Excellent points. Maybe the adage “If you aren’t growing you are dying” applies here? What if you were on the board and you saw these numbers? Would you stick with what you were currently doing or would you seek to get to the root of the problem and take action? If you did nothing then it may come to the point where it was too late. How would your constituents take to that?
I’m not arguing in favor of the actions the SOA has taken. Personally, I’m more interested to see where this is all going and why but that’s probably just me.
The impact to current ASAs and FSAs is an excellent point and I understand everyone’s concerns. My view if the SOA can keep the credentials relevant and in demand that will help all of us. Us credentialed actuaries may need to step up in our CE to keep up with the younger folks but I’d say that’s a good thing.
I think we can draw some clear conclusions from the data in 2015-2019. The downward trend had already been established before 2020. What really matters is what happens in 2021 as things go back to normal. Are the changes in the world going to somehow exacerbate the trend that had already begun? At some point we would expect a pop in exam takers, right? Those people that delayed taking exam P and are graduating or looking for an internship will need to get that exam under the belt so shouldn’t there be some kind of pent up demand? Time will tell, but I’m glad they are doing something before this becomes a bigger problem for the profession. Again, I’m arguing in favor of change, not necessarily the specific actions they are taking.
The table below shows the number of people that have registered for Exam P through the March sitting of each year. This shows that while there is a rebound in 2021 from the 2020 lows, it has not bounced back to 2019 levels. In fact 2021 is 25% lower than 2019, with data through March. In early 2021 much of the country was still shut down so again, take this for what its worth.
The ASA boom may be a race to get the ASA before new requirements came out. For example, I don’t know if that was around the time Exam PA came out.
So each year the ASA and FSA counts are going to change due to three things 1) newly credentialled actuaries 2) retiring actuaries, and 3) actuaries that let their membership lapse but are not retired. Does that cover it all? So the formula would be (1) - (2) - (3) for the increase/decrease in actuaries. If we look at category 2, you would expect this number to be small since there were much fewer actuaries in the past, right? So to get 0% total growth (2) and (3) would have to be the same as (1). Let that sink in a bit. That not good. I suspect in coming years this will be negative due to the lag in the exam P numbers unless the SOA does the right thing, whatever that is.
Yes it was - you had to have completed all ASA requirements by July 1, 2018 to avoid taking Exam PA. So 1) people rushed to avoid that and 2) those who didn’t finish in time now had one additional exam on top of the other requirements, which slows designations down.
Alternatively, you could argue, “If you’re bloated, some parts of you need to die off to reach a sustainable equilibrium.” Perhaps we have 10% too many actuaries in the SOA now. Perhaps we could grow by 50% and still not meet all the demand. (Though I doubt that, because the SOA doesn’t do much for marketing the actuarial skill set outside of the traditional industry, which means the demand is pretty well confined to the places we’re already prevalent in.)
I feel like, if the SOA said, “Hey, people, we need to double the actuarial profession in the next 20 years or everyone’s going to go bankrupt and you’ll all end up pushing spreadsheets for the marketing folks at the Fortune 1000 sweatshops, here’s why,” and showed us that we need X actuaries per 1,000 population and we only have 0.5X now, a bunch more people would get on board with alternative education methods.
As it is, this feels like a solution searching for a problem, to me. The SOA hasn’t sold its members on the need to keep a current membership in the SOA very well, beyond the gatekeeping aspect of limiting access to the ASA/FSA designations
Giving Data Science a path towards ASA sounds similar to the to a prior initiative.
Turned out financial engineers and risk managers weren’t that interested in joining the actuarial profession. Why would would a data scientist working outside of insurance be interested irrespective of how easy membership could be attained.
