Predictive Analytics Case Study: Steve Fredlund, FSA
Since this interview, Steve Fredlund has started his own consulting company, Steve Fredlund Consulting.
Steve Fredlund's vision has led him into professional positions that even he - an actuary - couldn't have predicted.
Steve loved math in school but didn't realize its career potential until his college advisor turned him on to the actuarial field. His love of statistics and a forward-looking mindset found their perfect outlet in actuarial science.
After getting his degree in mathematics, Steve spent 16 years as an actuary in roles of increasing responsibility at Minneapolis-based Thrivent Financial, a Fortune 500 not-for-profit financial services firm that also specializes in life insurance and annuities. While much of what he did fell in the realm of traditional actuarial work, he had the opportunity to push the boundaries of his experience into predictive analytics as the actuarial director in the Asset Liability Management area.
In that role, Steve leveraged his extensive knowledge of Thrivent's business processes and products, risk management and investment expertise, and his actuarial training to make predictions about future trends using data and analytics. Among other things, he started and managed Thrivent's capital market hedging program thanks to the intersection of his unique skills.
After a brief stint in the nonprofit sector, Steve returned to the life insurance industry at Allianz Life. His role in Profitability Management put his predictive analytics experience to the test, and he eventually transitioned to leading the daily analysis and production for the capital market hedging of the global variable annuity portfolio.
When the Human Resources department at Allianz Life decided to build its analytics capabilities, they turned to Steve and his visionary approach to predictive analytics. Workforce optimization was a relatively new concept in the industry and brand new for Allianz Life. Steve seized the opportunity to use his analytical skills and business experience to get more involved in the broad business.
"When we solve actuarial problems, there tends to be more of an emphasis on the 'right' answer-or at least a 'right' answer given a set of assumptions," Steve said. "When dealing with workforce analytics, it can often get a bit messier because there can be far more factors, several of which are based on non-rational behavioral."
That said, he believes his work today and the techniques he uses are directly related to his roles in hedging-the key difference is talking about people instead of business results.
Steve worked with his team to establish a road map for the future or workforce analytics, including a foundation built on systems, data and automation. He started changing mindsets and helped move people from reporting to analytics.
"Analytics is about digging much deeper into discovering the 'why' things happened rather than just the 'what' and then using those insights to predict future outcomes, ultimately leading to decisions to optimize business results," Steve said.
While workforce analytics is still new, Steve is already seeing early wins, including analysis and actions related to call center turnover, organizational expertise, performance ratings, diversity and development of candidate profiles to maximize effectiveness.
While Steve believes strong analytical skills are vital, he is quick to credit his soft skills-leadership, vision and communication-with his unique successes, both in his professional roles and in several entrepreneurial and volunteering roles outside the office. He adds that his actuarial experience gives him a unique perspective because he understands the insurance industry's processes and products and sees the connections between workforce modeling and the company's long-term goals.
Based on his experiences, Steve sees diverse predictive analytics opportunities for actuaries interested in nontraditional career paths, both in the traditional realm of life insurance and in new spaces like HR.
"Predictive analytics will embed itself in all major technical, social and societal issues-everything from car insurance to security to nonprofit work," Steve said. "So, the question may not be how to get into analytics, but how to incorporate analytics into whatever you decide to do."