President Roy Goldman on University-Earned Credit
Thank you for sharing your views. Allow me to give you more detail regarding the need to make changes in the SOA’s education and credentialing of actuaries.
You can be sure that the last thing that the Board or I want to do is diminish the value of the ASA and FSA credentials.
The value of our credentials, though, is measured by the marketplace: how much in demand are actuaries; what do employers, regulators, and the public expect from us; and what are employers or the public willing to pay for our services? Employers have been telling us for many years that while they value our intelligence, knowledge of the business, and technical skills, they want actuaries who are also strategic thinkers, good decision makers, great communicators, and business leaders.
The Case for Change
If not today, then in 5-10 years, our existing technical expertise will be challenged and probably surpassed by artificial intelligence, which includes the disciplines of data science, machine learning, and deep learning. Therefore, to maintain our value, the market will demand actuaries who not only possess the technical skills for which we have always been known, but also understand the techniques of artificial intelligence and how to use data analytics to formulate strategy and make and communicate sound and ethical business decisions.
In recent years, careers in data science, math, and statistics have surpassed actuarial science in popularity and career ratings. The number of first-time exam takers entering our pathway has dropped each year for the last seven years. In 2020 the number of first-time exam takers was nearly 50% fewer than in 2013.
Given this trend, the market is telling us something. We can continue what we’ve been doing for decades, but if we don’t change quickly, we will become a smaller profession relegated to signing statements required by regulators. To remain the risk professionals of choice, we must embark on a new long-term growth strategy in the areas of pre-qualification education, professional development, research, member engagement, international growth, and DE&I. Your SOA Board of Directors is initiating action in each of these areas.
The SOA is foremost an educational organization. Our main responsibility is to train both current and future generations of actuaries to be technically competent professionals who are known to be strategic thinkers, good decision makers, great communicators, and future business leaders. We refer to these as adaptability and emotional intelligence skills or AQ/EQ for short.
Your Board has identified five steps to improve the way we educate actuaries:
- Review the current ASA and FSA syllabi to make sure they cover the basic techniques of artificial intelligence as well as all the knowledge and skills we expect new ASA's and FSA's will need in the next five to ten years.
- Develop better methods of educating and testing AQ and EQ skills.
- Make the pathway to ASA and FSA more attractive than alternative pathways such as a career in data science. It currently takes an average of eight years to reach Fellowship, and only about 10% of those who start the pathway make it FSA.
- Use and/or develop the talent and resources of colleges and universities to help accomplish steps 2 and 3.
- Create professional development that promotes life-long learning in the skills that employers, regulators, and the public value.
While our exams are not going away for the vast majority of candidates, the Board and I believe that the University-Earned Credit program (UEC) we announced is essential in helping us train the next generation of actuaries whom employers will value above other competing disciplines. UEC is the first of several changes we will be announcing this year as we modernize the curriculum and introduce credentials along the pathway and certificates to supplement the pathway.
The SOA’s pathways to ASA and FSA have changed multiple times since our founding in 1949; indeed, they have changed multiple times since I became a Fellow in 1980. Every time it changes, some of our current credentialed actuaries think the new entrants are getting a break!
As we announced, under UEC the SOA will be approving in advance the syllabus, the final examination, and the grade that will qualify for earned-exam credit. These university courses and exams will be different from what you remember, and AQ/EQ skill practice must be part of the overall curriculum. Let’s not forget that while the SOA exams are certainly difficult, the pass mark is six out of ten.
We are starting the program with schools that have qualified as Centers of Actuarial Excellence because these schools’ actuarial programs have already met stringent guidelines (Centers of Actuarial Excellence (CAE) Program Overview), offer courses that cover VEE and most of the ASA syllabus, and submit to oversight by the SOA. All of them may not apply right away as there is additional coordination with the SOA required to participate.
And for every school that chooses to participate, the SOA needs volunteers to accomplish the necessary monitoring and review. That’s one reason why we are not in a position today to offer this program to the hundreds of schools that offer courses in the ASA syllabus. But we need to begin with some schools, and the CAE’s are a logical place to start. There are no other cash-related or preferential reasons as some have asked. We expect the program will be successful and, if so, it will grow over time.
While 28 of the CAE schools are publicly funded and many are located in metropolitan areas, the Board realizes that these schools are not necessarily the ones that attract large numbers of bright students from underrepresented communities (in the U.S., Black, Latino, and Native American populations). Therefore, as we also announced, the SOA will be creating a program to provide financial, educational, and even staff support to schools with diverse student bodies to develop courses that would meet the same strict standards as for the CAE schools. This program may take a year longer to develop, and for financial and staffing reasons, it, too, will have to start with a limited number of schools.
In closing, I want to point out that the idea of using universities to educate actuaries has a long history around the world. For example, the Institute and Faculty of Actuaries in the United Kingdom has had an exam and university credit program for decades. Their oversight of universities’ curricula and exams is similar to what we are proposing. The Institute of Actuaries in Australia has made similarly extensive use of their universities for decades as well. Fellows of these two institutes who apply and satisfy SOA professionalism standards and courses have, for many years, been recognized as Fellows of the SOA.
As another example, for about the last ten years, the Canadian Institute of Actuaries has had a university exam exemption program applying to the ACIA and FCIA designations. That program has been recognized for the past decade by the Casualty Actuarial Association for ACAS and FCAS designations and through mutual recognition by the two Institutes mentioned above as well as the Actuarial Society of South Africa.
The aim of the long-term growth strategy is to increase the awareness and diversity of the profession while ensuring that actuaries remain highly sought-after professionals who develop and communicate solutions for complex financial issues. We need to make changes, and I trust that you can see that we are making them in a thoughtful way that maintains the high standards that we all value.
Roy Goldman, Ph.D., FSA, MAAA, CERA
President, Society of Actuaries