As you begin (or consider) volunteering with Society of Actuaries (SOA) Education, you may have questions. As a long-time SOA Education volunteer and past general chairperson of SOA Education, perhaps I have answers that will help.
My volunteer journey began in 1993. I had just obtained my FSA when I got a call from SOA volunteer Bruno Gagnon, FCIA, asking if I wanted to get involved in SOA Education. It’s been an incredible journey of learning, support and networking since. I hope your volunteer journey is just as rewarding.
WHAT BENEFITS DOES VOLUNTEERING BRING? The most interesting aspects of this endeavor are of a different nature. For example, the first privilege was to work with subject-matter experts who were highly regarded and respected in the industry and learn from them. This could be from a technical and leadership point of view. It was rewarding to see a group of volunteers with similar interests working together efficiently while having fun. The members had specific roles and would not hesitate to help their colleagues when needed. Over the years, SOA Education volunteers have shown they can adapt to change quickly. The adjustments that were put in place during the pandemic are a great example.
A member volunteer can gain experience and look for opportunities to grow in their role and take on different responsibilities. The possibilities are diverse, allowing a member to become an expert in their role or a leader within the exam team, depending on their interests, skills and circumstances.
Having participated in all the possible levels within the SOA Education volunteer structure, I honestly can say the experience has been challenging at times—but always highly rewarding. I would relive the journey at any time, as I made very dear friends along the way.
James Belich’s new book, “The World the Plague Made: The Black Death and the Rise of Europe,” shows the depth and longevity of the controversy over the sources and impacts of an era-defining scourge. Belich, an Oxford University historian,suggests that what is now known as the Black Death was so consequential that its effects equal those of the Enlightenment, the Reformation, the Industrial Revolution, and the Renaissance. It’s a staggering implication, but he makes a decent case for it in this bold, tremendously researched work. From illustrating the plague’s effects globally to showing how central it was to Europe’s ascension, Belich demonstrates that the medieval pandemic influenced many aspects of human life.
Once called the Great Death or the Great Plague, the pandemic lasted hundreds of years and was so deadly that it is still popularly referred to simply as the Plague. “The Black Death Pandemic, beginning in 1345, persisted for more than three centuries and involved about 30 major epidemics in all,” writes Belich. What’s more, it “did not always behave like the modern pandemic,” he writes further on. “It killed far more people, for one thing.” Belich’s book implicitly underscores that, compared to the devastation of the plague, Covid-19 is relatively insignificant.
Just how many deaths was the Black Death responsible for? Despite centuries of debate on the subject, there is no consensus. The common belief is that the first wave killed between 25 percent and 33 percent of Western Europeans. (The historian Barbara Tuchman advanced the one-third estimate in her best-selling 1978 book about the 14th century, “A Distant Mirror.”) Belich suggests that the number was far higher. In the first strike alone, the population of Western Europe was cut in half, he writes, citing studies about the death rates in England, France, Italy, and Scandinavia. Many places didn’t return to their pre-plague population levels for some 250 years. (Despite his claims, the true extent of the toll is still widely contested.)
In Belich’s view, what made the plague different from other major historical events and catastrophes was that, while it decimated the human population, it left the material world untouched. It “doubled the average amount per person of everything,” from horses to housing, he writes. For a time, this meant more resources for survivors and greater access to luxury goods, better living conditions, and higher wages for workers.
In health insurance, with the continual spike in Medicare, we forecast a huge shift towards this area and Medicaid in 2022, and beyond. With the way that the market has evolved, it’s possible that actuaries with experience in Medicare will be in-demand, especially as bid season is fast approaching. Alongside proficiency in risk adjustment, the Society of Actuaries (SOA) recently added a new exam for predictive analytics.
As always, for the property & casualty sector, the key modelling skillsets going into 2022 is R and Python. With the rise in cyber and ransomware attacks, this might result in a boom in cyber insurance and simultaneously the specialists, minimum of 2-3 years in underwriting, to better service this demand. In addition to fluency in modelling, designations from Associates of the Casualty Actuary Society (ACAS) and Fellowship of the Casualty Actuary Society (FCAS), has importance to employers and therefore significant currency in the market.
Why is the insurance industry now facing increased scrutiny on certain underwriting methods?
Insurers increasingly are turning to nontraditional data sets, sources and scores. The methods used to obtain traditional data—that were at one time costly and time-consuming—can now be done quickly and cheaply.
