Accredited actuaries must complete continuing education hours each year and conferences are held to meet these needs. My boss is active in one of the regional education bodies and invited a coworker and I to go. The first session was on a piece of legislation affecting insurance companies which requires a certain type of financial report each year. The discussion was a round table and I quickly realized that no two people there had the same experience. Some people were reserving actuaries, others pricing, others do everything. Each in different lines, each in different size firms, and across a spread of states that may choose to interpret the requirements differently. This was a gathering of actuaries specifically in the property casualty field and a presentation specifically for companies that’d be affected and still there was enough diversity among 35 people that no one really had anyone else they could specifically ask.
The next session was a presentation by the president of a risk retention group, a special type of insurer, in this case for schools. The presenter made a few interesting notes:
1) The firm expects more people to be going through schools but for less time.
2) Schools offering credit for work and life experience are popping up.
3) The IT dream for insurers hasn’t come. I think the phrase was “IT was a promise that turned out to be a black hole that sucks in money.”
4) Schools being liable for sexual assault is leading towards universal requirements that students take online defense and anti-assault training. Huge drop in claims for schools that do.
5) Top tier schools are stuck for innovation. Regional colleges are mostly doing the innovative stuff.
6) For Profit schools haven’t really taken off.
Some of the other sessions were either above me or boring, but one later in the day focused on actuaries on Capital Hill. The presenter talked about how he realized the actuarial world needed to get better at messaging when a leading Republican senator said “I like actuaries, they’re truth tellers. But I don’t know what you’re saying half the time.” The presenter also made mention of another law maker who had said “I didn’t really buy climate change when the scientists talked to me about forecasts or hippy dippy types kept talking to me, but when actuaries started giving presentations about the effects, I knew something was happening”. This last part made me a little proud. The presenter also noted that it was hard to get actuaries to go to DC. “People who can talk to a lawmaker and have that kind of numerical skill are usually bought up by someone”. Interesting.
The day was long. I knew two people there from outside of my firm out of 200 but I imagine that’ll change over time. It felt good to be part of a larger actuarial community but I was alarmed at how few people there were under the age of 40. Many of the students present weren’t necessarily going into the actuarial field. I hope it’s not the case that I’ll be forever part of the younger attendees.
“Looks good, put a disclaimer on it and send it out.”
“Really? You don’t want to change anything?”
“Nah, it looks great. Didn’t find any errors.”
And with that, my first solo pricing was out in the world. The work wasn’t particularly complicated but it required a bit of leg work and I had taken steps to explain my assumptions so a 3rd party could follow. The recipient received the work, said thank you, and any errors or insights were now part of some vaguely defined “record””. Hooray, I suppose.
I’ve been doing solo pricing for about a year. I’m to the point where I can figure out when I need to raise my hand and ask for an adult and when I can just kind of run with something and add a footnote pointing out what I did. I consider it the actuarial equivalent of being able to ride your bike in a straight line but having trouble turning. Luckily, many destinations are a straight line from where I currently am. The critical question seems to be “why shouldn’t I do this” vs. “why should I do this other thing”. Often there’s a collection of acceptable methods and it’s more a process of removing the wrong ones and picking rather than simply drawing the correct tool from the rack. Maybe this changes over time (I imagine it does) but hopefully it doesn’t represent hubris or laziness.
For now, I’ll go in long straight lines and at minimum try to pedal faster.
Me: Hi, I have a few questions about the pricing for the account you passed me.
Broker: (in a strong Dutch accent) Yes yes, what is it that you need?
Me: I’ve not priced many life and health accounts before, is there much development on these losses?
Me: Yes. Usually due to reporting lag losses for some period of time I higher a year after the close of the accounting period vs. a few months.
Broker: All payments must be requested within 90 days of billing.
Me: So claims don’t pop up later?
Broker: No. It’d be billed to successive years. Most people with chronic conditions go to the Netherlands but there is one little boy who is fighting a bone marrow infection and has been for two years. Everyone hopes he gets better.
Me: Me too.
Broker: Curacao has less than 200,000 people on it, Mr. Robinson.
In a very basic way, the goal of a reinsurance broker is to know his customer. This fellow seems to.
At the end of the call, he mentioned that he may try to arrange a call between me, him, and the chief actuary of one of the largest insurers on the island. I sounded a bit flummoxed at this, having never really talked directly to a client, and he added “don’t worry, he hasn’t been an actuary for that long”.
I mentioned the call to my boss “I’m terrified.” Her response was “me too”.
I got in work very early on Monday. A coworker was returning from vacation and I wanted to have something done in advance of his return. Work started for me at 6am and I was largely finished by the time he got into work. I told him what I had done, he told me to make some changes and I spent the day making them. One or two parts were rather tricky so it wasn’t until the end of the day that I finished. I shot the lead a note that I was done but it probably needed some clean-up and asked to talk in the morning.
This morning, I arrived and the lead shot me a message of “for time’s sake, let me make the fixes and I’ll go over them when I’m done”. Seven hours later he messages me. “Done, please do an editorial review.” Cool. I open the work file and almost nothing of my work remained except for two things: Modifying the color of the column headers and a single calculation. I wasn’t mad or upset, but smirked at how wrong I had been. How absolutely off-base I had been with my assumptions, how naively I treated calendar year accounting, and how underdeveloped my accrual calculations had been. I started laugh. A non-actuarial coworker heard me, and asked what was funny.
Me: Imagine someone asks you to make a sandcastle and after getting some basic instructions you do it. You finish and you look at it and go “eh, not bad. Could use work though.” You tell the person who requested it that you’re done and they say “I need to make a few changes” and you think “I guess I didn’t nail it but I helped!”. At the end of the day you come back and see a completely new sand castle there. So new, in fact, you think they trucked in their own sand because it’s not even same color. On closer inspection you do see that they did use some of your work: a single plastic figurine you had added to yours was preserved. Then the person asks you to check their sand castle to make sure it conforms to what they wanted.
My two priorities are getting a better job and improving my health. Â As they are priorities, I’m actively working on them and they win when they get in fights with other tasks. Â I go into work late and stay late if I have a late night running and social events lose to work functions that may allow me to advance myself. Â Part of the “better job” priority has been catching up on actuarial math and preparing to re-take exam P/1. Â My calculus muscles were very out of shape when I started and I cursed myself for not remember if it was the integral or derivative of f'(x)/f(x) which equaled the ln(f(x)) but after a bit the work grew on me. Â I was again dealing with things where I was unambiguously wrong. Â Data at work can be misinterpreted, interactions with people are indecisive but with sample test questions I had the opportunity to do something I had missed, being simply and irrefutably wrong. Â In that I find freedom.
A relative thought I should combine my actuarial training and my people skills to start a morning talk show with me as Dr. Terry, the Feel Good Actuary.Â Each show would start with me reminding people with each day they’re alive they’ve set a new personal record and I’d then take calls from people who aren’t dead.Â I’d essentially get paid to sugar coat mortality statistics like “Only 8% of people with pancreatic cancer live more than 14 months.Â You can be that 8%!”Â I could also help people navigate life insurance questions and such.Â Finally, the show could serve as a sleep aid because I can’t think of anything duller on the radio than fielding insurance questions.