April 2013

Niagra Falls

By Michael Braunstein

I don’t know about you, but if you were anything like me in your college days, you wanted nothing to do with writing a 15-20 page term paper. Math was my thing, and tightrope walking over Niagara Falls would have been my preferred alternative to such a lengthy pencil-to-paper, word-based exercise. But when I found myself newly working as an actuarial student and reaching mathematically-based conclusions on data that I’d analyzed, I also found that the assignment didn’t end there. Invariably, I would be asked to explain my result—either in a written report or, heaven forbid, in an oral presentation. Eventually, I learned to do both.

Today’s entry-level actuarial students, especially those who graduate from a university that appreciates the need for the technical /business skill balance, have a big advantage. While in school, they are required to learn what I had to learn on the job. For example, here at the University of Connecticut—an SOA Center of Actuarial Excellence—every actuarial science major is required to take two writing courses. One of those two writing courses can be in any subject at all, while the other must be in the major. My tightrope walking days are long behind me and to my own surprise, I now teach that writing course—Technical Writing for Actuaries.

During the early part of the semester, students write about the importance of the actuarial profession; they prepare vision statements; and they analyze their own strengths and weaknesses—all topics that are relevant to their job search. They prepare resumes, cover letters, and thank you notes (both good ones and problematic ones to make sure they appreciate the difference).

Soon, they have “secured” a job and with much success, are the Chief Actuaries of their respective firms. The writing assignments now involve more technical topics such as the analysis of a change in reserves or an explanation of medical cost ratios. One explanation is written to a group of actuaries while another is geared to a more general population. They draft an email to a new sales staff person on life insurance pricing assumptions and their impact on the price of a policy.

They write about the health care debate in the United States and using knowledge gained from the lecture of the week before, propose company reorganizations—perhaps based on line of business, function or distribution system. Other topics include leadership keys that they, as Chief Actuaries, seek when they are hiring new students, ethics, the Code of Conduct, negotiation techniques and, these days, enterprise risk management.

Essentially, the course teaches effective communication, so the students also get the opportunity to present to their colleagues. Early on, they prepare an “elevator speech” to promote themselves during that chance meeting with the CEO. Later on, they have to make a case for hiring some additional staff, and their request must be supported with data and readable charts.

Because teamwork will be so important when they find themselves truly working within industry, they work in classroom teams to create a 10-year staffing model and cost projection. For the final exam, they individually explain the model in the form of that lengthy and dreaded 15-20 page report. That paper should and, often does, incorporate modified versions of earlier papers—consistent with instructor feedback.

In the end, students and industry both seem to appreciate what this course offers. And so they should. Students—with an improved blend of technical and business skills at their disposal—find themselves better prepared to enter the financial services industry. The industry, which has forever sought that actuary who can communicate, finds itself with a more qualified and well balanced actuarial student. It’s a win-win.

Michael Braunstein, ASA, MAAA is assistant director of the actuarial science program at the University of Connecticut. He teaches Financial Mathematics and Technical Writing for Actuaries.