The Actuary - President-Elect Candidates Share Their Views
President-Elect Candidates Share Their Views
The SOA Committee on Elections and the June 1999 issue’s editor, Robert D.Shapiro, invited candidates for the office of president-elect of the Society of Actuariesto be interviewed by The Actuary. This annual service of The Actuary is intended to helpFellows make more informed choices in voting for a future SOA president.
The interviews in these pages offer insights that supplement the candidates’formal position statements, which will be published in election materials. The editorselected 13 questions after considering many. Soon after being notified that they were onthe second ballot, the candidates individually arranged telephone interviews with the SOAcommunications staff. Each interview was tape recorded. The same 13 questions were askedof each candidate in the same order. Candidates did not receive the questions ahead oftime. The interviewer was allowed only to repeat the questions, not to expand on ordiscuss them. Of course, candidates could decline to comment.
Each transcript, minus the candidate’s name, was sent to Shapiro, who reviewed theresponses for repetition. The Actuary staff was allowed to edit only for grammar andconciseness. Each candidate received a copy of his or her transcript before publication,but candidates were not allowed to change their answers unless they believed they had beenmisquoted. No such request for a change was made. Their answers are published in theirentirety.
The Actuary thanks all the candidates — Robert L. Brown, Linda B. Emory, andBurton D. Jay — for their cooperation. They are featured here in the order used inthe second ballot, which was randomly drawn and, coincidentally, resulted in a straightalphabetical order.
Question 1: Why did you become an actuary?
Rob Brown: I had a love of mathematics and a desire tobe a business person. I was fortunate to learn of the existence of the actuarialprofession while I was still in high school. I was also fortunate in being able to attenda strong actuarial science program at university. It was a natural for me to blend thelove of math and a desire for business context in an actuarial career.
Linda Emory: The basic foundation of applied business mathematics is agood match for my personal skills. The actuarial profession has given me a wonderfulopportunity to learn and broaden my knowledge-based skills while offering goodopportunities for advancement and financial reward.
Burt Jay: I was a math major heading toward being an engineer andfound that I had some difficulty with a physics course when I was a sophomore. Lookingback, I think it may have been the teacher. In any event, I started looking out for otherthings. My father worked in an insurance company in marketing, and he suggested using mymath as an actuary. I had never heard of it before. He arranged for me to meet with thechief actuary of the company; I got summer work, and that was the direction I decided togo. It’s been a wonderful decision.
Question 2: Why do you want to be president of the SOA?
Rob Brown: While it would be a huge honor to lead the Society of Actuaries, it is notthe honorific aspects of the presidency that caused me to choose to run for office. I haveworked closely with the past seven presidents and have seen the SOA agenda evolve. We areat an extremely exciting and demanding point in that evolution. Howard Bolnick has createdhuge expectations around the concept of the Big Tent that will require the focused energyof more than one president.
I have worked closely with Howard and Norm Crowder and have a level of comfort with theagenda they have created. I would very much enjoy being a part of their team and servingthe Society members to see their philosophy through to implementation.
Linda Emory: I want to contribute further to the profession that has been so rewardingto me for the last 35 years. I believe my experience as a chief actuary in theinternational financial services business can add some practical value as the SOA tries toclarify the actuary’s role in today’s rapidly changing environment.
Burt Jay: It’s an interest and a goal that I’ve thought about for many years.I remember receiving my FSA diploma from Gil Fitzhugh, president of Metropolitan Life andalso the president of the SOA, a number of years ago. He was such a role model, and overthe years I’ve known other presidents well. They became inspirations to me. Before mycareer ends, I’d like to give something back in the most influential way possible tothe profession that’s been so good to me.
Question 3: Why are you qualified to be president-elect of theSOA?
Rob Brown: We are in the middle of a large number of North Americanand international challenges, none of which can be met within one presidency. Whoevertakes on the role of president-elect, I believe, must hit the ground running. In the lastseven years, I have been on the Board of Governors for six years and on the executivecommittee of the Society for four years, and I have had positions in the InternationalActuarial Association. I think that qualifies me to start my mandate at a high level ofactivity. I believe that would be advantageous to the members.
