Educating the Actuary of the Future

Have you noticed that some things are harder to do than they are to watch, while it is the reverse for others?

A good example of the first case is exercise – much easier to watch someone else. In the reverse is manipulating a spreadsheet – ever tried to watch someone else only to find yourself saying “just give me the keyboard”?

Interestingly, study seems to be something that is much easier to watch than to do. Ever noticed how many people who sat exams years ago are convinced that they’re so much easier now?

In a related sense, debates about a subject’s syllabus often end up with the ‘watchers’ lamenting that the real material has been dropped out for more namby-pamby touchy-feely content while the ‘doers’ complain that what they’re studying is no longer relevant.

This is of particular importance to the profession right now. Last year Council created a working group (representing a broad cross section of the membership) charged with making recommendations to Council on their vision for educating the actuary of the future. It was considered that there are four key objectives to be addressed by the education process:

  • actuaries should be equipped to operate successfully in a dynamic business environment;
  • actuaries can effectively apply their skills in new and emerging fields and are flexible and adaptable in theirthinking;
  • to attract high quality entrants to the profession; and
  • maintaining global recognition of the Australian qualification.

The working group was asked to initially start with a clean sheet of paper – what would we create if we were starting from scratch. From there consideration has been needed to be given to the current state of play and international requirements.

The Education Strategy Working Group (ESWG) has consulted a broad range of members and has developed a straw man proposal for what the Associate level qualification might look like in future. It is now in the process of seeking feedback from members in specific areas for refinement and submission to Council. Assuming all goes well the refined straw man will be put before all members following the September Council Meeting.

This is an extremely important piece of work for the Institute. The manner in which students are educated has changed significantly over the last decade and the actuarial education needs to adapt to maintain its relevance. As part of making the necessary changes we need to have a sensible debate about what elements of an actuarial education are core and what can be electives.

Arguably a first step is to agree on what the actuarial paradigm is. The issue of an actuarial paradigm was highlighted by Richard Fitzherbert in his 2006 paper titled ‘Paradigms, Research and Recognition of the Actuarial Profession’ and it could be argued that the issues raised have not yet been adequately addressed.

My initial thoughts are that the core skills of an actuary can be described as having a cohesive understanding of financial mathematics, economics, accounting, insurance and statistics. Is that enough or good enough? We do need to consider the actuarial paradigm as part of this debate – what do we own and what should we own?

In order to prevent the debate from spiralling out of control there are some key base assumptions that need to be accepted and in my view these are as follows:

  • the changes are not going to allow a reduction in the standard or quality of new actuaries;
  • the contents of the syllabus need to meet the needs of the actuary of the future and not the actuary of the past;
  • the syllabus requirements need to have some flexibility to enable people with a broad range of academic backgrounds to enter the profession without prohibitive barriers to entry;
  • universities will be needed to provide a large proportion of the actuarial education; and
  • the Institute needs to maintain its gatekeeper role and must be able to determine accreditation.

The ESWG and Council are very keen to receive feedback from members in relation to the straw man proposed by the ESWG as we work towards developing an education framework that will meet the needs of actuaries for the foreseeable future. You should expect to see more following the Council Meeting in September.

We need to consider the actuarial paradigm as part of the ‘future Actuary’ debate – what do we own and what should we own?

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