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SOA Stipend Award Recipients

SOA Stipend Award Recipients

The SOA's new Doctoral Stipend program is underway and the first five recipients have been chosen. Find out how each of them plans to make a difference as an academic actuary.

By Emily Kessler

In February 2009 the SOA launched the SOA Doctoral Stipend Program, offering $20,000 annual stipends to students pursuing both an actuarial credential and a doctorate degree in actuarial science or a related discipline. The Doctoral Stipend Program is a key part of SOA initiatives to strengthen the role of the academic branch of the profession (read more in the February/March 2009 issue).

We received 50 applications from well-qualified candidates at or applying to doctoral studies programs at universities in the United States and Canada: Over 30 percent of candidates already had an actuarial credential, and a little less than 30 percent had completed three or more exams at the time of their application. On April 15, 2009, the SOA Doctoral Stipends Awards Committee named the five recipients of the 2009–2010 doctoral stipends: Maciej Augustyniak; Rob Erhardt; Tao Guo, ASA; Jared Klyman, FSA; and Mike Nielson, FCAS.

"I am extremely pleased with the Society of Actuaries' success in attracting so many excellent candidates," commented Cecil D. Bykerk, FSA, and president of the Society of Actuaries. "It is rewarding to see such strong interest in the actuarial profession, and our recipients have captured the heart of the goal of our academic initiatives: encouraging actuaries who can balance research, education and service to the profession in an academic setting."

The Actuary contacted the award winners to find out more about these future academic leaders.

MACIEJ AUGUSTYNIAK will be entering a doctoral program at the University of Montreal this fall, studying mathematics (with a concentration in mathematical finance). Augustyniak has completed four actuarial exams, and has already earned a master's in statistics from the University of Montreal, where his thesis was judged in the top 5 percent and submitted for publication to Communications in Statistics: Simulation and Computation. He had two summer internships and worked for a year at Aon Consulting in Montreal, allowing him to touch on property & casualty insurance, pensions and asset management.

Q: Why did you decide to go to graduate school?

A: After my undergraduate degree in actuarial mathematics, I really wanted to see what it was to do research and that led me to do a master's degree. During that graduate degree, I also discovered that I really enjoyed teaching. That feeling was reinforced when I received strong feedback from my students. Attracted by the business world and the prospect of a career as an actuary, I decided to join the workforce. After all, the actuarial profession is rated amongst the best jobs in America. However, I gradually realized that an academic career is what I should pursue as it would permit me to develop new ideas and be continuously challenged while at the same time enable me to do something that I really enjoy: teaching.

Q: What do you think you can do as a member of the academic community to add value to the profession?

A: One of the other reasons I decided to go back to school is that it would not force me to be disengaged from practical actuarial work. As a member of the academic community, I intend to collaborate with business actuaries and I believe this type of cooperation is essential in this dynamic and rapidly changing world, so that actuarial knowledge can grow to help solve increasingly complex problems. I want to focus my research on practical areas so that my ideas and research will be used in the industry.

Moreover, I enjoy teaching and I am passionate about actuarial science. I believe I could be a great mentor to many students that want to join the profession.

Q: How will the SOA doctoral stipend help you to achieve your future career goals?

A: The obvious answer is that it eases my financial situation thus giving me the opportunity to fully concentrate on my studies. I will also have more flexibility to work for the university that I deem most appropriate after I receive my Ph.D.

However, more importantly, receiving the SOA doctoral stipend gives me the additional drive and motivation to pursue my studies. I find this to be a very prestigious award. Since I was chosen, I feel it is now a responsibility for me to advance actuarial education and research and I hope to be an active contributor to the mission and vision statement of the SOA. It is a sort of pressure, but one that can only help me progress in my career.

ROB ERHARDT will be starting his second year of a doctoral program in statistics at the University of North Carolina, Chapel Hill. He has completed six exams toward his CAS credential. After earning his master's in statistics from University of Wisconsin–Madison, he worked as a research actuary for American Family Insurance for three years.

Q: How do you see the profession changing over the next 10 years and what will you be able to do as an academic to help ensure actuarial science and risk management principles stay strong?

A: There are three trends that interest me, and I think they'll all develop over the next 10 years. The first is a greater explicit use of modern finance. The actuarial community is studying and using financial analysis more in their work, and I think that's going to continue. The second is the continued trend of actuaries in nontraditional job roles. I think we're seeing more actuaries in management, or other areas of insurance, or even other fields altogether. They're applying actuarial ideas in a nontraditional setting. The third trend that interests me is the rise of environmental risk analysis, and by that I mean studying things like pollution or extreme values in climate or environmental data. I wonder if actuaries will move into that field, because mathematically it's similar to traditional actuarial science. They're both about quantifying risks.

So, those are three trends, and if academic actuaries emphasize leadership and communication skills in the classroom, we'd better prepare students for all of those trends. Honestly, the hardest questions actuaries face usually aren't mathematical; they're questions about what we should do with the information. I'd like to see actuaries lead those discussions.

