SOA Elections

Candidate Questionnaire

Carlos A. Sanchez-Fuentes, FSA 2006
President
Axiom Actuarial Consulting
Barrington, RI

Brief description of current work:

Health care, retirement, employee benefits and strategic consulting (e.g., mergers & acquisitions, due diligence)

Primary Area of Practice:

Health, Retirement

Other Areas of Practice

Macroeconomics, strategy, actuarial education, diversity & inclusion

Why do you want to be on the Board?

25 years of professional experience as an employee and entrepreneur in a profession where African Americans and Latinex are severely under-represented. An understanding of the contracting dynamics in the public sector as it refers to actuarial consulting work. A demonstrated interest in the future of the profession as attested by articles written on actuarial publications on topics that in my opinion are relevant to actuaries.

Professional Background

Provide a brief description of your professional background and the type of work you have performed and explain how these experiences have prepared you as an Elected Board Member and qualify you in carrying out the strategic direction of the SOA.

I have been an actuary for 25 years and an entrepreneur for 13. I worked two years in a Lloyd’s of London syndicate in the UK. Most of my work has been in health care, generally along traditional lines but I have been engaged in projects where standard actuarial techniques cannot be applied because data are not available or probabilities cannot be estimated (e.g., in competitive analyses), and in projects where other techniques are more appropriate (e.g., budgeting the expenses of a large, unstable population).

I have developed a small consulting practice in the public and private sectors, each of which has its own culture and require the ability to interact effectively with a wide variety of stakeholders including technical personnel and decision-makers. The latter group values competence in communication, a sense of shared responsibility, teamwork, and trust, all of which are abilities that can be developed with time and practice.

Soft skills such as the ability to develop relationships and negotiate improve the likelihood of success, more so when goals are aligned. These skills are transferrable and can be valuable in other contexts.

My interests include literature, history, politics, strategy, economics, mathematics, and physics. I have published on business writing, Machiavelli, military history and strategy, financial accounting, game theory with applications to insurance, system dynamics with applications to public policy, economics, and a white paper on diversity and inclusion whose findings are different and supplement those of the study commissioned by the Society of Actuaries.

Volunteer, Governance and Personal Experience

Describe how your volunteer, governance and personal experiences would strengthen your contributions to the SOA Board, the organization, and strategic plan execution. Please list your relevant volunteer experience. Please include the name of the organization, your role, and approximate dates.

Articles and presentations:

• Editor, “Innovators & Entrepreneurs,” 2012-present
• Council Member, Entrepreneurial & Innovation Section, 2012
• Friend, Smaller Insurance Company Section, 2019-present
• Friend, Social Insurance and Public Finance Section, 2019-present
• Member of the UCLA Actuarial Advisory Council (2017-2018)
• Member of the Sustinet’s (Connecticut’s state health care plan) benefits design task force, 2010
• At-Large-Delegate, Association of Yale Alumni (2011-2014)
• Presenter, International Actuarial Association, 2020 (Strategic Modelling and Scenario Planning)
• Presenter in meetings organized by the Society of Actuaries
• Presenter in webinars organized by the Entrepreneurial & Innovation Section
• Presenter, UConn, 2010 (Quality-Adjusted Life Years) , 2011 (Game Theory Applied to Actuarial Problems)
• Presenter, Hartford & Springfield Actuaries’ Club, 2009 (Quality-Adjusted Life Years)
• Presenter at the Instituto Tecnológico de Monterrey, Department of Languages, 2013 (Business Strategy)
• Presenter at the Mary Mount High School, Mexico, 2020 (The Actuarial Profession in the US)
• Presenter at the Actuarial Boot Camp of Hartford, 2011-2014
• Published several articles in “Innovators & Entrepreneurs”
• Published several articles in “Contingencies”

As an active volunteer and an observer of the evolution of the actuarial profession, I have proposed two initiatives to the SOA: a research study on diversity & inclusion, and the incorporation of strategic modeling material in the syllabus.

Agility/Change

What did you learn in the COVID19 pandemic that will help you, post-pandemic?

As a result of the pandemic, companies and government entities have become more comfortable with virtual interactions and the remote delivery of consulting services. This means that small consultancies can market their services without the need of constant traveling if they invest the time to prepare and communicate effectively.

State and federal agencies are likely to commission work related to the pandemic and seek the participation of small and mid-size firms. Agencies want to increase the participation of these firms for public policy reasons and because they see them as potential sources of innovation. Small and mid-size firms will be well positioned to win contracts if they form diverse teams, that is, teams with specialties in different areas that reflect the composition of the American society.

Finally, and more broadly, the pandemic crisis shows that it is impossible to foresee the timing, severity, and nature of game-changing events although their occurrence is certain. Adaptation to the new circumstances is the key to taking advantage of the opportunities these events create.

Motivating/Influencing

Describe a constructive conversation you had in a group setting or one-on-one during which opinions varied and you needed to get to a consensus.

