By The Independent Consultant
This edition’s interviewee is Jeffrey Zheng, an actuary-in-residence and assistant professor of practice at the University of Notre Dame in the Applied and Computational Mathematics and Statistics department.
- Please tell us what made you decide to become an actuary.
- Were there any subjects (as part of the exam system) that you found particularly useful or enjoyable?
- You are one of the relatively few actuaries that are involved in academia. What prompted you to follow this path?
- What are the entry barriers that actuaries who would like to become involved in academia face? What can they can do to overcome them?
- Is the actuarial profession gaining recognition among young people? What motivates students in your University to become actuaries?
- What are the areas of actuarial practice that are popular among students?
- What do students at your university think about the health care system in the U.S.? Is there much discussion and interest about topics on public policy?
- What do students at your university think about Social Security? Are they concerned that under the current pay-as-you go system they might end up contributing more (perhaps much more) than they will receive?
- Why do you think only a relatively small number of actuaries are active in public policy? It seems that our voice would be a valuable addition in important areas such as health care reform.
- It seems that a small but growing number of actuaries are supplementing their actuarial education with other credentials (e.g., CFA) or academic degrees (e.g., MBA). Do you think there is value in pursuing these credentials and degrees? If so, why? Are there certain credentials or degrees that you feel would be well suited for actuaries?
- Do you see actuaries expanding their professional roles in fields such as risk management or do you see other professions entering areas that have traditionally been the domain of actuaries?
- What are your views about the future of the profession? Job satisfaction, employment opportunities and monetary rewards, to mention a few, are surely important considerations for young candidates.
- Can you think of a non-actuarial discipline (literature, psychology, etc.) that would be useful in the career of young and not-so-young actuaries?
- Is there a non-actuarial book that you would recommend?
When I entered my undergraduate at Michigan, I did not even know what an actuary was. Fortunately my advisor in the Math dept. was the late Curtis Huntington, and he pitched actuarial as an excellent use of my strong quantitative background. I was interested in business as well as actuarial, but I found my actuarial internships (one at Trustmark, one at PwC) involved solving more interesting business problems than the one I had in a bank, which primarily centered around calculating statistics and creating reports, so I entered P&C insurance at CNA after graduation.
Exam P is probably the most useful exam, as not only do you need an understanding of probability in all actuarial fields, it’s a core skill that can help people make more informed decisions and take calculated risks in their own personal lives. I feel that the time value of money concepts in Exam FM have a similar practical use for all students, not just those that become actuaries. The higher level exams can be more niche depending on the career field chosen, and in those, I found the topics on catastrophe modeling and ERM most interesting and enjoyable to learn.
A career in education has always been of interest to me, especially as I studied through the exams as a student and thought of ways to make the learning process easier for myself and others. I particularly enjoyed tutoring as a college student and then being an exam mentor at CNA. I became, and still am, actively involved as a CAS university liaison, serve on the exam committee, and also case competition working group, so education has long been a passion of mine. After gaining several years of experience and working with many lines of business, I found myself at a point in my career where I would either specialize and stay in insurance for my career, or try to pursue actuarial from the academic side. I’ve never been someone to shy away from taking risks and treading a less-worn path, so I went back to Harvard Graduate School of Education to hone my teaching practice, and now am teaching and building the actuarial science program at the University of Notre Dame.
The primary barrier to entering academia is likely the time commitment in obtaining a Ph.D. I too, did not choose to obtain a doctorate, so I am in a professor of practice role, and that is an alternative path into higher education that most actuaries are not aware of. Another barrier is that the industry will in general compensate better than academia. Personally, I’ve found the rewards of working with the future generations of students, and the entrepreneurial opportunity to manage a budding program at Notre Dame, strengthen connections with industry partners, and create exciting new courses, are more satisfying and more than make up the financial differential. I find myself making a bigger impact in education than I did in insurance.
The actuarial profession is growing in recognition from when I was a student, but more can be done to increase its awareness, as I meet students on a weekly basis who do not hear about it until their Junior or Senior year. My students mention that actuarial is a great way to leverage their interest in math, and that actuaries solve complex and interesting challenges. They like the relative stability and low stress that are advertised by the industry, and are attracted by the high job placement rate and salary benefits.
Traditional insurance (including P&C) and consulting are the most popular.