Linda Emory: Over the years, I’ve served the SOA in a variety ofleadership roles. This allowed me to under- stand the organization and how to workeffectively within it. I’ve also served in the leadership of a company that assessesand manages insurance, banking, and asset management risk. This gives me insight into howthe role of the actuary will change over the next decade. This insight is essential forleaders of the SOA. Because I’ve decided to take early retirement, I can concentrateon president-elect duties.
Burt Jay: I’ve spent a lot of years, really most of my career,being extremely active in both the American Academy of Actuaries and the SOA. I’veserved both organizations on many committees. In fact, I was vice president of both theSOA and the Academy at the same time. My background has been built by being in touch withmany issues over many years, and some things that started many years ago are still goingon. I have good contact with all these issues, and some of them have evolved very slowly;there isn’t very much that’s really new. I can reach back and bring a lot ofbackground in dealing with these issues, and hopefully I would be in a position tocontinue the improvement of some things that would make a difference.
Question 4: What, to this point, has been your most importantcontribution to the profession?
Rob Brown: During my presidency of the Canadian Institute ofActuaries, I influenced the legislation that created appointed actuaries for both life andP&C companies in Canada. That also brought dynamic solvency testing and moreresponsibility for the appointed actuaries in their new role. Within the Society ofActuaries, my most important contribution has been the development of the year 2000syllabus as a charter member of the SOA Board Task Force on Education. We need to see thatthrough to implementation in the next two years, and I sincerely hope to be able to play arole in that implementation.
Linda Emory: While serving in top positions in various actuarialorganizations, I’ve always wanted to be sure the profession is focused on practicalvalue to the industry we serve. As an example, when I revamped The Actuary back in themid-1980s, we went after associate editors actively involved in different practice areasso we could inform the membership on a broad range of issues that affect them.
Burt Jay: I was involved on the regulatory front, representing mostlythe Academy, but the SOA, too, in things involving research and education. I have workedwith regulatory actuaries and with the NAIC, influencing some of the regulation in waysthat are good for the profession and the public. Also, I was chair of a task force thatdesigned the first valuation actuary opinion and recommendation requirements. We advancedthe concept of valuation actuaries providing an actuarial opinion after performing cashflow testing. Some of the early work I did on that was published, but being chair of thattask force for a couple of years was an important contribution. The results stillinfluence actuarial practice and will for a long time.
Question 5: In your interaction with SOA members, what issues domembers say are most important to them?
Rob Brown: I think their number-one issue is the continued value ofthe actuarial designation. They are concerned about any possibility of depreciation of thevalue of their Fellowship. This could happen because of outside forces that compete withthe Society, but it could also happen internally if we were to take actions that erode thevalue of the Fellowship. I am acutely aware of these concerns, and I share them with themembership.
Linda Emory: The greatest concern is the potential narrowing of therole of the actuary, combined with breakdown of walls between the different financialservices sectors and competition from other professions. I think actuaries want to stayrelevant in the workplace.
Burt Jay: Many of my actuarial contacts are students or have beenstudents recently. Their interests are often in the education and examination structure.The changes in process now are very positive ones. Coming from a system that didn’tseem to work out nearly as well, many students I know of were leaving as a result of thetravel time through the exams. The changes that we’ve made will be viewed as verypositive.
I haven’t heard as much yet as I think I will, but I’ve heard some commentsabout actuaries becoming more active in other financial services areas, not traditionalinsurance or pensions. Things are happening in other areas, and actuaries are gettinginvolved more frequently. A lot of actuaries are interested in practicing in these newareas.
Question 6: If you are elected, what one issue or task wouldreceive your greatest attention?
