Volatile, Uncertain, Complex, Ambiguous.
Such is our world, and our instinctive tendency may be to crouch into a fetal position and hope things get better on its own…
Yet we have to get out of that after some time, and start facing this world..
How do we face this VUCA world - does it bring new opportunities for us?
Indeed, Risk is Opportunity (the Society of Actuaries’ slogan) - when we boldly face our fears, the world looks different.
As actuaries, a VUCA world brings a plethora of opportunities to contribute to businesses and policy makers to better assess, understand, avoid and mitigate risks. In fact, this may be an inflection point for our profession. Our importance and contribution across a variety of domains is set to grow, as long as we place ourselves strategically to maximise our potential.
We need to equip ourselves with the aptitude and attitude to surf and thrive on the waves this VUCA world brings to us.
Here are some thoughts on how we can do that.
Learning and Collaborating with Adjacent Professions
Accountants and lawyers have an amazing advantage that they have penetrated into nearly every domain, company and region. They are recognised as an essential profession ubiquitously.
They are analytical in nature, assess and analyse risks, provide recommendations to avoid and mitigate risks and even help to implement those recommendations. In a different way from actuaries of course, but in a way that is much more broadly understood and recognised.
We actuaries can collaborate with them in various ways - collaborating with accounting and legal companies, encouraging career changers from accounting and legal backgrounds to enter the actuarial field & harnessing their cross domain knowledge for synergies, and perhaps learning and incorporating from those fields as well in our actuarial practice.
Data scientists too have have been penetrating a much broader range of industries which recognise the need for Artificial Intelligence solutions - in practice this often means the applications of machine learning and predictive models. The data science profession unlike the accounting, legal and actuarial professions, lack standard setting & educational bodies; and this is an aspect the actuarial professional organisations can step in with (which is already happening).
Moderninizing the actuarial toolkit and education with approaches from data science is crucial. Furthermore, opportunities to collaborate with data scientists should be explored.
Regional & Global Mindset
“My home is everywhere, everyone is my own.”
Such was the feeling of an ancient globe trotter thousands of years ago…
It’s human nature to be deeply rooted in our identities attached to our country of birth, race, religion, age, etc. But again, only humans (as far as we are aware) possess the ability to transcend these shackles of name and form. And now is a better time than any time before to transcend these shackles. At a click of a button, we can connect with people across the globe, and discover how we are all essentially the same.
When we thus connect with people transcending our limited identities, the world indeed becomes our own. There are diverse problems and opportunities available across different countries, and actuaries have the privilege of being part of a global profession. There are very little limitations to an actuary practicing in different countries, subject to supply and demand considerations.
Working within a single country, we are subject to its economic and currency risks. These risks are indeed significant, as we see some economies shrinking and some expanding due to geopolitical reasons, global competition, economic policies etc. When we work with a regional & global market, we are able to hedge this risk through diversification.
We find that global economies are no longer moving in tandem, and some countries and regions are developing faster than others, providing more economic opportunities.
We need to place ourselves in strategically optimal positions to take advantage of this situation. Regional roles are typically available in consulting, reinsurance, MNC insurance, and InsurTech/FinTech companies. It is easier to do this earlier in our career, so that we set ourselves in a regional & global trajectory. It may not be impossible to make this shift later in our career, but we become more costly for employers to experiment with, and senior roles are much fewer in number than junior roles.
Generalist Mindset
"Jack of all trades & master of none", goes the saying.
But the full saying is actually:
"A jack of all trades is a master of none, but oftentimes better than a master of one"
There are benefits and disadvantages to being a specialist or a generalist. But my strong view is that, in this era, a generalist path is much more appropriate.
Actuaries traditionally have adapted a specialist approach. Life, Health, Motor, Property & Engineering etc are all deep domains which take a lifetime each to master. In some developed markets such as North America and the UK, the specialist approach will continue as there are vast numbers of actuaries in each domain.
In markets such as Asia and Africa, there is an acute shortage of actuaries - especially qualified actuaries. However, certain business segments are booming (especially Health & General Insurance/Property & Casualty Insurance), while some business segments (especially Life Insurance) are contracting. Given the shortage of actuaries, this is a golden opportunity for actuaries to take up opportunities in different domains and regions, expanding their horizons & economic outcomes.
Opportunities are also emerging in Cyber Security and Climate Risk.
I'm tempted to throw in Artificial Intelligence in this too as an emerging area, but it does seem to be over-hyped. My view is that demand for talent comes from areas with problems to solve, not from new technology alone. That being said, Artificial Intelligence does have applications across a broad range of domains - but to apply it, we will need some knowledge of those domains too.
In Conclusion...
Expanding our Luck Surface Area is generally a wise thing to do in my view. Let's build a wide spider web to capture opportunities - and when we find more opportunities from certain specific areas, we can then double down on them.
Comments