Guts

 

Timothy Paris, FSA, MAAA, chief executive officer for Ruark Insurance Advisors, Inc.

Timothy Paris, FSA, MAAA, chief executive officer for Ruark Insurance Advisors, Inc.

  • The implementation of a principle-based approach to reserves and capital for life and annuities
  • The completion of two longevity risk transfer deals worth more than $30 billion
  • Multiple reinsurers making competitive quotes for an unexpected and financially viable growth opportunity that stretches their expertise
  • Public speaking and idea proposals to an audience of international experts
  • Successfully launching a new business, marketing strategy and risk management technique

Some of these recent and current activities are worth billions and others with no monetary value at all. Some involving the world’s largest companies and others just a handful of people interacting at a personal level. What unites this disparate list? As a participant or interested observer to each one, I can tell you that they share one remarkable trait—actuaries with a lot of guts played an essential role.

Are you skeptical? As a group, that is our heritage. And I would posit that we are less accustomed to thinking of ourselves as visionaries, provocateurs, “we are going through that wall leader types.”

Perhaps I am in the minority, but this is my aspiration. I am quite sure that I fall short more often that I would care to admit, but as I stand here, with the benefit of 20 years of actuarial, financial, marketing and leadership roles behind me, I feel that all of these experiences, good and bad, have led me to realize how powerful the role of the actuary can be. It has little to do with the usual criteria in the career surveys. In terms of safety, comfort, compensation and perks, it’s tough to beat an actuary. The whiff of hot asphalt still transports me back to simpler times when I was paving roads on summer break from college, tan with a full head of hair and without a care in the world. Fun in my mind’s eye, but I wouldn’t want to make a living doing that now. I’ll take the creature comforts of the actuary any day. But it goes way deeper than that.

It is a recognition, mainly in the insurance business but gradually expanding more broadly, that as actuaries we are uniquely qualified by both training and mandate to lead initiatives that require an intelligent assessment of financial risk. Nowadays, safe harbors are receding into history, to the extent that they ever really existed. Adherence to canned processes and rules-based quality control is no longer a badge of honor, but an admission of blind spots. As one example, the transition to a principle-based approach for reserves and capital for life and annuities is just such an admission, and the fact that it is such a long process only indicates how massive a change it is. But this is a good thing—actuaries are leading the way into the new era, just as we led in the old one. We are raising the bar for ourselves and our industry, and the same goes for the other activities in the list above.

Warning: Actuaries moving beyond their traditional core of insurance and pensions to broader risk management roles means that we face more competition—with sharp minds and talons. So we had better stay very serious about initial and continuing education, not to perpetuate the status quo or a credential, but for the sake of our own survival.

It is vitally important that we develop the self-confidence and poise to articulate a value proposition for ourselves and our ideas at a personal level, not just generically as “an actuary,” however strong that label may be. The objective isn’t merely shameless self-promotion or financial gain, but to use our unique set of skills for the greater good. We should continue to seek clarity and technical accuracy, but also to create and be bold, and be our best possible selves.

As a relentless critic of myself and others, I am slowly learning that nothing in this world is perfect. Not me, not you, not the regulations, not our work, and not our latest and greatest idea. So we need to not sit on the sidelines waiting for the perfect circumstance, but to get in there and make things happen. Pick up the phone. Get on the plane. Have the difficult meeting. Take a stand. Don’t dither. We need to do our best guided by the law and our code, learn from our mistakes, collaborate when it makes sense, and get on with it.

We live in interesting times that are volatile and confusing, but that creates great opportunities in the business of managing risks. As actuaries, we are well equipped for success, but we’ve got to have guts.

Read the full article by Timothy Paris in The Actuary.

Timothy Paris, FSA, MAAA, is chief executive officer for Ruark Insurance Advisors, Inc. He can be reached at timothyparis@ruark.co.

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