President’s Message TOM WILDSMITH
Who Are We, Anyway?
WHAT DOES IT MEAN TO BE AN ACTUARY? I’ve seen several definitions over the years. Some try to
define our profession by describing what actuaries do, often mentioning such things as setting insurance
company premiums and reserves. Some try to describe a common set of tools and techniques that are central to actuarial work. In the past, this type of definition often mentioned life contingencies and mortality
table construction; more recent ones may mention newer techniques, such as stochastic modeling. Still other
definitions attempt to describe, in conceptual terms, the ultimate goal of actuarial work. They may talk about
measuring and managing risk, or quantifying the financial impact of uncertain future events.
I’ve learned something about our profession from each of
these approaches. But there are problems with all of them. No
list of “typical” actuarial tasks can capture the breadth and diversity of our profession, and there’s no single set of “common”
job duties performed by all actuaries. Our tools and techniques
are equally diverse. They’re also a moving target. When I took
the exams, they reflected what most actuaries had been doing
10 to 15 years earlier. While the material was sometimes dated,
working through the exams helped me develop the critical skills
I needed to succeed in my career. Conceptual definitions are often so abstract as to be virtually meaningless. Safety engineers
manage risk, and bookies quantify the financial impact of uncertain future events. What’s unique about actuaries?
Actuaries live at the intersection between mathematics
and business. My baby sister is a mathematician—I’m not. My
training as an actuary is very different from what she studied
pursuing her doctorate in mathematics. Early in my career,
many actuaries were concerned about competition from MBAs.
That fear has largely receded. They could not take the place of
actuaries, because our training is very different from a graduate
degree in business. But we do have a foot in both of those worlds.
The balance between the two varies from country to country. In
Germany actuaries look very much like mathematicians who do
business; in other countries they may look more like business-people who do math. But wherever you go, actuaries blend the
disciplines of mathematics and business.
So, in a sense, ours is a bastard profession—neither fish, nor
fowl, nor good red meat. This is the source of our strength. We
were multidisciplinary before it was fashionable. Actuaries
aren’t hired because they’re better at math than a mathematician, or know more about business than an MBA—we’re hired
because we have a special blend of skills that neither a mathematician nor an MBA can offer.
But there’s one other thing that makes actuaries unique. We
are a profession.
Actuarial science was born in the space where business and
mathematics come together because important promises are be-
ing made. With insurance and pensions, promises are made that
affect real people—promises to rebuild a home destroyed by fire,
to pay for a child’s medical care, to provide an income in old age
or cash when a mother or father dies. Our work has public sig-
nificance because of the importance of these promises.
The impact of our work on people’s lives creates moral and
ethical obligations on our part—the public has given us its trust.
Honoring this public trust requires more than mathematical skill
and business acumen. It requires a commitment to doing the right
thing. This is a commitment we must make individually as actuaries,
and collectively as a profession. The purpose of our professionalism
infrastructure—including our code of conduct, qualification stan-
dards, standards of practice, and disciplinary process—is to ensure
that we are able to keep our commitment to the public.
The actuarial profession in the United States dates back over
200 years. Actuarial techniques change over time. The jobs ac-
tuaries do change over time. But when I meet an actuary from
a different practice area, or a different country, I recognize a
brother or sister in a common profession. That’s not because
they happen to use use the same formulas I do, or have the same
job description. I recognize them as fellow actuaries because we
stand together in that space where business and mathematics
meet, working with promises that matter, and sharing a com-
mon commitment to live up to our professional obligations.
The strength and unity of the actuarial profession is not
based on all of us using the same mathematical models. We
can—and should—each apply the tools and techniques that
are most appropriate for our particular areas of practice. The
strength and unity of our profession is not based on all of us
having the same education. We can—and should—each study
those areas of mathematics and business that are relevant for
the work we will be doing. The strength and unity of our profession is based on a common heritage of bringing mathematical
skill and business acumen together to ensure that important
promises are kept, while at the same time recognizing a shared
professional commitment to meeting our ethical obligations to
This is who we are.
Endnote: These thoughts were triggered by a recent dinner conversation with Ron Gebhardtsbauer. I'd like to thank Ron for the
stimulating conversation. The content is entirely my responsibility,
however, and any blame should be laid solely at my feet.