“Trends, Opportunities and Challenges: 2017-2021 SOA Strategic Plan”Part I: Environmental Observations

SOA Strategic Planning Task ForceOctober 2015

REFINE MISSION & VISION

Members can provide input in

2015.

Gather informatio

n

Introduction The SOA Board uses a strategic plan to guide its work. The strategic plan

describes what the organization wants to achieve over a specific period of time. The current plan covers 2013 through 2016.

The process of establishing a strategic plan has five phases – phase I is gathering information: about the trends in the environment, the actuarial skill set, roles and opportunities for actuaries, and what that might mean for the work of the SOA.

EXPOSE DRAFT PLAN

Scheduled to be released to

members for comments in July

2016.

DEVELOP CHANGE AGENDA

What are the critical changes needed to

meet vision and mission?

FINALIZE PLAN

Scheduled to be approved by the

Board at its October 2016 meeting.

Refine mission & vision

Expose draft plan for

comments

Develop change agenda

Finalize plan & initiatives

Talking to Members, Employers, Leaders

The Strategic Planning Task Force had conversations with members, employers, industry leaders and volunteer leaders. They identified key trends affecting the profession and the industries it serves, as well as opportunities and challenges for the profession.

Board of Directors

Employer’s Council

Section Council Leaders

SOA Member Panel

Key Industry Leaders

Board members gave input at their March 2015 meeting.

The 26 member Employers Council represents insurance companies, consulting firms, and recruiting firms; they provided input at their February 2015 meeting.

Section Council chairs and vice-chairs meet biannually to discuss key issues for the sections; Section council chairs met in April 2015.

Academics, C-suite leaders in insurance and consulting, regulators, SOA presidential officers and other leaders in the US, Canada and Asia participated in one-on-one in-depth interviews.

249 members of the SOA member survey panel gave their insights on key trends, opportunities for actuaries, and strengths and weaknesses of the profession. Key results from their survey are shown on the next panels.

Common Threads

The information gathered covered a wide range of topics – from economic and social forces shaping insurance, pensions and health care to how the profession can continue to recruit strong candidates. Four key themes are highlighted.

Big Data, Predictive Analytics

Regulatory Environment

Actuarial Skill Set

Strategic Thinking

Member Panel Survey

In addition, results from four questions posed to the member panel are shown side by side with the common threads.

Opportunities

Trends

Weaknesses

Strengths

Member survey panelists were asked “Thinking of the TRENDS that are driving the actuarial profession today, which of the following are most important?” They were able to select up to 5 TRENDS from a list of 16.

Member survey panelists were asked “Which of the following do you believe reflect the actuarial profession’s greatest STRENGTH(s)?” They were able to select up to 3 STRENGTHS from a list of 10.

Member survey panelists were asked “Which of the following do you feel represent the most important OPPORTUNITIES for the actuarial profession?” They were able to select up to 4 OPPORTUNITIES from a list of 13.

“Which of the following do you believe reflect the actuarial profession’s greatest WEAKNESS(es)?:” They were able to select up to 3 WEAKNESSES from a list of 8.

MEMBER

PANELSURVEY

Tapping into Big Data, Predictive Analytics

The rise of big data and predictive analytics was brought up by all parties interviewed: employers, industry leaders and members. It was identified as the number one trend driving the profession – and our number one opportunity – but also the area where actuaries need to catch up: Actuaries haven’t shifted their techniques to

respond to the new era of cheap, fast data. The actuarial insights may be sharper, but C-suite officers noted that the actuaries’ analysis is late in coming to the table, closing actuaries out of the decision making loop.

The power in data analysis is moving from finding trends in the past to being able to predict trends and model the future.

57% of members surveyed identified Big data/data

analytics as one of the most important trends driving the

actuarial profession

57% of members surveyed identified predictive

modeling/new uses for actuarial models as one of

the most important opportunities for the actuarial profession

46% of members surveyed identified big data/data

analytics as one of the most important opportunities for

the actuarial profession

Adjusting to Changing Regulatory Environment

The increasing effect of regulation has several implications for the profession:

• Actuaries struggle to keep up with changing regulatory requirements.

• Evolving regulatory frameworks drive new reporting and analysis. Some interviewees questioned whether actuaries had the right level of technical skills to meet the new regulatory challenges.

• The profession – and professional organizations – need to provide socially relevant information to policymakers and regulators. SOA research reports were cited as a good way for SOA to provide that information to those audiences.

50% of members surveyed identified increasing effect of regulation as one of the

most important trends driving the actuarial

profession

31% of members surveyed identified increasing effect of regulation on actuarial work as one of the most

important opportunities for the actuarial profession

34% of members surveyed identified research aimed at

policymakers, regulators and/or the general public as one of the most important

opportunities for the actuarial profession

62% of members surveyed identified the ability to solve complex problems as one of

the actuarial profession’s greatest strengths

37% of members surveyed identified competition for

roles from non-actuaries as one of the most important trends driving the actuarial

profession

Promoting the Value of the Actuarial Skill Set

Actuarial skill set isn’t well understood – by the public, employers, regulators, or policymakers. The public does not think of actuaries as key

players in risk management Actuaries are not seen as the profession that can

go beyond finding the data relationships and think about how the insights can be applied to business.

Actuaries’ technical skills may need to evolve to keep their professional advantage. One interviewee expressed it as “the mushy middle” - not technical enough for the new quantitative and regulatory demands, but too technical to frame business decisions.

32% of members surveyed identified lack of

recognition/ respect across industries as one of the actuarial profession’s greatest weaknesses

Encouraging Actuaries to Think Strategically

The profession continues to be criticized for – and to be self-critical of – its communication skills. The interviews highlighted that actuaries are focusing on communicating process and data, rather than recommendations and context: Actuaries aren’t providing strategic insights. One

interviewee said some of his actuarial colleagues were the most “thoughtful, intellectually grounded and strategic thinkers” – but that didn’t get unleashed unless someone else was asking them the right questions.

Some members and interviewees suggested incorporating more business skills into the actuarial credentialing process. More business focus in the credential might attract entrepreneurs and leaders whose interests lie beyond the quantitative education.

62% of members surveyed identified actuaries reputation for poor

communication skills as one of actuarial profession’s

greatest weaknesses

28% of members surveyed identified adding business

skills into the actuarial designation as one of the

most important opportunities for the actuarial profession

30% of members surveyed identified lack of actuaries in

C-suite roles in traditional industries as one of actuarial

profession’s greatest weaknesses

REFINE MISSION & VISION

Members can provide input in October 2015

Gather information

Next Steps The Strategic Planning Task Force is refining the SOA mission – what we do –

and vision – what we’ll achieve by 2021. Look for more updates and polls from the Strategic Planning Task Force

throughout the process. The strategic plan is about you and your profession. Your participation is an important part of the process.

We hope to report regularly to you through the strategic planning process until the release of the exposure draft for your comments in July 2016.

EXPOSE DRAFT PLAN

Scheduled to be released to

members for comments in July

2016.

DEVELOP CHANGE AGENDA

What are the critical changes needed to

meet vision and mission?

FINALIZE PLAN

scheduled to be approved by the

Board at its October 2016 meeting

Refine mission & vision

Expose draft plan for

comments

Develop change agenda

Finalize plan & initiatives