One of my consulting assignments in a mid-size insurance company was to help identify the threats posed by the Health Care Reform Act and suggest measures to improve the insurer’s mid- and long-term viability. As part of the assignment I discussed the subject with employees from different functional areas and at different seniority levels. Some mid-level employees had a surprisingly solid understanding of the business and a strong commitment to their company’s success. However, the employees had different—in some cases conflicting—views about what strategies should be followed. To structure our analysis, I described my understanding of the situation and identified the most likely external forces (e.g., subsidized products, regulation, competition, mergers, economic environment) that would influence the firm’s future. As we discussed external forces, it became apparent that the company’s ability to implement any plan of action depended on internal aspects too, which were unknown to many of us. Those with that knowledge shared it openly with the rest of the group. Next, the employees were divided in four sub-groups, each of which described a plausible scenario and its consequences to the company. We then engaged in a dialogue in which the employees expressed their opinions and suggested plans to strengthen the position of the company in its market. Although there was no consensus on a single initiative—which was impossible, given the fact that the external environment could not be predicted—the opinions were thoughtful and more unified than at the beginning, so much so that the report I created for the management team relied heavily on the suggestions made by the employees.

This example illustrates two points: first, the value of diversity of opinions and knowledge; second, that people give their best effort when they feel that their contributions matter.

Diversity

Describe how your awareness of diversity, equity and inclusion has evolved throughout your life.

I was born in Mexico, moved to the US as a student, lived most of my life in the US and spent two years working in the UK. My relatives live in Mexico. I have been an employee and an entrepreneur. My interests range from actuarial science to strategy to history.

These experiences and interests have influenced my thinking about diversity, equity, and inclusion, which I summarize as follows: to maximize individual and group potential, each member must have the opportunity to succeed through hard work and discipline. Having the opportunity does not mean that everybody will want to take it or can succeed. It is important to recognize that members of minority groups face many barriers, some of them apparent, others subtle and typically camouflaged with displays of good intentions or a veneer of fairness. They must be identified and eliminated, and outright prejudice must not be tolerated. Inclusion can only work if the stakeholders truly believe in its value and are willing to see reality for what it is.

There are examples that show how treating individuals based on their abilities is the most credible and safest way to foster diversity and fairness, which improves the chances of success. Two of them come to mind: the policy of the Roman Empire to grant citizenship and bestow high offices to those who distinguished themselves in the service of Rome, and the exodus of Jewish people to the US during World War II. The former was, according to many historians, one of the reasons that explains the vitality of the Roman Empire. The latter was an important contributing factor to the development scientific advances and the eventual victory of the allies.

The actuarial profession must encourage diversity and inclusion without devaluing the credentials.

International

How would your experiences strengthen your understanding of international issues?

I spent the first 22 years of my life in Mexico. I lived and worked two years in the UK and the rest in the US. At some point in my career my job required constant traveling to visit clients in Germany, Mexico, and South America. Axiom—my company—has always had international clients; as a matter of fact, I have served one continuously since 2009.

I understand how ASAs and FSAs are perceived in other countries; I am aware of the advantages and disadvantages of holding American credentials overseas. I know professors of actuarial science in foreign universities and members of actuarial bodies including a past-president, also outside the US. Over the years we have exchanged ideas about the actuarial profession in an international context. I have given presentations about the American credentialing system. I have developed relationships with professionals from other countries living in the US or overseas, some of whom obtained their actuarial credentials outside the American system.

Living overseas helps understand the ideology of other people and our own because ideas, perceptions, and sentiments permeate our conception of the world, including our believes about the actuarial profession. Knowing the environments of different countries gives a sense of what is possible and of what is desirable but not possible. The latter is particularly relevant to potential expansion plans of the SOA.

Emerging

How does the SOA need to change to meet emerging challenges and opportunities?

The answer to this question is complicated. The following considerations reflect my views on the matter:

• The profession generally is seen as technical but devoid of managerial and strategic vision. The latter aspect can be addressed with the inclusion of exam material (perhaps as an option) that covers some strategic tools. The actuarial background is well suited for this extension. Strategic tools could expand the labor market of actuaries in areas such as policy modeling and competitive analysis. The initiative should be accompanied by efforts from the SOA to create awareness of how strategic tools can benefit employers and government entities, including sponsoring studies (to be carried out by actuaries). The most important entry barrier would be to change the perceptions of employers.
• It is more difficult to signal to employers and decision-makers that actuaries possess managerial skills. Maybe the SOA should consider a partnership with a top business school. This is how the International Foundation of Employee Benefit Plans and the Wharton School of the University of Pennsylvania have operated for a long time. The Certified Employee Benefits Specialist (CEBS) designation, sponsored by both bodies, is highly regarded by professionals in the employee benefits sector and many executives in the field pursue it. Furthermore, the association with Wharton brings to the table the resources of a premier institution that can be accessed as circumstances demand.
• If the SOA is not doing it, it should engage in annual scenario planning to identify threats and opportunities in the mid- and long-terms. For example, if the US adopts a single-payer system in healthcare many actuaries would lose their jobs.
• If the SOA is not doing it, it should try to understand the dynamics of supply and demand, and its consequences on salaries, employment prospects, and the perceptions about the profession.