Rob Brown: If elected, I want to try to complete many of the nowopen-ended agenda items. Howard Bolnick has raised a large number of important issues thatneed to be addressed. And, we still have not put in place completely the year 2000syllabus and qualifying process. I promise not to take the Society in any new or radicaldirections. Rather, I want to continue the agenda that is in front of us today, started byHoward and continued by Norm Crowder, which is clearly more than a two-year process. Iwould like to see as much of it completed as possible in the third year of a consistentphilosophy.
Linda Emory: Assuring that the role of the actuary remains relevant asindustry expands. This means that you have to emphasize continuing education to giveactuaries the same financial tools as economists and other financial competitors.
Burt Jay: The issue that’s most important to me is expanding ourscope of practice into other financial services. We need to learn more, become theexperts, and be the key people in developing technology from research that we do in areassuch as fair value concepts and option pricing. These are areas that we need to move into.Per-haps we should consider bringing in those who are now experts in those fields.Ultimately, we could become the primary experts in all the financial services areas.
Question 7: In a corporate structure, strategies that arenecessary for change can be identified and implemented in one or two years. In a volunteerstructure, this is more difficult. How can the SOA implement changes in strategicdirection in a more timely fashion to remain competitive?
Rob Brown: This is an issue that has been partially addressed by theboard. Over the last three years, we have changed our management structure to more clearlydelineate that the board is meant to handle strategic planning and not management andoperations. We also intend to change our planning committee whence many ideas come so thatthe president-elect is not the chair of that committee. The problem with president-electchairs of the planning committee is that they change every year, and so we do not have acontinuum of energy and focus. I support these initiatives. I believe these will take us along way in shortening our timeline, even within the volunteer structure, and allow us tomake changes at the rate that is clearly necessary.
Linda Emory: It’s difficult, with a president elected for oneyear. But he or she not only serves one year as president but the year before and twoyears afterward and serves on the executive committee. The only solution is to workeffectively through the executive committee on the strategic plan and be sure there is astrong commitment to continuity.
Burt Jay: Implementing strategies in a corporate environment is alwaysgoing to be easier and faster than doing similar things in a volunteer organization.I’ve led a lot of volunteer task forces and committees over the years. You govern bypersuasion more than by giving direct instructions in a boss/ employee kind ofrelationship. Even in the corporate structure, though, it is important to have theemployee committed to the importance of the work. But the fact that you give the employeea paycheck assures that company work receives a higher priority than the volunteer work.Volunteer work generally has to take second place, even if an employee has a strong beliefin it. I don’t know that we’ll ever overcome that. The only thing I know to doabout it is through the exercise of leadership; try to develop an interest and passions incompleting volunteer work. It’s a matter of getting more concentrated time frompeople who work on a volunteer basis.
Question 8: The SOA adopted a new vision statement two years agothat calls for "actuaries to be recognized as the leading professionals in themodeling and management of financial risk and contingent events." What would you doas president to help fulfill this vision?
Rob Brown: I believe the most important word in the vision statementis "the." We must be perceived uniquely as the profession that is called upon toevaluate risk through modeling. This is consistent with President Bolnick’s Big Tentvision. There is competition now for actuarial services on many fronts — fromepidemiologists, health care economists, demographers, and financial engineers. We need tobe able to show we are value-added, and we need to educate the next generation ofactuaries to be the best of the competing business people to fulfill the role that we holdto be ours. This requires implementation of the year 2000 syllabus, which I believe headsus in the correct direction, but it also requires working on many of the initiativeslabeled Big Tent initiatives launched by Howard Bolnick. Change is painful, and many ofHoward’s proposals are radical. They can only be attained with the support of themembership. This will be a huge challenge, but one that I feel I’m qualified to face.
Linda Emory: I very much agree with the statement. This is the role ofthe actuary in the broadening financial services industry. I would focus on providingcontinuing education that equips the actuary against their chief competition, MBAs andeconomists. I would also assure that actuaries understand financial services industriesand their approaches to modeling and management of financial risk. That’s somethingextra we’re going to need to compete.
