How to recognize the actuarial professional

Mária Kamenárová
Vice-chairperson AAE 

 

We all want to receive the best service and care in all aspects of our lives as we believe we are worth it. How to define the best service is a matter of individual preference: service for the best price, the best time (as time is money), or the best value for money, usually linked with professional care?

 

It seems as if we need professionals in our lives every day. When searching for the internet definition of professional person, the following can be found: “The professional is the person who manage the specialized education on the general knowledge. Professionals have the skills and competence that are expected from them and they use to give the best service to others.” Possibly, the other illustration of professionals can be found in sports environments, where the difference of the professional practicing the sports activity, opposite to the hobby or amateur athlete, is easy and clearly visible and recognizable by many people. Not only by the difference in their abilities, but also by their performance.

 

But when coming to the financial industry this differentiation might not be so obvious at first glance. The financial industry is the home base of various specialized professions, the actuarial profession being amongst them. However, the actuarial skills and specialized education are hard to be defined and evaluated. Therefore, the actuarial community has been paying increased attention to provide the professional service for many years already. The comparison of the professionals in actuarial fields to other type of mathematically-skilled or statistic-science-mastering persons does not give intuitive answers. Thus, as of January 2021, the whole European actuarial community, covering actuaries in 27 EU member states and ten other European countries, has increased the professionalism standards by implementing new Code of Professional Conduct. So how to recognize who is the actuarial professional; who knows the game; has a higher chance to win and plays by the rules?

 

Here are some do’s and don’ts that might help to recognize actuarial professionals based on five principles:

  • Do things the right way even though nobody is watching. Act honestly and avoid having a hidden agenda for personal profits – Integrity;
  • Carry out work-related activities and give professional advice in the business areas the actuary has relevant education and sufficient experience in. Avoid giving the impression of being a faulty expert, or not to know the legislation of the business and location where the service is provided – Competence and Care;
  • Know the rules and regulation and market norms and stay within in the playing field. Avoid using shortcuts like pushing for higher profits up front and expected losses later on – Compliance;
  • Act without undue influence that shall replace the expert judgment. Avoid conflict of interest – Impartiality;
  • Adjust your language and writing-style to the audience to ensure that key elements of the message are understood without passing on important conditions or limitations. Documentation is the key element, whereas communication is required in translating numbers as output from complex mathematical models to actionable messages to company decision makers – Communication.

 

As expectations from the actuarial profession have increased, the bar has been set to a higher standard. Although, in practice, things are easier said than done; actuaries understand their field of expertise and strive to become better recognized professionals that provide actuarial services to the highest possible standard every single day.

 

This blog is written in a personal capacity.

2 March 2021

One thought on “How to recognize the actuarial professional

  1. According to Wikipedia (on 2 March 2021), the definition of a professional is: “a member of a profession or any person who earns their living from a specified professional activity. The term also describes the standards of education and training that prepare members of the profession with the particular knowledge and skills necessary to perform their specific role within that profession. In addition, most professionals are subject to strict codes of conduct, enshrining rigorous ethical and moral obligations. Professional standards of practice and ethics for a particular field are typically agreed upon and maintained through widely recognized professional associations, such as the IEEE. Some definitions of “professional” limit this term to those professions that serve some important aspect of public interest and the general good of society.”
    I think it is quite a good definition. Maybe the “IEEE” could be replaced by the “AAE”😊.
    I think the most important difference between a professional and an expert is that the professional belongs to a professional body that is described above.
    The AAE’s definition includes a disciplinary process (which might be understood to be amongst the ethical and moral obligations) but lacks the strict requirement of having professional standards of practice. The AAE does not require that its member associations issue professional standards of practice; instead, it requires that if a member association issues professional standards of practice then developing and promulgating such standards should be subject to a proper due process. Shouldn’t the AAE move forward and think about replacing this softer requirement by a harder one so that the AAE’s member associations should comply with all European Standards of Actuarial Practice?
    Anyway, I fully agree with the do’s and don’ts mentioned by Maria.

    Gabor Hanak

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