Key Characteristics of the Actuarial Leader Richard Fein, Ph D, FCAS, MAAA [email protected]...
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Transcript of Key Characteristics of the Actuarial Leader Richard Fein, Ph D, FCAS, MAAA [email protected]...
Key Characteristics of the Actuarial Leader Key Characteristics of the Actuarial Leader
Richard Fein, Ph D, FCAS, MAAA [email protected] CAGNY Meeting June 2010 RIF Consulting, LLCRichard Fein, Ph D, FCAS, MAAA [email protected] CAGNY Meeting June 2010 RIF Consulting, LLC
The Actuary as Leader
• Agenda
• Goals
• Characteristics of Teams of Professionals
• Guiding Principles
• Expectations of Stakeholders
• Characteristics of Leaders of Pros – Chief Actuary
• The Rubber Meets the Road
• Conclusion
Characteristics of Professional Teams
• Working with Professionals
• Many discussions and characterizations are available
• Good site: Bob Kizlik reference on my site
• Self motivated to learn profession
• Takes on responsibilities and obligations
• Cannot dictate/coerce professionalism
• Work “with” as opposed to “manage”
Characteristics of Professional Teams
• Identified need/service
• Defined body of knowledge which supports decision making
• Highly Educated/Broad Areas
• Protracted preparation process
• High level of public trust
• Strong service motivation
• Authority to practice from the client
• Accountability by the practitioner
Guiding Principles
• CAS Credentialing
• CAS Statements of Principles/Exposure Draft of Foundational Statements
• Regulatory/Financial/Jurisdictional Requirements
• ASOP’s
• Codes of Professional/Ethical Conduct
• Precept 3 : 3-1, 3-2, 3-3
• Precept 8 : 8-1
• Personal Beliefs - Individual, Family, Community
Stakeholders
• Board of Directors, Owners/Shareholders
• Auditors, Regulators, Others
• CEO, CFO, Chief Underwriter, Executive Management Team
• Actuarial management staff, Actuarial team
• Family, Friends, Community
• Yourself
Expectations
• Expectations of Stakeholders
• Honesty & Integrity
• Professionalism
• Knowledge - Business & Technical
• Credible Understandable Analysis of Alternatives
• Acknowledgement/Communication of Risks
• No surprises
Key Characteristics of Chief Actuary
• Clear line of sight to CEO/Audit Committee/Board
• Acceptance of and support for Authority over Actuarial Matters - Who sells vs. Who books.
• Credibility among Executive Management• Experienced, qualified and communicative
team with open 2-way communication at all levels - training and rotations? 2 edged sword.
• Assures team’s high level of active knowledge of firm’s businesses and operations
Key Characteristics Chief Actuary
• Identifies and shares risks and uncertainties of estimates with Executive Management
• Has clear understanding of assumptions and bases for conclusions drawn by support team and across operating areas in which teams operate - Consistency matters
• Formalizes communications with key stakeholders: Senior Executive Management, Claims, Underwriting, Pricing, Reinsurance, Finance
• Clear, well-documented presentation to management of support for methods, estimates and relevant changes
Key Characteristics Chief Actuary
• Assures stable and responsive methodologies, updated and supplemented by objective tests and special studies
• Vision/Proactive• Anticipates future areas requiring
additional analyses/data• Assures a sound, high quality, relevant
database to support methods - Who owns/secures?
• Assures clear professional and managerial direction to all staff
• Assures continuing education and training
The Rubber Meets the Road
• Example - Sample Quotes
• “You need to be a team player”
• “We can’t afford to price it that high”
• “Forget the tail, it gets washed out by competition”
• “This is an important client/quarter/year/result/etc.”
• “Ignore that aberration - it won’t happen again”
The Rubber Meets the Road
• “Just take 3 year averages and use them - can’t go wrong as it’s a time tested and utilized methodology”
• “There goes the bonus!”
• “My supervisor insists on looking at all my assumptions - rude and unprofessional.”
• “Guess what, my supervisor doesn’t look at any of my assumptions, unless the overall result is unexpected - no worries for me.”
• “The Auditor is challenging our results - YIKES, you did what???”
The Rubber Meets the Road
• Words have power:
• “We can’t afford another hit to income this quarter/year” “This kills our earnings”
• Leader
• Team Members
• “Just use the “tail” factors we developed in 19XX. Used the last year. We always use them. “
• Leader
• Team Members
Conclusion
• Environment - Professional, Business, Personal
• Broad Spectrum of Stakeholders
• Broad Expectations - At Times Conflicting
• Miscommunication is high risk
• Theoretical vs. Actual
• Had to pick one: Personal Accountability
Key Characteristics of the Actuarial Leader Key Characteristics of the Actuarial Leader
Richard Fein, Ph D, FCAS, MAAA [email protected] CAGNY Meeting June 2010 RIF Consulting, LLCRichard Fein, Ph D, FCAS, MAAA [email protected] CAGNY Meeting June 2010 RIF Consulting, LLC