Uniting the actuarial profession
By Bradley M. Smith, FSA, MAAA
Depending upon your point of view, the actuarial profession is either “blessed” or “burdened” as the country faces societal problems that have substantial actuarial components. These issues include the funding and potential reform of Social Security, Medicare, and healthcare, and the underfunding of public pension plans.
Are we the cause of these problems? I maintain that we are not. But if we do not become part of the solution, we risk becoming facilitators of the problems. This is something that few, if any of us, want to live with. We must become more active participants in developing solutions to these problems.
So what am I asking you to do? I am asking every actuary to speak out about these issues. At cocktail parties. At neighborhood barbeques. At family gatherings. At your place of work. I’m asking you to give presentations to your local community clubs. To write your congressman. To write letters to the editor of your local newspaper. To tap the power of social media—be it Twitter, Facebook, LinkedIn, YouTube, or other media—in order to deliver this message. The SOA staff will be creating PowerPoint presentations on each of these four topics targeted to non-actuarial audiences for you to use as you deem appropriate. Incidentally, the Academy has developed some very helpful issues papers on these and other topics to help educate you and the general public. I encourage you to take a look.
But it’s going to require more than just a grassroots effort to create this kind of change. The structure of our professional organizations in the United States is an impediment to the profession, even as we look to help be part of the solution to these problems. In the last year, after a seven-year hiatus from serving as an elected official, I have observed that our professional bodies are more fractured than ever, and at a time when we can least afford bickering and infighting.
In the past couple of years we have received a message from many of the large employers of actuaries that the existing structure of the U.S. actuarial organizations is both inefficient and ineffective. The markets in which our employers work are highly competitive and are becoming more so. At a time when we most need concentrated, focused effort, we spend hours and days of precious volunteer, leadership, and staff time and effort finding ways to collaborate with one another and we duplicate our spending on many aspects of our separate infrastructures. These efforts are always well-meaning and often very helpful, but they are aimed almost solely at making our divided and disparate systems work. I believe we can put those resources to more effective use and gain important efficiencies as well.
The SOA’s members, when asked to vote on a proposal to combine and make more efficient just one aspect of this structure, the recent Joint Disciplinary proposal – voted by a margin of 94% to 6% in favor. Over 80% of the CAS voters had the same view, as did 93% of the Academy members who voted and 93% of CCA voting members. In other words, you, our members, strongly supported such efficiencies.
Many of the profession’s leaders and its employers, in private conversations and public statements, have expressed the view that a more efficient and rational structure for the U.S. profession makes sense. Several of them have tried in various ways over the years to achieve change. Steve Kellison, former president of the SOA and former executive director of the Academy, stated in an article in the October 2005 issue of The Actuary:
“Put simply, there are too many actuarial organizations for a profession of our relatively small size. Our overall organizational structure collectively is too complex and the end result is sub-optimal…I see this largely, perhaps uniquely, as a problem facing the profession in the United States…There is no strategic vision for the profession as a whole…Despite repeated good-faith attempts to define “who is responsible for what”, lack of clarity still pervades everything we do…Effectiveness and efficiency are difficult to achieve under the current structure…the current structure requires a lot of communication and coordination…Every hour spent in coordination and communication activity is an hour not spent actually doing something to advance the goals of the profession…competition among the organizations invariably arises…To the world outside our profession we appear to be a fractured, convoluted, even disorganized profession.”
The Critical Review of the US Actuarial Profession (CRUSAP) report issued in late 2006 stated:“….the organizational structure of the profession results in a significant distraction to the profession’s leadership at a time when it is facing unprecedented challenges in meeting its goal of best serving the public…the current organizational structure is an impediment to an effective voice for the profession… Accordingly, we recommend that the actuarial profession establish the consolidation of the actuarial profession as a long-term goal.”
Since then, a number of our leaders have attempted to address these issues and in the most recent election, several of our candidates for president-elect also expressed the view that structural change is needed.
The current structure is not positioned to compete in the global marketplace. It seems clear that 10 years from now this structure will no longer be in place. It has been my experience in the commercial world that if you know you are destined to go a certain direction eventually, you are better off getting there sooner rather than later. There is no need for three separate professional organizations—the SOA, the CAS and the AAA—to exist. They must be merged into one efficient, effective organization. Despite the obvious difficulty, I am prepared to focus energy and time during my term as president seeking this change, while we continue serving members and candidates in our current structure.
Although the SOA Board has expressed no view on the matter, I plan to ask our leadership and Board to support my efforts to make our professional organization’s structure more rational, more efficient and more effective, much as a previous generation of the SOA’s leaders did in 1949 when they formed the SOA by merging the Actuarial Society of America and the American Institute of Actuaries.
I am asking the leaders of other U.S.-based actuarial organizations – principally the Academy and CAS – to join in this effort for the good of the profession, its members and candidates, and the stakeholders we serve.
I am asking the members of the SOA and the employers of its members – who I believe strongly support this idea – to express their views in support of this objective, both to me and to the leaders of the other organizations and to encourage them to participate in this effort. Write emails. Express your views on blogs like this and on other relevant online locations. Contact the members of the boards of these organizations. Get the word out to members not at this meeting. Use social media. Call for change. Today, I am asking that we do what needs to happen so that we as a profession can meet the societal challenges that face us. With your help, we can be a part of the solution.
Please share your thoughts below.