SOA Board Launches Partnership with Casualty Actuarial Society on Enterprise Risk Management Strategy

• For Immediate Release: March 4, 2005
• Contact: Cheryl Enderlein

At its February 24–25 meeting the SOA Board of Governors took decisive action to pursue a strategy to help the actuarial profession benefit from new opportunities in Enterprise Risk Management (ERM) in full partnership with the Casualty Actuarial Society (CAS) and in cooperation with each North American actuarial organization.

"Our strategic plan is focused on creating new opportunity for actuaries in both the traditional and broader financial services sectors," said SOA President Stephen G. Kellison, "and this broad and inclusive strategy will help put actuaries in a position to successfully compete for new positions in the field of enterprise risk management."

He added that the SOA is committed to working closely with the American Academy of Actuaries in the U.S. and the Canadian Institute of Actuaries in Canada as well as other North American actuarial organizations to advance actuarial opportunities in enterprise risk management.

The adopted ERM strategy statement, developed by a task force including members of the SOA Board, Risk Management Section and other key individuals, calls for the Society of Actuaries to work to "further and establish the position of the actuarial profession as the preeminent profession in the field of enterprise risk management" and to "work as full partners with the Casualty Actuarial Society as the leaders of research and education initiatives within the actuarial profession."

Financial economics content added to ASA exams

Acting on a recommendation by the Financial Economics Advisory Group, the Board also directed that additional financial economics content be added to ASA exams in cooperation with examination co–sponsors: the Canadian Institute of Actuaries and the Casualty Actuarial Society. More advanced, application–driven content will be included in the Fundamentals of Actuarial Practice (FAP) modules and on the FSA syllabus.

This change was made to maintain the profession's credibility in traditional roles and facilitate expansion into enterprise risk management roles within the broader financial services sector. The additional content will be included with no increase to the number of examinations and the changes will be made no sooner than the 2006 preliminary exams.

"The fundamental principles of financial economics underlie many aspects of financial security systems and must be part of an actuary's basic education," said Kellison, adding that increased scrutiny of the profession and competition with other quantitative financial risk management professionals are driving forces behind the SOA's decision.

This decision also allows the SOA to strengthen its compliance with the newly inaugurated educational guidelines of the International Actuarial Association.

Nominations and elections process enhanced

The Board also approved a series of recommendations by the Task Force on Nominations & Elections, chaired by former Board and Strategic Planning Committee member Sam Cox. The Task Force was directed by the Board to help develop ways to identify a wider range of qualified candidates from the membership who fulfill identified needs, including leadership, vision and strategic thinking. The approved recommendations will enhance the candidate identification process and revise the eligibility criteria to open Board membership to a broader range of qualified candidates.

Strategic plan metrics introduced

To ensure effective implementation of our strategic plan, the Board (with the support of the Strategic Planning Committee) has selected a variety of metrics to be monitored on an annual basis to measure progress toward strategic plan outcomes, such as "increasing actuarial employment," "improved stakeholder satisfaction and "increased volunteer participation." The Board reviewed results for the past year using the new metrics and will work to ensure these measures give an accurate picture of progress toward our goals.

"It's well known that what gets measured gets done," said Kellison, adding that while every measure "isn't perfect," they do represent a "significant step forward in our ability to evaluate progress and make needed adjustments."

About the SOA Board of Governors

The SOA Board of Governors establishes strategy and policy for the SOA and utilizes the Issues Advisory Committee (IAC) and four Strategic Action Teams to implement strategy. The Board receives input on strategic threats and opportunities to the profession and Society from the IAC, which regularly collects input from sections, members, staff and environmental scanning.