Career Advancement: One Actuary’s Learnings from a Lifetime of Work
By Bob Leach
The Stepping Stone, September 2024
At a recent reunion with 1970s college friends, some who became MDs told me that my career choice was better than theirs. During the 1970s, medicine was perhaps the most sought-after career path for college graduates. Since I considered the medical profession myself while in college—but put it aside because my chemistry skills weren’t up to the task—I found their comments intriguing. Some of their feedback relates to how health care cost control efforts have impacted doctors. But a lot comes from growing respect for our profession (now rated a top choice in many surveys— ahead of MDs!) and the success I had achieved.
I recently retired after a 47-year actuarial career. Looking back, I happily report that the work was enjoyable, and I achieved reasonable career success. Through a process of trial and error I was able to identify certain behaviors that enabled me to advance. Although I am proud of my career, I also recognize that my accomplishments were not as great as they could have been. So I’d like to share some thoughts on habits that helped with career advancement, as well as skills that, had I spent more time developing them, might have enabled even greater success.
The following behaviors were very beneficial to my career progression. I know this based on frequent feedback from colleagues, who told me that these practices were helpful to achievement of our shared goals. That positive reinforcement caused me to turn them into habits, which I practiced repeatedly:
- Use your actuarial training to develop a model of how your business works, keep this model in your brain, and use it to evaluate everything you see. Understand how your business benefits customers, how it makes money, and its key risk exposures. Highlight opportunities and issues that others may be overlooking. You’ll get noticed for this!
Hint: it’s often helpful to build spreadsheet models to facilitate understanding of how different, inter-related factors affect the outcomes of a business problem. You might be surprised at how often you’re the only one who has done this!
This habit may sound like a given for actuaries, since it’s what those exams taught us to do. But I have been surprised at the number of actuaries who somehow decide not to invoke these intellectual skills. Try to avoid being one of them!
An example comes from my experience as an appointed actuary. I worked closely with our modeling team to understand how different interest rate scenarios (the “New York 7” and others) impacted projected sufficiency of reserves. We used our collective actuarial knowledge to affirm most results, but also challenged outcomes that didn’t seem logical. Sometimes the challenges led us to discover issues in the model, but more often we gained even deeper insights into how the many factors impacting cash flows—reinvestment, bond call features, policyholder behavior and others—interact under different economic conditions. While our asset adequacy model was a recognized actuarial software package, we often built side models in Excel to help us better understand how various drivers interacted under different conditions. This helped us defend results to auditors, regulators and company management.
- If you identify a project that could improve the business, and no one else is working on it, start doing it yourself—don’t wait to be asked! To put it in simpler terms— be proactive. In his 1989 book The Seven Habits of Highly Effective People, Stephen R. Covey identified this as habit #1. People will appreciate your efforts to enhance the business, and they will take notice.
At one point, I was responsible for pricing group annuity products. Stepping into this role, I reviewed pricing factors and found that there was no study supporting the expense pricing assumptions. Anecdotally, I learned that the factors in use were developed when the product line was launched years earlier—but no one had any documentation. With help from the accountants, I built a model office that recognized current actual expenses and in-force counts, along with projected future business and expense growth. Although no one asked for this, and some were frankly apprehensive when they learned I was working on it, in the end everyone seemed to agree the new model was a big improvement in terms of realism and defensibility of expense pricing assumptions.
- Volunteer, but be prepared for the unknown and seek help from others to get the job done. Volunteering may sound a bit like the prior bullet point, but there is a crucial difference. In taking initiative on a project that you think needs to get done, you typically have a complete vision of how your work will improve the business. As a volunteer, you may be leading an effort that someone else believes is needed, but you (and maybe even they) may not have complete information about how to accomplish the objective. To overcome this obstacle, revert to those self-teaching skills which were honed so well by the actuarial exams—and welcome all the help you can get!
At one point, senior management asked for a volunteer to lead my company’s efforts to achieve proper hedge accounting. This was before hedge accounting rules had been well established in the industry, so a big learning curve was required to ensure proper structuring of hedge programs. Further complications were created by hedging across multiple product lines, and reporting simultaneously under different accounting regimes (GAAP, statutory, tax, IFRS, etc.).
Having worked for some time in the world of asset-liability management, I knew a bit about hedge instruments and key concepts like duration and convexity. But after volunteering to lead this effort, I quickly came to realize how much I didn’t know. Thankfully, since this project was so crucial, many people from other disciplines jumped in to lend a hand, and as a team we got to a good outcome. And my efforts to lead this initiative were gratefully acknowledged by many across the company.