Q: You spent several years working before you decided to return to graduate school. What motivated you to leave business and return to graduate school?

A: My ultimate goal was to become a professor, and that requires a Ph.D., so it was always a question of when I should leave business to complete the Ph.D. Personally, I think an academic actuary should spend several years working in business. That's where the vast majority of our students will go, and that's where we gain an understanding of the most important problems facing the industry.

I would have loved more time in business, but life moves fast, and a Ph.D. takes a long time to finish. I ultimately decided that three years in business gave me enough of what I needed to work as an academic actuary, and I should start focusing on the Ph.D.

Q: How will the SOA doctoral stipend help you achieve your future career goals?

A: Well, the immediate benefit is that the stipend removes the financial barrier to completing a fellowship. That barrier is pretty big, and it gets even bigger when you're a graduate student without an employer to defray some of those costs. So, I'm deeply grateful for that reason alone. The second benefit is more time to focus on actuarial research as a graduate student. Any time you can link research goals with a source of funding, it's a win-win situation in graduate school. It means more time spent researching what you care about, and a more efficient use of research funding. The third benefit is the encouragement and support from the actuarial community. It's really been a big boost to my motivation to complete both a Ph.D. and my fellowship.

TAO GUO, ASA, will be starting his second year of the doctoral program in risk management and insurance at Georgia State University, with a research track in actuarial science and mathematics risk management. Guo already has one fellowship examination. He worked for three years at Tillinghast and Ernst & Young before returning to graduate school.

Q: What do you think you can do as a member of the academic community to add value to the profession?

A: There are two important roles members of the academic community have: educators and researchers. As an educator, not only will I teach the theory from textbooks, but I will also provide examples from practical applications that can be valuable for students. As a researcher, I will focus on continuously monitoring and addressing the dynamically changing risks. As we can see from the current financial crisis, there were many risky events that transpired that we hardly could have imagined, either because the assumption or methodology was incorrect. This crisis requires a new fundamental thinking and different approaches to risk management. The fact is most of the failed financial institutions did not lack risk management professionals, nor did they lack sophisticated risk management tools. By directing my research into the fundamental issues, I hope that it can bring some new perspectives to our profession to better understand and manage the risks.

Q: How do you see the profession changing over the next 10 years and what will you be able to do as an academic to help ensure that actuarial science and risk management principles stay strong?

A: The actuarial profession most definitely has changed in the past few years and will continue to evolve in the next 10 years. Though the majority of actuaries are still employed in the insurance industry with typical roles such as pricing and reserving, actuaries have become more versatile and are taking different responsibilities in the risk management field. For example, who would expect an actuary could be employed by an acrobat troupe? The fact is the group consistently travels to different countries where an actuarial expertise is required to understand the different laws and government programs to cover the difficult-to-insure group of acrobats. This is just one example, I believe that more opportunities will emerge for actuaries as the market evolves, the law changes, and new requirements are established.

In the midst of the continuous changes, I will use interdisciplinary approaches to help ensure actuarial science and risk management principles stay strong. I strongly believe actuarial science and risk management can and will benefit from research from other areas such as finance and economics. As an academic, I will have the opportunity to access resources from different academic departments and research institutions. Integrating resources to solve complex problems will enable me to address the problems from a more holistic view. As I mentioned earlier, the actuarial profession is becoming very versatile with actuaries taking jobs outside the traditional roles. This versatility will require actuaries to have knowledge across different disciplines. This interdisciplinary approach will equip actuaries with broader knowledge and the ability to take the lead on risk management issues.

Q: Is there anything else that you would like to add?

A: I want to thank the SOA for setting up this initiative to support the Ph.D. students in the area of actuarial science and risk management. It is very valuable and helpful to my studies and research.

JARED KLYMAN, FSA, has two years left at Princeton University studying operations research and financial engineering. He worked for four years, at Cigna Corporation and then Ernst & Young, before entering Princeton.

Q: How do you see the profession changing over the next 10 years and what will you be able to do as an academic to help ensure actuarial science and risk management principles stay strong?

A: One of the biggest challenges will be the evolution of risk management practices, specifically incorporation of new theories and ideas that have grown out of the recent financial crisis. The risk management literature is quite rich these days in academia and industry, and I believe it will continue to grow. Getting a truer handle on financial risk in an ever more complex economy is a problem that interests not only regulators and academics in financial mathematics, but also company acturies whose job it is to understand the risks of their company. Incorporating these new ideas from various papers into the principles of actuarial practice represents a considerable challenge. In particular, taking papers steeped in the language of formal mathematics and making it practical to regulators and company actuaries is the arena of research that excites me. Hopefully, it is equally exciting for practicing actuaries: a framework to more honestly and transparently reflect internal risks.

Q: How will the SOA doctoral stipend help you to achieve your future career goals?

A: First of all, I want to say that I am both honored and humbled by the opportunity from the SOA. Aside from the financial support, which allows me to attend conferences and interact with those at other universities, what I most hope is that the SOA doctoral stipend program will open up avenues of communication between academic actuaries and professional actuaries. For example, there are a few subjects in the literature with which I am familiar that I believe would be of considerable use in industry. I would very much be interested in seeing how such ideas would operate in practice. One such topic is capital allocation.