As insurers continue to innovate their underwriting techniques, increased scrutiny should be expected. It is not unreasonable for consumer advocates to push for increased transparency and explainability when insurers employ these advanced methods.
What is the latest regulatory activity on this topic in the various states and at the NAIC?
Activity in the states has been minimal. In 2021, Colorado became the first (and so far, only) state to enact legislation requiring insurers to test their algorithms for bias. Legislation nearly identical to the Colorado law was introduced in Oklahoma and Rhode Island in 2022, and it is likely other states will consider similar legislation. Connecticut is finalizing guidance that would require insurers to attest that their use of data is nondiscriminatory. Other states have targeted specific factors, but most have adopted a wait-and-see approach.
The NAIC created a new high-level committee to focus on innovation and AI, but it has become clear that a national standard is not likely at this time.
Author(s): INTERVIEW BY STEPHEN ABROKWAH, Interview with Neil Sprackling, president of Swiss Re Life & Health America Inc.
Arlington, VA – Two newresearch reports designed to guide the insurance industry toward proactive, quantitative solutions to identify, measure and address potential racial bias in insurance pricing were published by the Casualty Actuarial Society (CAS) today.
“These two new reports in our CAS Research Series on Race and Insurance Pricing continue to provide additional insight into industry discussions on this topic,” said Victor Carter-Bey, DM, CAS chief executive officer. “We hope with this series to serve as a thought leader and role model for other insurance organizations and corporations in promoting fairness and progress.”
As the professional society of actuaries specializing in property and casualty insurance, the CAS is committed to diversity, equity and inclusion in actuarial work. To this end, the Society is releasing a series of four CAS Research Papers, which support the CAS’s Approach to Race and Insurance Pricing. This approach was adopted by the CAS Board of Directors in December 2020 and includes four key areas of focus and goals: basic and continuing education, research, leadership and influence, and collaboration. Each paper in the series addresses a different aspect of race and insurance pricing as viewed through the lens of property and casualty insurance.
Defining Discrimination in Insurance. This report examines terms that are being used in discussions around potential discrimination in insurance, including protected class, unfair discrimination, proxy discrimination, disparate impact, disparate treatment, and disproportionate impact. The paper provides historical and practical context for these terms and illustrates the inconsistencies in how different stakeholders define them. It also describes the potential impacts of these definitions on actuarial work.
Understanding Potential Influences of Racial Bias on P&C Insurance: Four Rating Factors Explored. The paper examines four commonly used rating factors to understand how the data underlying insurance pricing models may be impacted by racially biased policies and practices outside of insurance. The goal is to highlight the multi-dimensional impacts of systemic racial bias, as it may relate to insurance pricing. The four factors included in the report are: Credit-Based Insurance Score (CBIS), geographic location, homeownership and Motor Vehicle Records.
These four research reports are just one way the CAS supports evolving actuarial practices and strengthens the knowledge of its members. The papers demonstrate the Society’s recognition that actuaries—who are responsible for setting insurance rates—must be a voice in an ever-evolving dialogue. The CAS understands that this work is critical to maintaining the Society and its members’ public trust.
In a groundbreaking TED-style talk, Dominic Lee, ACAS takes the audience on a multisensory journey beyond the boundaries of traditional insurance. He presents a framework for the actuarial profession to step into the future and claim its rightful place as a dominant force in the world of risk: Reimagine, Embrace and Explore.
THE ACADEMY hosted a May 26 webinar, “What Is Unfair Discrimination in Insurance?” in which presenters explored the current regulatory infrastructure relating to unfair and unlawful discrimination in insurance and the challenges presented by the increased use of big data and artificial Intelligence (AI)-enabled systems.
Presenters were Daniel Schwarcz, an award-winning professor and scholar; former Illinois Director of Insurance Nat Shapo; and Brian Mullen, chairperson of the task force currently revising ASOP No. 12, Risk Classification ( for All Practice Areas). General Counsel and Director of Professionalism Brian Jackson moderated.
Mullen opened by providing background on ASOP No. 12. Schwarcz discussed prohibitions on “unfair discrimination”—which occurs when an insurer considers factors unrelated to actuarial risk—in rates and underwriting. He noted that machine learning AI tends to produce the same results as intentional proxy discrimination. As a result, insurance becomes less available and less affordable to individuals because of their race, sex, genetics, health, or income. He also discussed a proposed definition of proxy discrimination, practical tests for proxy discrimination, and the benefits of such a definition.
