the SOA. Brad is the chairman of Milliman, has previously served as vice president of the SOA, and is an emeritus trustee of the Actuarial Foundation. Brad, I look forward to working with you in the year to come!

Since I was elected in 2009, I'm guessing you haven't kept current on my bio. Let me tell you a little bit about myself. I entered the field in 1960–1958 if you count my summer programs. Probably before most of you were born. Since 1966 I have been a consulting actuary providing plan design, advice and valuation services to sponsors of qualified retirement plans. That's the very brief story on me.

Let me tell you about the year ahead of us.

Our Strategic Plan provides direction for the SOA. We want to make sure the wind doesn't blow in a different direction each time a new president receives the badge of office. I describe my commitment to the Strategic Plan and the work of the SOA with five simple concepts that I will focus on in the year to come. I call these "the five C's". They are:

• Commitment to our Profession,
• Communication,
• Collaboration,
• Customer Focus and
• Continuing Professional Development.

The first is Commitment to the Profession. I'm sure you've all had this conversation:

"What do you do?"
"I'm an actuary."
"What's that?"

Many of us answer this question by saying:

"I work in life insurance." Or
"I do the design and costing of pension plans."

We describe what we do, not what our skill sets are. We should define ourselves by our skill sets – not just by what we do! A better response might be: "I'm a professional who measures and analyzes financial risks."

Actuaries have an important skill set. We manage risk. And for most entities, their financial health is the bottom line. What's more important than that? We tend to categorize ourselves as "traditional" or "nontraditional" actuaries. We're not doing ourselves any favors with these labels. We are pigeonholing ourselves. Actuaries can do anything. Our skills apply in many areas!

Let me give you an example of one actuary I've had the privilege of working with. His name is Nick Blitterswyk. He received his FSA in 2008 and I worked with him at JPMorgan. He then founded Urban Green Energy, a company that manufactures small-scale, vertical axis wind turbines. An environmentalist at heart, he wanted to use his actuarial skills in the clean energy sector.

I asked Nick, as the CEO of this groundbreaking company, "Do you use your actuarial skills?" He responded, "Every day!" He says that the finance track benefited him in starting and running a new business.

In addition, the discipline required to study for exams prepared him for the inevitable hard work and bumps in the road when starting a new company.

I'm sure there are other stories like his, but there should be even more!

Our Past-President Walt Rugland coined the phrase, "Ask an Actuary." I think that says it all. You got a problem? You need an answer? Ask an actuary.

The second "C" is Communication. If you don't communicate, you can't do much else. We need to have more communication with our members, not "to", but "with". All too often in our world, communication is viewed as one-way. Communication must be an exchange of information.

The SOA must provide the tools and the means for members to engage in these conversations.

The SOA is doing a better job of communicating with members. Mike talked about how we are doing this yesterday. We've got the blog, Interactive Leader Sessions, and Meet the President to name a few.

In 2011, I want to continue this commitment to open communication. We will be working to create better connections between the SOA and members and candidates. We also want to provide more ways for members to connect with each other. This includes engaging social media tools, local actuarial networks and our sections.

For the SOA to advance our profession, we need to hear from you. We want to know how we can work on your behalf, what's working well, what isn't, and where you need to know more. I'd also like to issue a simple challenge by asking the question, "How better can we hear from you?"

You can let us know by sharing your ideas. From any part of the SOA website, you can click 'Contact Us' at the bottom of the page to share your ideas. You can also e-mail me anytime at dsegal@soa.org, or catch up with me later at this meeting.

In addition, increasing the transparency and accountability from the Board to members will be an important part of our work this year. We must do more in letting our members and candidates know what the Board is doing and find more ways for members to have input into what board priorities should be. We do our best, but we also welcome your ideas. In return, we will work hard to communicate with you about what's happening within the SOA.

So that's my second "C "– consistent, credible two–way communication.

The third "C" is Collaboration. Collaborating is much more than just cooperating with others. When we cooperate, we get along. When we collaborate, we "co-labor". We work together to achieve our goals.

I am committed to working with our sister actuarial organizations in North America and worldwide to identify opportunities to build partnerships. Collaborating will allow us to get the most done. By working together, our voice is louder, our perspective is sharper, our body of knowledge is stronger, and we better serve our members and candidates.

The fourth "C" is Customer Focus. When I talk about customers, I talk about our stakeholders. Who are they? They are members, candidates, employers, clients, the general public, and governmental entities and agencies.

The SOA works hard to serve each of these groups–and this, in turn, helps each of us to serve our own customers! We are constantly working to better serve all members. One particular group of customers is the growing number of SOA members who are outside of the U.S. and Canada. As Mike mentioned yesterday, this number is 12 percent and growing! This means that we can't just THINK or SAY we're an international organization. We have to BE an international organization. We have to look at how we can better serve actuaries who practice internationally, not just in North America.

We are in the process of developing an international membership strategy, which will determine how we grow outside of the U.S. and Canada. We are looking at the areas of highest potential SOA growth. We are also looking at how to better serve members and candidates as our profession develops in these areas.

And that brings me to my fifth and final "C"– Continuing Professional Development. And development is the key word here. Development is the exchange of ideas. It's making contacts in your area of specialty. It's continuous learning, and it doesn't necessarily take place with an open book or in front of a computer.

My passion for continuing education is well-known. I've served on program committees for the SOA, CCA, the Enrolled Actuaries Meeting, and on two IRS Advisory Committees. You all know about our Continuing Professional Development requirements – I won't get into detail about them here. We should be constantly learning on our own! It's something we all must do to keep our credentials. Our continued development ensures that we are the best of the best in risk management.

The world changes quickly. There is a great opportunity for actuaries to capitalize on these changes and use our skills to help our employers and clients manage their risks, whatever they may be. I encourage each of you to seek to educate yourself more, not only in developing depth in your specialty area. Make a conscious effort to learn something new outside of your "sweet spot". Don't just earn your hours because they are nearby or convenient – be thoughtful about it. Our Competency Framework can help in this regard.

Participate in sessions that will teach you something new or help you expand your existing skills.

I hope you'll explore new horizons through your lifelong learning and commitment to our profession.

Those are my five C's. Commitment to the Profession, Communication, Collaboration, Customer Focus and Continuing Professional Development.

I'd like to wrap up my time here today with an excerpt of an e-mail I received. It's from a young woman, an FSA, I worked with for about five years. She was educated in China and was wonderful to work with, smart, nice, a quick learner, and she flew through the exams. She asked me for a reference, as she has decided to return to China. When I asked her why she was returning, this is what she said: "I would like to participate in China's growth. China just opened up a variable annuity market, which is my area of practice. The pension market is also growing, mostly in the area of enterprise annuities. China is quickly growing into an "older" society. People there are living much longer as living conditions improve greatly. People are also much richer. The people like aggressive investments like stocks and real estate but there are no other investment channels. Equity-linked insurance products like variable annuities or participating insurance are easier to sell than protection-type products. Also, there is basically no ALM in China because there is no developed bond market. ALM and risk management may be hot areas in the next 20 years if the bond market can develop quicker. My recent experience in the U.S. is ALM and risk management. Many of my friends in finance have returned to Hong Kong or Shanghai. I hope we can develop the capital market using the expertise built in the U.S. This will help insurance risk management."

This is a perfect example of what we can and should be doing with our skills–identifying new areas where they can be put to use. This is the future of our profession. I am really looking forward to working with you and on your behalf in the next year.

Thank you!