Cool article but I’m talking about students those that choose a career in data science over actuarial science. Sorry I didn’t speak more precisely but I thought that was clear. The UEC program makes it more difficult for those in other majors to chose a career in actuarial science. Also the UEC program does not address the fact that many “would be” actuaries are choosing a career in data science. The SOA has communicated a number of times that this is one of their concerns. But we have yet to see how they will address it other than exam PA. My speculation is there may be other Data Science type things added to the exam track. For example, instead of Exam P maybe there will be another exam that will test more data science type stuff, further creating a modular education system. So the candidate could take either P or this other exam to satisfy the first requirement for ASA.
I disagree with you. The problem came before the solution and I think that is very plain to see. The SOA has repeatedly stated that we are losing potential members to a career in data science. Do you see any evidence that the declining exam numbers are a mere correction in the market because there are too many actuaries? Do you see bloated actuarial departments at insurance companies? I sure don’t. I see insurance companies trying their darndest to figure out how to utilize rapidly changing technology to not fall behind and maybe even get an edge on the competition. I see them hiring data scientists that know how to interpret the vast amounts of data they have amassed. I see them putting these data scientists on actuarial teams because it overlaps with the actuarys’ work. We should be good at those things. We should be the solution. The way I see it is that data scientists are encroaching on our territory.
You may say that you see no problem with data scientists working in an actuarial role and I would urge you to reconsider. Because that is the greatest threat to your credentials losing their value, which seems to be everyone’s concern with these changes. What if our roles are reduced down to what is mandated by regulation? Signing off on SAOs, Actuarial Reports and the like. How long before regulation changes? How long before the data scientist figures out how to use machine learning to make a pricing algo that makes your excel class plan analysis completely irrelevant? How long before AI can be proven to set reserves at much greater accuracy than your lag triangle method? I’m not saying our profession is dying I’m just saying we can see these things taking shape right now and we need to be at the front of these changes so that we are the solution, not some other profession.
Students become actuaries because there is a career path which provides automatic raises and promotions by passing exams and becoming credentialed. Until data science positions provide similar incentives I don’t see the attraction to attain a credential which is very expensive to maintain. Your claim mimics the claim made in the article that you said was cool. Financial engineers are closely related to actuaries, As it turned out the allure of the actuarial profession wasn’t that great.
My son has a Masters in data science and works for the IRS, Attaining an actuarial credential would have zero value for him. Once again why would someone in data science not working in insurance want an actuarial credential. .
Agreed. Again talking about students trying to figure out what their profession will be, not trying to get other professions credentialed. If someone likes data science then there will be a lot to like about the actuarial science profession. So there is potential to recruit an actuary there.
Ok, so recruit data science students. Tell them that they will have to spend the next several years trying to pass exams that actuarial students at so CAE schools will graduate with. Or possibly create a whole new track for data science that will prove as successful as the Casualty Insurance track. .
Thats what I’m saying! The UEC/CAE thing alienates other majors. That’s why I think they have something up their sleeve to recruit those guys. I don’t think it will be a whole different credential but maybe alternate exams that can replace exam P and others. Exams with more data sciencey elements in it. Maybe something akin to micro badges that someone majoring in Data Science will be interested in that will at least get them in the door.
I am glad you used the term up their sleeves. I find the SOA to be a duplicitous organization. Let Me give an example. Earlier this year academics were invited to a webinar which was supposed to lay out the SOA plan for education modernization. Not one mention was made of UEC.
Yeah, a little more transparency would do wonders for their PR. They keep things so close the vest and operate like they are regulated by the SEC or something.
Cabal – Def. Wikipedia, “A small group of people, united in some design, usually to promote their private views or the interests of an ideology, state, or other community; often by intrigue and usually unbeknownst to those outside their group.”
It seems to me that the approach to education issues should always be modernized based on what needs and requirements are currently presented to educational systems. For example, at asa college miami, where I graduated, there was a need for practical training for future doctors. Therefore, students had a lot of practical classes, and teachers usually experienced surgeons, therapists, etc. It allowed us to get high-quality knowledge and know that we are doing everything right from the first stages of work in the hospital.