Our students have an overall pessimistic view of our health care system. They find it broken and worse than other countries. They believe health insurance acts very differently from any other insurance products, which is why it’s so expensive. People expect insurance to cover their everyday high costs, whereas insurance is meant to cover severe and infrequent events.
Students do believe they will contribute far more than what they will get out of it, and they have concerns about its viability as it stands.
The actuarial profession overall is still a very small slice of the total population, and as such, we do not possess enough manpower or resources to lobby significantly. The insurance industry does try to exert its influence on public policy, though typically actuaries are not involved. We would be valuable as experts in the financial cost of risk, but we would need to be more proactive to be included on such teams, and it does not seem to be on the radar of most actuaries.
I believe that actuaries are supplementing with other credentials because the actuarial curriculum already covers many of those topics and after the actuarial exams, most other credentials are not difficult by comparison. For those who stay in the actuarial field, I don’t believe that these additional designations add much to their marketability, but they certainly can help those interested in expanding into other roles. I’ve always felt that the skillset one demonstrates at their job is far more valuable than any credentials they show on their resume.
Both will inevitably happen. Actuaries have the quantitative skills to be good risk managers, catastrophe modelers, data scientists, etc. and the societies are doing a good job in expanding the role of actuaries in firms. We’ve always been capable of roles outside traditional insurance, and it’s more growth of that awareness that is necessary. What actuaries can do to help themselves is continually improve their business and communication skills so they can take more leadership roles within organizations. On the flip side, those with a stellar statistical and coding background can do excellent actuarial work with some job-specific training, and teams of both actuaries and non can be helpful in providing diverse perspectives. One of my biggest initiatives is to form more classes that prepare students with practical coding skills as well as become comfortable working with large datasets and analytics.
I believe the future of the profession is bright. There is growing awareness of what actuaries can bring to the table, and the breadth of knowledge they possess. It will continue to be a faster than average growth industry with high job satisfaction and financial compensation. As globalization continues to ramp up, many developing countries will need the services of insurance and risk management, and actuaries will be at the forefront as experts. Actuaries excel at learning and can adapt to the needs of the world and new threats and risks (such as cyberterrorism, and robotics perhaps) that emerge in the future.
In terms of technical fields, I would recommend actuaries pick up some computer science, finance, and business management knowledge during their college education. Students would also benefit from marketing, communications, and education, to help them become more comfortable in presenting to large and diverse audiences, getting their point across to non-technical partners, and honing their persuasion capability.
One of my favorites is How Will You Measure Your Life by Clay Christensen and my students recommend Predictively Irrational and Rich Dad Poor Dad.
Bio
Jeffrey Zheng is an actuary-in-residence and assistant professor of Practice at the University of Notre Dame in the Applied and Computational Mathematics and Statistics department. Previously, he worked at CNA Insurance in a variety of roles from workers’ compensation and general liability reserving, directors and officers underwriting, to medical malpractice and commercial property ratemaking. He actively serves on education and university engagement committees for the Casualty Actuarial Society and is an FCAS, FSA, CPCU, and CPA. Since joining Notre Dame in 2015, he’s been responsible for expanding their actuarial program course offerings, overseeing the program’s growth, mentoring students interested in the profession, and maintaining contact with alumni and industry partners. Jeffrey holds a Bachelors in Actuarial Science and Economics from the University of Michigan and Masters in Accounting and Education from the University of Michigan and Harvard Graduate School of Education, respectively.
ND Actuarial Profile
The Actuarial Science Minor at Notre Dame is a program primarily meant to prepare students for careers as actuaries. Students take a mix of business, mathematics, statistics, and economics courses. The skills learned in preparing to be an actuary are the same ones being used in fields such as finance, statistical modeling, and consulting. So, the actuarial science minor provides students numerous career options in business and other quantitative fields.
The program offers courses covering all five preliminary SOA exams, plus exam preparation for the first two. The ACMS department offers exciting electives in computing, modeling, analytics, data mining, and more to help students be career-ready upon graduation. The Actuarial Club regularly hosts high-profile industry speakers to broaden students' perspectives on the variety of roles actuaries can take. Our Career Center has a 97 percent placement rate, and Notre Dame has a world-class alumni network with many in executive roles across the globe.