Burt Jay: As I said earlier, it would be my primary area of focus. Ofall the things we are doing, this is most important. I’ve thought a lot about it, andI think we have to look ahead and project what’s happening in the financial servicesarea. There appears to be a movement of consolidation, and we’re becoming employeesof huge financial services organizations instead of insurance companies, banks, andinvestment houses. But there are companies going the other way, too. I’ve seencompanies getting out of their casualty business and retaining their individual lifebusiness and buying other life business. They are concentrating on what they feel they dobest and actually deconsolidating, specializing. It’s kind of a counter-trend. Ithink we have to learn what we can and do as good a job as possible in projecting wherethis is going. It’s like shooting clay pigeons with a shotgun. You have to pointwhere the clay pigeon is going to be, not where it is now. The effort takes a long time— developing new technologies, maybe attracting people with similar but differenttalents to the actuarial field and training members to practice in new fields. All theresearch that will be required, and the education and training, will take a long time. Sowe have to get moving in the direction we think we have to move in so that we can be wherewe need to be five or ten years from now.
Question 9: The profession is facing increasing competition fromother disciplines and professions. Where do you think the biggest threat is coming from?How would you strategically address it?
Rob Brown: As a university professor, I do see more competition forgood math/business students. Financial engineering is clearly one of the most importantnew sources of competition, but we also have competition from jobs like Web site creatorsand managers. I believe I have a unique answer to this question, because I see with mystudents that it is not just within the Society of Actuaries’ control to create anenvironment where we attract the best and brightest. Certainly, we cannot continue to havean examination process that takes an average person until age 30 to complete. But beyondthat, we must forge a new partnership with people who employ our candidates. Many studentsmove to competing careers not because of the challenge of the exams but because of theattractiveness of the entry-level employment that they experience. If we are to attractbright and creative students, then we must treat them as bright and creative individualsat the earliest possible moment in their job experience. I do not believe that ishappening today, and I think it is a matter worthy of attention and energy.
Linda Emory: I think the biggest threat is from MBAs and economistswho are better known and recognized in banks, investment firms, and the general businesscommunity. We have to strategically address it through continuing education that givesactuaries the tools of these professionals.
Burt Jay: I am now on the Academy’s Valuation Task Force, andwe’re working on an entirely new concept, at least compared to the current method ofvaluing insurance. It’s a technology based on statistics that’s been around along time, but because of faster computers, we think we are close to being able to do itnow even though more research and, especially, more education is needed. Another areawhere actuaries are behind other professions is in using market value or fair valuetechniques. The fair value basis for determining earnings seems to be the direction worldaccounting is going. Other people can do these things better than actuaries becausethey’ve been studying them for a longer period of time. Our greatest challenge is tocatch up with all the technology, incorporate it, and be-come the leaders — maybe byattracting the people who do these things better than we do now. The old adage, "Ifyou can’t beat them join them," might apply here.
Question 10: What do you think is the biggest undevelopedopportunity for the Society, and how would you address it strategically?
Rob Brown: I think we have a huge opportunity in continuingprofessional education, not only for our own membership but also for individuals who wesee as competing for our students. It is my hope that the SOA can provide meetings andseminars both in a traditional mode but also in new electronic opportunities. These willattract not only actuaries but our colleagues in other careers (financial engineers). Wecan become the leading provider of continuing professional education for anyone doingactuarial work.
Linda Emory: The biggest under-developed opportunity for actuaries isin the financial risk assessment and management area outside insurance and across thebroader financial services industry. To accomplish this, I would emphasize continuingeducation and a strategic focus.
Burt Jay: I think the opportunity is to embrace these non-insuranceand non-pension technologies. We need to get in on at least as much of the ground floor asis still left, do our own research, and be the ones in the future who develop newtechnology. It’s fertile for future growth.
Question 11: What would you do to strengthen or otherwise changethe Society's working relationship with other important actuarial bodies, such as theAmerican Academy of Actuaries, the Casualty Actuarial Society, and The ActuarialFoundation?
