Announcement: SOA congratulates the new ASAs and CERAs for May 2022.

Guest President's Speech

Guest President's Speech

Fellow SOA Members:

The October/November 2005 issue of The Actuary included an article entitled "Structure Matters" by outgoing President Steve Kellison. This article was a "shot heard around the actuarial world," giving clear voice to some important and widely held perspectives on the structural challenges faced by the actuarial profession and the need for greater collaboration, efficiency and effectiveness in advancing our shared goals.

Just last month, at the June 2007 meeting of the SOA Board of Governors, we invited American Academy of Actuaries President–Elect Bill Bluhm to speak about changes affecting the actuarial profession. Bill delivered a powerful and eloquent address on the Academy's new vision and strategy, which are built on a foundation of collaboration and professional unity. This vision represents further progress along the path toward a more effective profession. We are pleased to include Bill's address in this issue of The Actuary beginning on page seven. We wholeheartedly endorse this approach and invite you to read, consider and, we hope, respond positively to this message.


Ed Robbins, SOA President
Bruce Schobel, SOA President–Elect

The U.S. Actuarial Profession at a Crossroads

Good evening, fellow actuaries.

Notice my choice of words. I did not say "fellow SOA members," or "fellow Academy members." Nor did I say fellow life or health or pension or casualty actuaries. Fellow actuaries. As if, maybe, we might all be part of the same profession.

Imagine, if you will, a profession not ridden by rivalries, suspicion and mistrust. A profession that doesn't waste scarce resources fighting over turf. A profession united. Professionals who can collaborate when their interests are in common, and who can negotiate when their interests conflict.

Do you think we can achieve that? Is it worth achieving?

I think it is, and I think we can. Tonight I intend to talk about the vision shared by many leaders of our profession. My goal is that you come to understand and believe in that vision yourself.

The history of our profession is a story of splinter groups, formed when the existing organizations didn't meet their needs. What were our predecessors thinking? It's hard to say. Whatever it was, it was thinking that persisted until, from the SOA originally being the sole actuarial organization in the United States, we have the five separate U.S. actuarial associations today.

I suggest to you that, whatever that thinking was, it is now–and probably always was–counterproductive.

Actuaries used to have a comfortable, well defined area of practice, with little competition. We did work nobody else wanted to do–and probably wouldn't know how to do, even if they had wanted to. And we got paid pretty well for it. We were in demand and in control.

Now the field is changing, in every area of practice. New players are challenging our hegemony. Some of the work we took for granted is drying up, and the rules are changing. Some of these new players even speak a foreign language. Literally.

And as we try to compensate, by expanding our horizons, we find that the outside world doesn't understand who we are or what we can do. They see us as numbers crunchers, not as problem solvers. They shake their heads at the incomprehensible language we speak, and turn a deaf ear. They think twice about opening their checkbooks to hire us because they've suddenly discovered they can hire somebody cheaper. Not better, necessarily, but they don't know that. And they don't care.

What I'm describing isn't news to you. The SOA has recognized this and tried to address it in different ways over the past few years.

Given this growing threat, though, does it seem to you like a good idea to continue to squabble amongst ourselves, over issues that nobody else cares about? Or does it make better sense to put our energy into having our whole profession answer the challenges?

Our leaders for many years invested huge amounts of time in dealing with friction and coordination within the profession, looking inward rather than dealing with the very real outside threats we face. They tried many times to unify the profession, through major proposals that were well intentioned but doomed to failure. Most recently, in fact, the CRUSAP draft report echoed the lofty goal of a unified profession.

I heartily agree with the long–term goal of unification. However, I don't believe it can be accomplished until we have solved the structural and procedural issues that keep us divided.

How can we do that? It turns out that we already have a mechanism that lends itself to addressing this issue, and it's housed at the Academy.

You may know that the SOA's president and president–elect are automatically named directors of the Academy, along with those of the other four U.S. actuarial organizations. This is almost half the Academy board. This gives us a regularly scheduled vehicle to address inter–organizational issues and plans.

To better serve the profession in its mission, this year we strengthened the four organizations' representation in the Academy, by creating the Council of U.S. Presidents, or CUSP. This is the place where the five organizations, represented by their presidents and PE's, can come to:

  • Work together,
  • Coordinate resources,
  • Eliminate wasteful duplication, and (most importantly),
  • Plan the profession's strategy.

I urge you to think of the Academy as, more than ever before, an organization of organizations, rather than an organization of individuals. That's the vision we need to keep in mind as we go about our gradual work of unifying the profession.

This has already started to yield results, in the strategic way that we (the U.S. profession) have started dealing with the IAA, and with a host of other issues.

By the way, it is my judgment that the IAA is still in shock about facing U.S. delegations that work together to a common end. And–they haven't even begun to see the full impact.

Our aim is to include the point of view of each of the U.S. organizations, on every relevant issue, and to forge profession–wide positions and initiatives that we can all stand behind.

I suggest to you this fundamental principle: That, in most or all situations, the added power of unified U.S. positions, processes and infrastructure, are well worth the compromises we need to make to achieve them. Many of the historical barriers to such cooperation were not substantive, but rather were missed communications, catalyzed by a good helping of mistrust.