Q: You spent several years working before you decided to return to graduate school. What motivated you to leave business and return to graduate school?

A: My motivation to go to graduate school was borne of a desire to both develop new models/theories, and to see them put into practice. In order to effectively achieve this, I needed to build up my mathematical training, and to have the time to become deeply involved with some of the academic literature. This is precisely the opportunity that graduate school affords. So, my goal is twofold. The first part is to see the world from the perspective of the academic whose job it is to produce these papers, but not necessarily to worry about whether the ideas are practical. Then, the second part is to see through the eyes of industry actuaries, whose job is to keep their company solvent and profitable. I envision my role as a bridge between these two worlds: helping to clearly communicate risk management ideas and to describe plausible implementation schemes.

MIKE NIELSEN, FCAS, is entering his third year of the statistics and actuarial science program at University of Iowa. Nielsen has a master's in statistics from Brigham Young University and spent 12 years in the insurance industry before returning for his doctorate, most recently at Farmers Insurance Group.

Q: You spent 12 years working as a practicing actuary. What's it been like returning to graduate school and how did your time as a practicing actuary change our insights relative to your fellow graduate students?

A: In a lot of ways it's been great coming back to school. I always enjoyed school. I enjoy the atmosphere. It's been a challenge though, more than I thought. The relationship with professors has been challenging for me. I've become accustomed to more of a peer-to-peer type relationship. I have been working with people who are on the same level. A student-teacher relationship is something I've been away from for a while, and it's difficult to get used to that again. Also, I find myself working much, much harder than I ever worked when I was being paid for my work. The late nights, every Saturday I'm coming back up to my office and working long days, and I suppose I worked that way when I was studying for my exams, but it's a challenge to come back to that and work that way now. I didn't have children when I was studying for my exams and so that's a challenge too. The other things that I think are [different] between me and the other graduate students are [that] I'm certainly quite a bit older than the rest of the graduate students and I think the time I spent working gives me a different perspective than they have. When I work with the other students here who are studying to become actuaries, I find that I am a lot more prone to ask questions like: How would I use this, or would actuaries really understand that or would they even have time to think about it? A lot of times when you're in an academic setting it's easy to not think about the practical questions. Many times you may have a beautiful theory and it's a wonderful thing that you've spent a lot of time developing, but when you sit and look at it practically and think about it from the perspective of an actuary who's working and has a lot of other things on his plate and time is limited, he may never have the time to be able to dig into it and understand it, let alone be able to use it. [After] having worked for so long, [one] of the first questions I ask [is]: Who could use this and how could it be used? What could someone do with it? Is it practical to apply? And I think a lot of people who have never worked in the business world don't think about [that] as quickly as I do.

Q: How will the SOA doctoral stipend help you to achieve your future career goals?

A: It was great news when I found out that I was awarded the stipend. It's not such an easy thing to give up an actuarial profession to go back to the student life. Having the peace of mind that the extra cushion brings, it's a huge thing. We don't have to see our savings slowly being depleted. More directly connected to my career goals is, it's difficult to stay in touch with the actuarial community. You're so involved in your coursework, things are so busy being back in school. I knew it would be difficult and I'd be working hard, but I'm working a lot harder than I thought I would. The stipend gives me opportunities to do things like travel to a conference occasionally, meet with actuaries and maintain those ties a little bit better than I've been able to. Finding the time to go is still difficult, but at least financially it will be a little more feasible to do those things. The last, but not least important, part of my answer is, we're talking about reaching my future career goals. A part of this that's difficult for me is I'm not doing this alone. My wife agreed to this, so she's been very supportive. I have a daughter who is in kindergarten and for her, it's a little tougher. She doesn't realize what she's missing, but I see what she's missing.

Q: Is there anything that you would like to add?

A: It's a great honor to have received this stipend. I think it's going to be something that's going to be tremendously helpful. It's a challenge to make the change that I did. I think a lot of people who are working think, "oh, I'd love to do that." And I think I thought the same thing when I left and then when you find yourself in the middle of it, it's a lot tougher than you ever thought it would be. A little bit of encouragement like this goes a long way in helping you stay the course and finish it out.

AND FINALLY, on behalf of the SOA Board of Directors, we'd like to thank the Doctoral Stipend Awards Committee who carefully sifted through the applications, statements of interest, graduate transcripts and letters of recommendation to pick these five deserving awardees: Arnold Shapiro (chair), FSA, MAAA, EA; Claire Bilodeau, ASA; Andie Christopherson, FSA, MAAA; Stuart Klugman, FSA, CERA; and Warren Luckner, FSA, MAAA.

Emily Kessler, FSA, EA, MAAA, FCA, is senior fellow, Intellectual Capital, at the Society of Actuaries. For more information on the Doctoral Stipend Program, visit Soa.org/doctoral-stipend.