Rob Brown: This is one area where we must not move too quickly. Manypast presidents have struggled with this important agenda item. I don’t believe thisis a one-year matter. Unfortunately, we start from a position where, by being the biggestof the actuarial organizations, any attempt to assimilate the work of the various bodiesis seen as an attempt to conquer. There’s an old saying that you can either hangtogether or hang separately. Certainly it is against our common interest to have as manyofficial voices for the actuarial profession as we have today. But any move in this regardmust be done with a high level of sensitivity. I say that particularly because I do have abackground and an affiliation that I cherish with all of the Canadian Institute ofActuaries, the Casualty Actuarial Society, and the Society of Actuaries.
Linda Emory: I believe that it’s a desirable objective to workvery closely with these other organizations and continue to coordinate our activities aseffectively as possible. I don’t think we should spend as much energy on trying tocombine these bodies into one group. I would spend more major attention on external issuesand trying to align the groups to coordinate on these external issues.
Burt Jay: I think that we all have to embrace the same goal. I thinkwe’re moving in that direction now. I’ve been involved heavily in both SOA andAcademy activities. We share some of the same goals, and we’re the same people (inboth organizations). It’s hard to understand why we haven’t been more successfulin the past in getting people together. Maybe working together on common goals would makeit more obvious to the leadership of all the organizations that we can accomplish morethan we have in the past. We might consider combining the organizations in some fashion inthe future if that’s appropriate. It has seemed appropriate to me and the leadershipof the organization in the past. We need to do a better job of getting out into theactuarial clubs and talking to the members — describing the situation as we see it,getting a dialogue going among actuaries all over the country, and trying to develop grassroots support for some of the things we believe. Certainly, in most other countriesthere’s only one actuarial organization.
Question 12: In your opinion, is Society research meeting theneeds of practicing actuaries? If not, what should be changed to meet those needs?
Rob Brown: I would differentiate between research and experiencestudies. I believe the experience studies, once done, are done well and seen asvalue-added; however, they are not done on a timely basis. We have had a long-standingarrangement with MIB, Inc. (a company that does data processing) for many of ourexperience studies that might have to be reevaluated.
I’d like to do more to support primary research. Unfortunately, primary researchoften does not have immediate dollar-valued business applications. However, that is oftenthe case only because by its very nature, it is ahead of its time. I can show researchdone in the 1940s that philosophically outlined in great detail a universal life productthat could not be implemented until the late 1960s and early 1970s because we didn’thave computers. I can outline research from the 1950s that outlined in detail immunizationand cash flow testing, which is only now being implemented. So while it is difficult toappreciate primary research on the day of its creation, I think we need to continue tosupport it, and if anything, support it more broadly than we do today.
Linda Emory: No, I don’t think the Society has done a good jobyet to meet the needs of practicing actuaries. There are at least two problems. One is thetimeliness of the information being produced, and the other is the practical relevance ofthe subject matter. This has been a problem for a long time. All we can do is continue toput emphasis on recognizing these two problems and focusing on doing a much better job.
Burt Jay: In general, it’s done a good job up to now. There aresome movements to develop stronger actuarial programs in universities where maybe a higherpercentage of actuarial training can take place as it does in other professions. When wedo that, it may be that we have a greater opportunity with academic people for morere-search. I have talked about moving into new fields; the best way to do that is throughresearch. We need more resources to conduct the research. We need to become the leaders inthe financial services industries.
Question 13: Is there anything else you would like to add?
Rob Brown: I would like to high-light to the voters that the Societyof Actuaries is an international education and research body. With respect, I would liketo ask them to remember that as they cast their ballots.
Linda Emory: I would again say that I believe my professional industryleadership and experience qualifies me. I would welcome the opportunity to serve in thiscapacity.
Burt Jay: I believe I have covered my most important opinions andthoughts in the previous answers.