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The Society of Actuaries (SOA) is the largest professional, actuarial organization in the world. It is dedicated to serving its 19,000 members, and the public. The SOA's vision is for actuaries to be recognized as the leading professionals in the modeling and management of financial risk and contingent events. The SOA is committed to:
- Education–Providing basic education in the fundamental principles of actuarial science, advanced education, professional development and continuing education for practicing actuaries.
- Research–Conducting research to develop studies of historical experience and techniques for projections into the future, analyzing the actuarial aspects of public policy issues and providing the foundation for further expansion of the profession.
- The Profession–Promoting high standards of professional competence and conduct within the actuarial profession.
The designation Fellow of the Society of Actuaries (FSA) recognizes that an individual has demonstrated knowledge of the business environments within which financial decisions concerning pensions, life insurance, health insurance and investments, health benefit systems, finance, life insurance and retirement systems are made including the application of mathematical concepts and other techniques to the various areas of actuarial practice. The designation Associate of the Society of Actuaries (ASA) recognizes an individual that has developed an understanding of the basic mathematics underlying actuarial science and of the application of fundamental mathematical concepts to technical actuarial problems. The Fellow has further demonstrated an in–depth knowledge of the application of appropriate techniques to a specific area of actuarial practice.
The president of the SOA is Bruce Schobel, FSA, and the president–elect is Cecil Bykerk, FSA.
A History of the Actuarial Profession
The actuarial profession in North America began in the early 19th century, built upon principles that had been used in Europe since the mid–century. During the last decade of the 19th century, there were less than 100 North American actuaries, though the numbers were growing. The Society of Actuaries traces its roots to the Actuarial Society of America, which was formed by a select group of chief actuaries at well–established life insurance companies such as Canada Life Assurance Company and Lincoln National Life Insurance Company. In 1909, their counterparts at newer life insurance companies formed the American Institute of Actuaries. In 1949 these two groups merged to form what is now the Society of Actuaries. Today SOA services a membership of over 19,000 in the United States, Canada and around the world.
The Society of Actuaries Today
SOA members typically align themselves within one of these sections:
- Finance–including risk management and dynamic financial models
- Health–including managed care, Medicare, healthcare, providers, payers and premiums
- Life Insurance
- Retirement/Pension
- Special Interest–areas including investment, long–term care, international and regulatory
As the needs of businesses and individuals have evolved, so have the contributions of SOA membership and actuaries everywhere:
- When the Social Security System was formed in the late 1930s and pension systems were developed during the next several decades, actuaries were heartily involved in this burgeoning area.
- As modern health insurance policies began to be issued in the middle of the 20th century, the skills of actuaries were required and today, actuaries are heavily involved in disease modeling.
- In the latter part of the 20th century, financial markets expanded and new financing tools were developed, leading to new responsibilities for financial actuaries.
- As lifestyle improvements became important, consumers demanded credit for these healthier lifestyles, which led to actuaries helping develop preferred life insurance credits for such things as non–smokers.
- The diversification of many types of businesses has led to organizations having much larger and wider–ranging risk profiles than ever before. These risks encompass personnel, insurance, financial, economic and legal issues. Due to their quantitative and qualitative skill set, actuaries are leaders in analyzing these risks, which is known as enterprise risk management (ERM).
- Just as the baby boom generation turns 60, current retirement systems are not sustainable. Actuaries are leading the way in developing a framework around 21st century retirement systems.
Research Helps Drive Creative Solutions to Complex Problems
Research is a cornerstone of the SOA, with over 50 research projects underway at any given time. Traditionally the SOA has performed experience studies, which collect and analyze data from multiple insurance companies. These studies then give those companies a broader perspective in any number of areas.
The SOA is also leading an industry–wide project that is looking at the effects of preferred valuation mortality in life insurance. These studies obtain data and report experience on policies issued under the preferred underwriting paradigm.
The SOA also performs independent research on a variety of topics that are geared toward issues concerning organizations and individuals. These include:
- "Living to 100"–as a growing number of people reach this milestone, the SOA is researching the financial impacts on the aging population.
- Pandemics–the SOA is researching the potential effects on life and health insurers if a pandemic hits the United States.
- Secondhand Smoke–an SOA study found that the annual cost of excess medical care, mortality and morbidity from secondhand smoke exposure in the U.S. is approximately $10 billion.
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