What work will we need to do? What resources will we be able to marshal to do it? This is what the Academy's Strategic Planning Committee has been working on since last October.

As president–elect of the Academy, I have been charged with revising the strategic plan. The creation of CUSP was the first result of that work. My presidential year will be spent in continuing to translate that strategic plan into strategic reality–in partnership with our other U.S. actuarial organizations.

Let me tell you a little more about what we're building.

The Strategic Planning Committee began with the Mission:

The Academy's mission is to serve the public on behalf of the United States actuarial profession.

Let me repeat this.

The Academy's mission is to serve the public on behalf of the United States actuarial profession.

We will do this through eight core functional areas identified by the strategic plan:

  1. Professionalism.
  2. Advice to public policymakers.
  3. Advocating on behalf of the public.
  4. Recognition and communication.
  5. Coordination and representation.
  6. International representation.
  7. Member services.
  8. Governance and management.

Under these eight core areas, the full plan has 32 strategic goals, and 86 initiatives to support those goals. So have another glass of wine and settle in for a while.

No, actually, I will just give you four highlights.

First, in the core area of international representation.

The world is flat. This used to be an expression of outmoded, archaic thinking. Now it is a new reality, defining the world of finance. National boundaries are dissolving, but the rules for doing business haven't kept pace. Consequently, actuaries' employers and clients are requiring them to play by different and changing rules. Eventually, globalization will touch all of us in significant ways. We can either be ready for that, or not. Which would you rather be?

CUSP has asked the Academy to be the coordinating organization for the United States in the international arena. We are helping the profession develop, for the first time, an articulated international strategy. Not just for dealing with the IAA, but also with the IAIS, IASB, the World Bank and other international organizations.

The second highlight is in the core area of professionalism: As I've mentioned, the board this year created CUSP, charged with harnessing on a regular basis the collegiality of the leadership of the U.S. actuarial organizations, and collaboratively leading appropriate activities on behalf of the profession.

CUSP will be the entity to whom the ASB and ABCD report. Now CUSP has agreed to manage this, on behalf of the profession. Already, we are breaking new ground with both of these organizations.

The third highlight is in the new core area of advocating on behalf of the public.

In keeping with our newly articulated mission of serving the public, we believe the profession has an obligation to speak out, where the public interest is not being served due to a lack of actuarial information.

Toward that end, the Academy board has agreed to create a public interest committee that will address the public's interest in ALL Academy areas, including managing this new advocacy role.

The fourth highlight involves communication and coordination.

Some of the most obvious examples of overlap and duplication in our profession are in the area of communication. The Strategic Plan has asked us to facilitate, develop, implement, and monitor a profession–wide communication plan, coordinated through CUSP. Obviously, this is going to take a fair amount of collaboration. And a significant amount of trust, coupled with a willingness to work hard through turf issues.

This past week, a good friend of mine starred in an amateur play. The creation of a play offers an apt analogy for this work we're doing–Drama; comedy, heartbreak, hilarity, pathos, pity and terror, and sturm und drang.

That's because, unlike teamwork, which tends to be instinctive, collaboration is deliberative and usually takes place behind the scenes. By the time the audience sees the play on stage, it looks effortless. It even looks like fun. The audience has little or no idea of the process behind it. Nor does it care.

Here's that process: The playwright has a vision. A producer buys it and hires a director to shape it. Together, they cast actors to embody it. They hire lighting and set designers, costume and prop masters, to root it in time and place.

And it all happens smoothly and seamlessly, in an atmosphere of total harmony.

–NOT! Not even close.

Collaboration is often not pretty. It may not even be nice, because one of its essential ingredients is friction. Without it, nothing much interesting happens. With it, sparks fly. Ideas are born. Initiatives are launched. Edward Land, inventor of the Polaroid Land camera, once said that "politeness is the enemy of collaboration."

So where does that leave us? Ours is a profession with not one, not two, but five and perhaps now even six organizations to represent us. It's a profession of smart, headstrong, determined, often highly individualistic people, who are utterly convinced of the rightness of their various positions. Those differing positions create conflict. We always thought that was a bad thing. It's not. It's perfect. Bring on the collaboration, and let's learn how to resolve those conflicts.

So–That's the vision. That's the direction I and our colleagues on the Strategic Planning Committee, the Board of Governors and CUSP, agree the profession needs to head in. Our goal is to make the profession strong, healthy, competitive, and most important, relevant in the years ahead.

Many of you sitting in this room will be the president of the SOA or one of the other associations in future years. Do you really want to spend your time as president squabbling over turf? Or would you rather lead a dynamic profession that's sure of itself, confident of what it can contribute, and smart enough in using its resources to make an impact on the rest of the world?

The profession is at a crossroads. We need to recognize this, and take the necessary steps, away from mistrust and divisiveness, toward unity and collaboration. I believe that the Academy and CUSP are the perfect vehicles for this journey. Other leaders believe this, as well, and tonight I invite you to share in that vision.

Thank you.

Bill Bluhm is president–elect of the American Academy of Actuaries. He can be reached at his Milliman office in Minneapolis at 952.820.2450.