The Actuary Magazine October 2004 - Risk And Rewards

Risks and Rewards

by Sam Phillips

Francois Bourdon, FSA, was chosen co-recipient of the Professional Risk Manager (PRM) Candidate of the Year award for 2004. Awarded by the Professional Risk Managers' International Association (PRMIA), the PRM designation is a highly regarded certification among risk professionals. According to PRMIA, "Francois Bourdon was an actuarial cross-over candidate whose outstanding performance on the exams of the PRM program and his excellence in elucidating the role of risk management in the firm impressed our reviewers." Given these facts, The Actuary decided to ask Mr. Bourdon about his recipe for success.

You are clearly an excellent communicator. How did you develop your communication skills?

I've never really considered myself an excellent communicator. I've had to work hard at improving my communication skills and I was lucky enough to be exposed to many different things since the beginning of my career. I won't go into details on my life's path, but what worried me the most in high school was making public speeches; even short ones in front of a 15-person class. Since I'm not a naturally gifted communicator, one of the tricks I find very useful is to refer to examples and analogies to explain my thoughts. Another is to always try to incorporate my sense of humor and go straight to the point.

As far as my career goes, I started out like many actuarial students, working in an insurance company. Fortunately, I was in the marketing department, being the guy that answered the tough actuarial/contractual questions. I say this was fortunate because it was there that I had the opportunity to be around very good communicators from whom I learned communication tools without even realizing it.

A couple of years later, in a totally different environment, I had the opportunity to take on a big challenge-running a marketing/product development department, where I had one actuary and nine people responsible for marketing on my team. During that time, I began doing presentations in trade shows where I would explain our products and speak in front of large crowds. I'm currently doing investment management (running a global tactical asset allocation hedge fund among other things) where I have to explain our strategies to clients who have different levels of technical expertise. Not being afraid to take on new challenges was the key to the improvement of my limited communication skills.

How did you get into the risk management area?

I worked on ALM for an insurance company for two-and-a-half years, worked on segregated funds (variable annuities) pricing, risk mitigation, capital requirement, product development and marketing for two-and-a-half years. I then worked on investment strategies, market risk and operational risk for an investment management firm for the last three years. So, my progression into risk management came naturally. Currently, my responsibilities are to purchase risk and manage the combination of those risks according to a return objective. Risk is probably 40 percent of my life, return is 50 percent and communication to clients is 10 percent. I love the investment field because it is so wide and complex, also because it changes continuously.

In your opinion, what does the typical actuary need to do to improve their chances of involvement in the risk management field?

The typical actuary needs to be open to opportunities, not be afraid to try new things and be proud of the knowledge he acquired throughout his career and education. Actuaries have always been involved in risk management, but more specifically oriented towards insurance companies and pension funds. We approach risk with more of a solvency concern. It is very easy to transport those thoughts to a broader view of risk management encompassing solvency, operational and other aspects of risk.

Is there one actuarial area of practice that is better suited for moving into risk management?

The area I'm most familiar with is investments. I'd say this is the easiest route since the tools I've learned through my training as an actuary are very similar to many financial engineers and risk managers.

Do you have any other advice for actuaries looking to move into the risk management field?

The only advice I'd give is to follow your desire and not be afraid to take on new challenges. If risk management is what you feel will bring happiness to your career, do not hesitate to take an active role in your career development and get involved.

I'd like to give a little publicity to PRMIA, since the award has provided me so much recognition, by saying that people interested in risk management should get involved in their local PRMIA chapter. There are local PRMIA chapters all around the world and they really appreciate actuaries' company.

Sam Phillips is associate editor at The Society of Actuaries.