How often has one come across this profession? 9 out of 10 people who have heard about it say it is “something to do with insurance”. And it stops there.
While the work of an actuary involving assessment of the cost associated with an insurance or a pension promise continues to be essential, their skills extend far beyond this narrow scope. Actuarial skills are built on putting a value on long-term uncertainty, and the country would benefit from putting this expertise to work in far more places than it currently does.
So what are some of the non-traditional areas that actuaries are working in today?
Let us look at how Frank Chang, Past President of Casualty Actuarial Society and current Vice President of Applied Science at Uber, uses data science in his job. This clearly is a non-traditional area. Frank says “Actuaries have a lot more techniques for dealing with thin data, whereas the vast majority of data scientists are content to rely solely on p-value and power analyses. We are a lot more careful when jumping to conclusions, take in more business context, and are trained in finance and accounting, so we can better translate results into business and financial impact.”
This is echoed by Nalen Naidoo, CEO of Property24 and current President of Actuarial Society of South Africa. “My job is to keep a large digital marketplace valued, trusted, and commercially successful. This requires breaking complex pricing decisions into assumptions, drivers, and scenarios and distinguishing signal from noise in large volumes of consumer behaviour data. Actuaries are trained to think logically through problems, to develop and act on feedback loops, to consider multiple stakeholders in decisions, and to transparently exercise professional judgement” Actuaries are one of the oldest data scientists in the world. Actuaries are trained to take a long-term view on the models and ask whether it is fair, explicable, and stable over decades, and not just focus on its near-term prediction abilities. Actuarial training helps develop and refine the core skills of quantifying uncertainty and long-term risks. This would transfer to several domains that help businesses understand financial consequences of their decisions using probability to appreciate outcomes.
Back home, Ajay Shekhar, Chief Operating Officer at IDEAL Fastener India Pvt Ltd, has taken his actuarial training into a totally new industry of manufacturing. Says Ajay, “Risks come in many dimensions, not just financial. The plethora of expertise gained during the qualification process in a wide array of topics, and in a very real world manner trains us to be better risk managers in a wide array of fields. There is also a big mental element to the qualification process that toughens us up to systematically handle circumstances that we hadn’t planned for” How does one make inroads into non-traditional areas? There are various ways to break the barrier. One way is to make actuarial work visible and legible to non-actuaries. It is not about passing the exam but about the potential that one’s actuarial training holds, so communicate the outcome of your experience in business language and not in a technical/actuarial language.
Another way is to “raise one’s hand” for a visible side project. “I entered the media and tech industry almost four years ago, after working seventeen years as an actuary in executive and non-executive roles across life insurance, general insurance and pensions. In the last five years of my core actuarial work, I took on an opportunity to work in the innovation space at my employer, where I was responsible for various Insurtech and fintech assets that had been built or acquired over time. This required me to upskill in my tech skills and knowledge of innovation methodologies, which I embraced through various learning interventions (formal courses and informal learning). Through this exposure, I became interested in how innovation happens outside the financial services industry” says Naidoo.
Frank Chang spent 7 years as a traditional actuary, working across general insurance pricing and reserving as well as across multiple different lines of insurance. This background was useful for my interview at Google which got me my job offer. I felt like this was the opportunity of a lifetime, so I said yes! The rest is history.
Ajay, on the other hand had pretty much always been in the non-traditional side. He started his career in the credit division of Ford Motor Company but also worked on several projects on the motor side covering almost every department that allowed him to see things holistically. While he contemplated about the move to IDEAL India, he realized he was really enjoying his work and just continued doing work he liked to do and in places where he could made a clear difference.
Moving to a non-traditional role requires unlearning a lot of things. This, in some sense is the hardest part. For one, traditional work requires precision and a credibly weighted data set. In non-traditional areas “directionally right and fast” scores over “exactly right with credible data/models”. It also requires greater collaboration across different functions and stakeholders. I had to move to being a technically handicapped person in the zipper industry who had to paddle through a bunch of technically minded egos (ironically, similar to myself) to get stuff done. It was a battle against myself for the first few years. However, this phase helped humble me, helped me progress significantly as a human being, and to be more receptive to ideas of other people, says Shekhar.
More often than not, actuaries put boundaries around their work. As per Frank Chang, many actuaries pull data from a curated, reliable source, perform analysis, then believe their job is done – they turn that in for others to use. If the data is wrong, another team is responsible. They provide multiple views that could have broad interpretation, whence, if the business makes the wrong business decision, another team is responsible. As actuaries, we need to take a broader view of our responsibilities and be invested in the success of our stakeholders as well as help those who supply us with data.
I needed to make decisions with imperfect information, partly relying on gut feel, rather than waiting for more perfect information – this was particularly uncomfortable for a numbers-person, and involved me having to develop a better sense of risk-reward trade offs reminisces Naidoo.
Organisations—both public and private—constantly commit resources today against an uncertain tomorrow. Actuaries possess the exact analytical rigor needed to solve these universal problems. It is time the profession and the nation recognise actuarial science as a cross-industry superpower.
India trains a large number of actuarial professionals, but the profession's public image, and often its own career instincts, still point almost entirely toward insurance and retirement benefits work. That is a missed opportunity. As the country builds itself towards Amrit Kaal including social protection for informal workers, expands health coverage, deepens its financial regulatory framework, and confronts climate risk at scale, it needs people trained to think rigorously about long-term uncertainty in rooms where that skill is currently in short supply: ministries, regulatory bodies, hospitals and technology firms, not only insurance companies.
Insurance and pensions remain the profession's largest employers by a wide margin. However, actuarial training is best understood not as a credential for an industry, but as a credential for a “type of problem” or “any situation” where an organisation must commit capital today against an uncertain, long-dated liability.
The next generation of actuaries entering the profession would do well to see their training not as a ticket into one industry, but as a licence to work on any problem where an organisation, public or private, has to commit resources today against an uncertain tomorrow. That problem is everywhere. It is time the profession, and the country, treated it that way.
The author is the President of Institute of Actuaries of India. This article is the first in a three-part series on non-traditional areas for actuaries.
About the Institute of Actuaries of India
The Institute of Actuaries of India (IAI) is India’s statutory actuarial body, established under the Actuaries Act, 2006. IAI regulates actuarial education, examinations, and professional standards while fostering excellence, ethics, and innovation. It develops globally competitive actuaries who serve the public interest across insurance, pensions, risk management, and financial systems.
The above information is the author's own; Outlook India is not involved in the creation of this article.