The number of candidates sitting for entry level exam P and exam FM decreased over the last decade. Figure 1 below shows the total attempts for Exams P and FM halving over the past decade.
This represents an average decline of 7% per year across the two exams. This shows a major change from 2013 when the Actuarial Profession was consistently ranked #1 in national job lists and the number of candidates sitting for exams was growing year over year. For reference, Actuary is currently ranked #20, behind software developer (#5) and data scientist (#6).
One hypothesis is that data scientists and similar job openings are drawing potential actuaries away from the profession. To investigate this question, we queried fifteen colleges, actuarial clubs, and their recent graduates to see if this trend was noticeable, with key learnings summarized below:
Candidates at schools with Society of Actuaries (SOA)’s Centers of Actuarial Excellence (CAE) recognition are more than twice as likely to remain on the actuarial career path. Further, the strongest programs appear to attract other majors due to the top-tier program and resources
Recently established data science majors are pulling some students away from actuarial science and quite a few interviewees perceived that the popularity of the actuarial science program is declining
For international students, there is a general perception that it is harder to get an actuarial job that provides working visa sponsorship, while most data science jobs still provide sponsorship
The mixed results between the first two findings suggest that the strongest college actuarial programs are becoming stronger while schools with fledgling or small programs may be struggling. For example, actuarial career fairs tend to be successful only after achieving a level of scale so that they are well attended by both prospective hires and recruiters.
This research paper’s main objective is to inspire and generate discussions about algorithmic bias across all areas of insurance and to encourage actuaries to be involved. Evaluating financial risk involves the creation of functions that consider myriad characteristics of the insured. Companies utilize diverse statistical methods and techniques, from relatively simple regression to complex and opaque machine learning algorithms. It has been alleged that the predictions produced by these mathematical algorithms have discriminatory effects against certain groups of society, known as protected classes. The notion of discriminatory effects describes the disproportionately adverse effect algorithms and models could have on protected groups in society. As a result of the potential for discriminatory effects, the analytical processes followed by financial institutions for decision making have come under greater scrutiny by legislators, regulators, and consumer advocates. Interested parties want to know how to quantify such effects and potentially how to repair such systems if discriminatory effects have been detected.
This paper provides:
• A historical perspective of unfair discrimination in society and its impact on property and casualty insurance. • Specific examples of allegations of bias in insurance and how the various stakeholders, including regulators, legislators, consumer groups and insurance companies have reacted and responded to these allegations. • Some specific definitions of unfair discrimination and that are interpreted in the context of insurance predictive models. • A high-level description of some of the more common statistical metrics for bias detection that have been recently developed by the machine learning community, as well as a brief account of some machine learning algorithms that can help with mitigating bias in models.
This paper also presents a concrete example of an insurance pricing GLM model developed on anonymized French private passenger automobile data, which demonstrates how discriminatory effects can be measured and mitigated.
Author(s): Roosevelt Mosley, FCAS, and Radost Wenman, FCAS
Excel continues to be actuaries’ most widely used software tool, with more than 94.3% of respondents reporting that they use it at least once a day. • With that understood, most actuaries (92.3%) use more than one tool. • Actuaries want to increase their proficiency in R (47.2%), Python (39.1%), SQL (30.8%), and Excel (26.0%). • No tool had more than 50% of respondents indicating that they wanted to increase their proficiency. • Time is the greatest barrier to learning new technology. (80.5% of respondents felt so.) • Newer analysis methods such as tree-based algorithms and artificial intelligence (AI) are not widely used (16.5% and 7.0%, respectively).
The American Academy of Actuaries presents this summary of select significant regulatory and legislative developments in 2021 at the state, federal, and international levels of interest to the U.S. actuarial profession as a service to its members.
The Academy focused on key policy debates in 2021 regarding pensions and retirement, health, life, and property and casualty insurance, and risk management and financial reporting.
Responding to the COVID-19 pandemic, addressing ever-changing cyber risk concerns, and analyzing the implications and actuarial impacts of data science modeling continued to be a focus in 2021.
Practice councils monitored and responded to numerous legislative developments at the state, federal, and international level. The Academy also increased its focus on the varied impacts of climate risk and public policy initiatives related to racial equity and unfair discrimination in 2021.
The Academy continues to track the progress of legislative and regulatory developments on actuarially relevant issues that have carried over into the 2022 calendar year.