Letter from The President
Letter from The PresidentMoving the Profession Forward
[Here] are the themes that I plan to address in more detail over the next year—our education and examination program; more meaningful partnerships among the various actuarial organizations, especially in the United States; and increased transparency.
Like some other SOA presidents, I am planning to write a regular column in The Actuary. It's both a way for you to get to know me better and an avenue to keep you informed on issues that affect our profession.
This first column is for the benefit of those members who did not attend this year's Annual Meeting. Following is an excerpt from my acceptance speech given at the Presidential Luncheon on October 16:
These are the themes that I plan to address in more detail over the next year—our education and examination program; more meaningful partnerships among the various actuarial organizations, especially in the United States; and increased transparency.
In his speech yesterday, Ed Robbins spoke about the importance of continuity in moving the profession forward. One initiative that is just reaching completion is our Education & Examination redesign.
In 2002, the Board approved the redesign of our educational system. The redesign plan was shared with the membership in 2003, and the actual implementation has occurred over three years, 2005 through 2007. Among the goals of the redesign were to restore nation– and practice–specific content to the syllabus and to reduce the travel time to FSA. With the average age at fellowship remaining around 33 for the last decade, it actually takes less time to become a brain surgeon! This has to change if we want bright, young people to choose an actuarial career.
Having been involved as an E&E volunteer for 31 consecutive years, I am proud to announce that the final step in the redesign will be complete a few weeks from now, with the release of the last FSA–level module. The first new Fellowship Admissions Course will occur in March 2008. It will be a great honor as president to shake hands with the first candidates to attain their Fellowship under our new exam system.
One aspect of the new system is computer–based testing, or CBT. With this new capability, we are able to increase the frequency of exams in response to candidate needs and provide more flexibility in the exam process, both of which will reduce travel time. CBT has been instituted for Exam P and will be expanded to Exam FM starting next year.
Computer–based testing also allows candidates to get instant results on their exams. On our written exams, E&E staff and volunteers are working to reduce the time needed for grading and the release of grades. We need to reduce this down–time so that candidates can begin studying for their next sitting.
In the area of exam content, our Fundamentals of Actuarial Practice (FAP) modules emphasize real–world education over traditional testing. The FAP modules include readings, case studies, tests, exercises and even an on–line discussion forum. Topics such as "Role of the Professional Actuary," "External Forces" and "Risk in Actuarial Problems" expose pre–ASA candidates to practical situations, using the actuarial control cycle as a framework.
The modules also allow candidates to move at their own pace. In fact, the "buzz" about the FAP modules, and the education they provide, has been so positive that we are opening them up to anyone who would like to have access to them. We hope to see college students utilizing the FAP to become more aware of what actuaries really do—rather than getting inaccurate information like I did years ago in college.
In the coming year we will be working to establish more efficiencies within E&E, which includes greater electronic access and less manual processing of exams.
Through our E&E program, we'll also begin to establish better relationships with academic institutions in North America. In countries like Australia and, to a growing extent, Canada, universities are the foundation of the actuarial profession. In fact, I just returned from Australia where I learned more about their actuarial education system and how the Institute of Actuaries of Australia works closely with key universities.
The Australian actuarial education system is actually a partnership between the university and the Australian national actuarial organization. A similar partnership was recommended for the United Kingdom by the Morris Report. It allows students to complete part of their studies while getting their undergraduate degree and supports research. We need to explore how this might work in North America.
And that leads to my second point. Partnerships are crucial to the strength and success of our profession. In order to move ideas forward, we need to establish better relationships among our actuarial organizations. We need more joint projects and shared infrastructure. This is something many of our members have been asking for—and they're right.
The concept of partnering with our fellow organizations to achieve a common purpose is nothing new. Although certainly not the first to make such observations, Past President Steve Kellison wrote eloquently on the topic in the October 2005 issue of The Actuary. His article points out that the fractured state of our profession, with five actuarial membership organizations based in the United States alone, is a great obstacle in the path of creating a shared vision.
As Steve said, "Every hour spent in coordination and communication activity is an hour not spent actually doing something to advance the goals of the profession."
Our structure, or lack thereof, often creates counterproductive friction among the actuarial organizations. Our field is changing, with new, less–qualified competitors challenging our space. Now is the time to move forward in further unifying the profession.
We are moving in this direction with partnerships such as the Joint SOA/CAS/CIA Risk Management Section and working with the CCA on the annual Spring Employee Benefits Meeting. Our Enterprise Risk Management Symposium is a conference presented in conjunction with the CAS, PRMIA and the CIA, with increased attendance year after year.
These are tremendous steps in the right direction—and partnerships that perhaps couldn't have happened a decade ago—but we still have a long way to go, which leads to my third point.
One issue on which all of the North American actuarial organizations agree is the concept of increased transparency. In April, the North American Actuarial Council, the presidents and presidents–elect, signed a letter acknowledging that acting in the public's interest is paramount in the exercise of our actuarial responsibilities.
Encouraging more transparency in actuarial discipline cases is just one example of protecting the public's interests. We will work with other organizations and the ABCD to share information effectively without exposing ourselves to unnecessary legal risks.
We live in a world in which greater openness and accountability are necessary to conduct business. We hear about it in the news daily, and with good reason: Transparency holds officials accountable and builds trust.
The SOA is an organization with unquestionable integrity that embraces transparency. We have nothing to hide! We are willing to shine a bright light on what we do and show that our activities can withstand any degree of scrutiny.
For example, for the first time in the history of the SOA, we released the vote count from this year's presidential election because we want you to see how your vote makes a difference. By making these numbers available on the SOA Web site, as they are in our national presidential elections, we hope to encourage all Fellows to vote. As they say, "You don't get the right to complain if you don't vote!"
Transparency, or the lack thereof, affects our exam candidates as well. Candidates have felt disconnected with the E&E process for years, due to a lack of information. Starting in November, we will release the minimum passing score for our multiple–choice exams. Since our profession attracts the best and brightest, we know that candidates have been able to calculate pass marks on their own, anyway. We need to release this information ourselves rather than having candidates make "educated guesses."
Yesterday, in his speech, Ed discussed the Continuing Professional Development (CPD) requirement. Transparency is an important part of the work of your Board, and the exposure draft process is just one way we want to make sure you are connected to the Board's work. In November the Exposure Draft on CPD will be available to you for comments and we want your feedback. [The exposure draft was posted on the SOA Web site on November 8.]
Before closing, I want to thank you for voting to update our bylaws. The governing documents that they replace were created nearly 60 years ago and had undergone only minor changes in all that time. In the interests of transparency, we presented the constitution and bylaws on the SOA Web site so that you could compare the old and new documents. Our new bylaws align us with best practices, institutionalize effective governance and keep us current with Illinois law.
As a market– and section–focused organization, our strategic plan determines our future course. Increasing actuarial employment, maintaining the value of the credentials and enhancing the "Actuary" brand are a few of our nine strategic outcomes. To prioritize and hold us accountable to our plan, we use a balanced scorecard.
Our current plan has taken us to 2007. As Ed Robbins said yesterday, in 2008 we will update the plan to set future direction. We will get input from a variety of perspectives including section councils because we're all affected by the course of our organization.
At the beginning of my talk, I referred to three ideas to move the profession forward: improvements in Education & Examination, greater partnerships among the actuarial organizations and increased transparency.
Seeing such progress in our profession makes me happy I decided to become an actuary. I hope you will join us in moving these ideas forward. Thank you.