by Nick Ortner
and Carlos Sanchez-Fuentes
As part of the Entrepreneurial Actuaries Section’s (EAS’s) ongoing aim to assist actuaries with starting a business, we sought input from business creators via a summer 2012 survey of the EAS to help guide fellow entrepreneurs. Following up here on our August 2012 article that probed into business development and entry into the world of entrepreneurship, this article synthesizes and summarizes the responses and feedback provided to the survey questions that asked respondents to articulate their perceptions of the education system and the role that system does, could, and/or should play in the world of entrepreneurship.
13. Regarding the actuarial education system and its link to entrepreneurship: What are the advantages and disadvantages of an actuarial education to entrepreneurs?
The advantages of an actuarial education encompassed the following:
- The education system provides a broad base of financial knowledge that can be applied to many situations, and offers more of a forward-looking financial education baseline than other career paths. The system’s analytical nature and process orientation are also very helpful for many businesses.
- More specifically, it's an advantage to have a rare and difficult-to-obtain skill set. The barriers to entry in the field are high, so we are less likely to be commoditized in the marketplace while possessing credentials that can be leveraged.
- Actuaries as clients also afford us a psychological advantage—cold-called actuaries may at least take the time to talk because there's an assumption that we possess a certain baseline of knowledge and common mindset that can jump-start a relationship.
In many ways, the disadvantages of an actuarial education were expressed in a vein similar to the aforementioned advantages:
- Actuaries may be too analytical, and the system may help breed that analytical depth, for some aspects of starting a business—“at some point, you just have to trust your instincts and get going.”
- On the other hand, with non-actuaries the education can be perceived as a negative—expectations may exist that actuaries are smart but not good business people, requiring a demonstration of skills beyond the technical.
14. What are your thoughts about the actuarial education system as it relates to entrepreneurs?
15. How could the system be refined to better prepare actuaries for the worlds of entrepreneurship and business creation?
Feedback on how an educational system might be refreshed to better align with the entrepreneurial world was primarily along the following lines:
- A heavier focus on professional development opportunities—perhaps with an entrepreneurial track—was suggested and repeated several times, as opposed to formalizing entrepreneurship within the actuarial education system:
- One area of focus could be basic business tenets—leadership, strategic thinking and business plan development, marketing and sales, management of people and/or financial information—and how to improve and succeed on those fronts.
- Recognizing that the SOA has already undertaken at least some of the following, additional areas of focus within professional development could include:
- More specific and comprehensive technical seminars on such concepts as corporate structure, accounting and taxation;
- Communication skills, with a particular focus on understanding your audience and presenting information effectively to diverse groups of professionals would go a long way toward changing outsiders' perception of our field and improving entrepreneurs’ success rates.
- Multiple responses also acknowledged that the current system, in weeding out those who are not as strong technically as is needed to become a credentialed actuary, also likely loses some/many good business minds along the way.
The optimal recipe for successful business development may combine maximizing the advantages of the actuarial education system with recognition of the gaps in entrepreneurial education that currently exist in the system. Such a recipe may not be complete until you add a sound business plan and commitment to the sales and relationship-building process in your potential market(s). An actuarial education is one important aspect, but such an education must be complemented with a strong professional network and development outside of the formal education structure.
Nick Ortner, FSA, MAAA, is product development manager—Group Markets for National Guardian Life Insurance Company in Madison, Wis. He may be reached at njortner@nglic.com or 608.443.5280.
Carlos Sanchez-Fuentes, FSA, MBA, M.S., is vice president and chief actuary at Delta Dental of Rhode Island. He may be reached at carlos_fuentes@aya.yale.edu.