The Yin and Yang of Consulting

By Russell Gao

When I graduated from college, I knew I wanted to be an actuary, but I was still facing a variety of choices: life insurance, health insurance, and consulting. I had two insurance internships and a banking internship, but like most fresh college graduates, I have never had a close encounter with consulting. The Yin of consulting seems daunting: far longer working hours, shorter study time, and the possibility that an important client is on fire a few days before your exam. The Yang, if there is any, seems feeble: possibly more diverse work and a broader networks from meeting with clients. So why would you go into consulting? Certainly, not everyone would or should start an actuarial career in consulting. I hope this essay can free you from some stereotypes and help you find your own answer to the question.

The Yin

Generally, consulting actuaries do work longer hours. For certain time-sensitive projects such as merger or reserving, you may work more than 60 hours a week for a period of time. The period depends on the project, from my personal experience, it can vary anywhere between 2 to 10 weeks. There will be a couple projects like this every year, but they are more of an exception than the norm. Most of the time, the working hour is fairly reasonable, between 40 to 45 hours.

Most likely, you'll work more intense hours rather than longer hours compared with an insurance job. You may need to work through lunch. You will need to be creative and be able to multi-task. You must learn new things constantly. You are never fully comfortable when approaching a project, because no two projects are same. This is a major difference from working in insurance, where sometimes you are just updating the same spreadsheet and can be an expert after a few quarters.

There can be quite a bit of travel. Travelling usually takes away your personal time, whether you planned to use it for study or leisure. To me, "shorter study time" is a myth. You may have to move around your study time to accommodate work, but I always got my study time. My eligible study hours are comparable to what is offered in a student program in an insurance company. We also had an excellent protection program which saved me from working over 40 hours (including the study time I take) six weeks before the exam. But if you like to follow a rigorous schedule and not worry about whether you have taken enough study time, "flexible study time" may be a yin.

The Yang

You can learn much more in the same time of an insurance rotation. The project life cycle is usually between one to three months, so you don't have to wait a year to work on new things. For instance, I transitioned to a reserving project after a three-month pricing project smoothly. Projects are assigned based on your development needs and client needs, so when possible, you can choose between learning new things and building expertise in an area of your interest.

You can work on some of the cutting edge projects that you often see in industry meetings: economic capital, principles-based reserving, insurance securitization, and so on. Often times you will be working with industry experts on such a project and receive excellent training and guidance.

You can work with colleagues around the world and learn from them. For example, I worked with internal experts in London, Sydney, Tokyo, and across the United States on a variety of projects. You can also learn from your client's ideas and network with them.

You can see experiences and approaches in different companies and gain an industry perspective.

You can assist in innovative research and publish with internal experts.

If you like travelling, visiting different cities and interacting with different people is a yang.

The Truth

When I was thinking through my choices, I was offered two pieces of advice: "follow a fast-track career" and "take a calculated risk." I really wanted to work on cutting edge projects and to work on different things constantly. So despite the fact that I never tried consulting, I joined the life insurance practice of a global consulting firm.

The truth is, consulting is a great way to launch your career if you are motivated, energetic, and focused. You will learn more than your peers in the same amount of time, but you do so by working more hours and working more intensively. Consulting provides you such an opportunity, the choice is yours.

As the current SOA slogan suggests, "Risk is Opportunity". Being an actuary is not about avoiding risk, it is about taking a calculated risk.

Russell Gao, FSA, is a graduate student at the Haas Business School, UC Berkeley. He previously worked as an actuarial associate at Towers Perrin–Tillinghast. The views expressed here are the author's alone and do not represent views of his former employer.