ADJUSTMENT NEEDED
Professionals dropping actuary jobs for sexier gigs as data scientists
Insurance industry needs to rebrand actuaries to draw in workers,
Riley Howsden has one of those hip jobs everyone loves to hate. He works at L.A.-based video game producer Riot Games, where business attire includes hoodies, the food comes free and his job entails deducing what kinds of products gamers might buy.
Howsden’s current data science gig couldn’t be further afield from his previous one as an insurance actuary — a job so stereotypically mundane the inside joke is “an extroverted actuary is someone who looks at other people’s shoes.”
“If I was to write a cover letter for a job, it’s much easier for me to detail my passion for video games than it is to detail my passion for insurance,” said Howsden, 32, who spent weekends playing video games in his hometown of Oshkosh, Neb., population 884. Soul Searching Howsden’s career pivot is at the root of some soul searching going on within actuarial communities. Seasoned actuaries often earn more than $200,000, and the field perennially ranks near the top of “best career” surveys. A Bankrate.com survey from this summer called actuarial science the most valuable bachelor’s degree based on pay and employment. However, industry conventions are rife with warnings that data scientists are encroaching on actuaries’ turf, and that their lack of speaking skills keeps them in bookish roles at insurers.
Mike Lombardi, a past president of the Society of Actuaries, called the industry’s challenge to stay relevant an “existential one” in a speech last year and warned that “complacency is not an option.”
Data science draws the same type of students and appears to be growing far faster, according to stats from Indeed.com. Job postings per million for data science or scientists rose 23 per cent in October 2017 and 33 per cent last month when compared with a year earlier. ‘Shockingly bad comb-over’ The situation is more muddled for actuaries. The profession’s two main credentialing bodies, the Society of Actuaries and the Casualty Actuarial Society, each report that membership is growing by single digits. However, Indeed.com’s actuary job postings fell in 2016 and 2017 before rebounding this year; yet even with a bounce back, the number of 2018 postings are fewer than two years ago. The wave of mergers in the insurance industry could be one reason for this. But data science is increasingly performing similar functions.
“Although it’s important to society, the insurance industry doesn’t have the greatest image,” said Stephen Mildenhall, an actuary and risk management professor at St. John’s University in New York. “To the extent that there’s a sexy part of actuarial jobs, it’s the part that data science is doing.”
Actuaries have a time-honoured stereotype as sociallyawkward nerds. Some in the business revel in the exaggeration. When Hollywood in 2002 released About Schmidt starring Jack Nicholson as an awkward actuary with a terrible comb-over, the SOA released a geeky retort: “Portrayal of actuaries as math-obsessed, socially disconnected individuals with shockingly bad comb-overs is 97.28892 per cent incorrect.” $1,000 an hour New actuaries with the highest credentials, or fellows, typically earn $125,000 (U.S.) to $175,000, plus bonus, said Pauline Reimer, managing director of industry recruiter Pryor Associates. A significant number earn as much as $500,000 and $1,000an-hour actuaries are not uncommon, said William Fornia, a pension industry actuary outside of Denver.
“We’re well-paid, and if a data scientist can do 60 per cent of what we do and do it cheaper, that’s a threat to us,” Fornia said. “We have to add value over what we do.”
Their enviable salaries owe partly to the length of their studies and their rarity. Becoming a full fellow requires passing a series of exams that often take seven years to complete.
Mary Pat Campbell, a longtime actuary now doing insurance research, is seeing more ads pushing the benefits of actuaries to banks and hedge funds, she said. She has seen younger actuaries departing for sexier industries like data science, akin to the way actuaries left for tech firms in the 1990s.
“Actuaries have been doing data science for years,” Mildenhall said, “but didn’t know to package it up as ‘data science.’ ”