- Practice humility. Acknowledge—and learn from—your mistakes, ask for forgiveness when you have offended others, and express gratitude to those who help you along the way. I’ve heard some leaders say they like people who have a bit of attitude and a chip on their shoulders. Secretly, no one really likes people like that, and it’s a short step from there to that most dreaded state—arrogance! To be sure, self-confidence is an important leadership quality. But self-confidence doesn’t have to get in the way of humility.
Pricing and management of annuities and other non-par contracts requires close coordination with the investment department. While I was in a pricing role, my manager and I participated in periodic meetings with the company’s investment officers to discuss factors impacting our ability to compete—including availability of various types of assets, and pricing seen from our competition. At one of these, I went on a tangent that some took to imply that I knew more about the investment process than the investment officers themselves. After the meeting, my manager told me—much to my chagrin—that my insolence had offended several of our investment partners.
After taking a day to think about this, I decided to visit each of the investment officers who were present at the meeting—in person, at their individual offices—to apologize and ask their forgiveness. Each of them had the same reaction: they didn’t think an apology was necessary, but they all appreciated my taking the time to reach out. And following that, my relations with the investment department were never better!
While the above four habits helped to propel success, my career eventually hit a plateau, and I was unable to regain momentum. Work remained interesting and rewarding, but I noticed that peers continued to progress and exceeded me in responsibility and recognition. It seemed like a real-life example of the 1969 book, The Peter Principle. Author Laurence J. Peter posits that "In a hierarchy, every employee tends to rise to their level of incompetence." Looking back, shortcomings in two areas represented incompetence that hindered further career progress:
- Build and maintain business relationships. Connect with others in a position of influence who can help you succeed—but don’t forget to be respectful to those who may not be on your critical path. Make a habit of reaching out to partners and influencers—pull them in for regular chats, invitations to important meetings, occasional lunch visits and even after-work activities. If you’re on the right track, they will respond by inviting you to play a bigger role in their decision-making processes.
The nature of the professional development process for actuaries places huge reliance on our ability to be self-sufficient. No one else can take those exams for you, so the path to initial career success—achievement of the FSA designation—breeds a habit of looking inward, not outward. But once the FSA is achieved (and even before then), it pays to start practicing outreach.
I never quite got this until it was too late. The first half of my career was marked by success that seemed to come primarily from an ability to figure things out for myself or through a small team. Habits like this, once formed, are hard to break and can become self-justifying. When I got to a relatively senior management level, I got invitations to work-related social events but felt awkward and uncomfortable at them, and I’m sure this became apparent to others. Had I taken more time to develop relationships, these events would have felt more natural, leading to further helpful business connections.
- Create a back channel to get feedback on how you’re doing. Don’t be 100% dependent on your boss and immediate team members for this crucial information. Seek feedback from those who are directly impacted by your work. If you work in product development, talk to the people who sell—or even better, use—your product. On the valuation side, ask the accounting team how they perceive your group, and proactively ask them how you can improve teamwork between the two areas.
At the peak of my career, I led a business unit that handled most functions (product development, customer service, finance, IT, etc.) for a large product line. We worked closely with a separate group that handled sales and marketing. My decision-making process relied mainly on feedback from my team members, with limited input from partners on the sales/marketing side.
Feedback from my manager was generally positive, so I assumed that our business was on the right track. While I heard rumblings of discontent from our sales/marketing partners, I didn’t pay enough attention to it—until a decision was made to narrow the scope of my responsibilities. Building a better communication channel with partners outside my direct area of responsibility might have led to a better outcome for my career.
Of course, there are a lot of self-help books on career management, and trying to remember all the good advice that’s out there would be more challenging than preparing for an actuarial exam! In the end, you must decide which practices work for you, and go with them. Most importantly, be flexible—learn from your mistakes, and adjust as needed. My MD friends are right—you have chosen a challenging and well-respected profession. Now make the most of your choice!
Statements of fact and opinions expressed herein are those of the individual authors and are not necessarily those of the Society of Actuaries, the editors, or the respective authors’ employers.
Bob Leach, FSA, retired in April 2024 following a 47 year actuarial career that spanned across six different life insurance companies. He can be reached at bobleachfsa@gmail.com or via LinkedIn.