What do actuaries need to make it into the C-Suite? An interview with Charles Hett

What strengths can actuaries bring to a senior executive level role?

I think there are two levels to this. Within an insurance company an actuary has a strong understanding of the organisation’s products, as well as good knowledge of the insurer’s financials. Actuaries will often also have had wider contact with different business functions e.g. underwriting, claims management, investment – and especially so if they have supported business pricing. They can bring a wide base of experience and understanding of the needs of the business.

In a wider context, actuaries can take a structured approach to any problem or task they face. A good example of this is the “actuarial control cycle”: this involves incremental decision-making with good feedback loops. You consider the information, make an assessment and choose an action, then re-assess again to improve on the decision. This means actuaries are often working to find a good or even ideal solution to an issue, and they are careful; oversights rarely happen. Actuaries also tend to be more attuned to risk, which is an asset in any decision making role.

What do they have to overcome to be effective as executives?

The main challenge for actuaries is to be clear in all their communications. It’s a bit of a hallmark of the profession to talk with jargon, in some contexts this is fine, more often than not it can add unnecessary complication to any message. My advice to overcome this challenge would be to think through to the essence of what you want to say, and then just say that and as needed explain later. Trim the detail.

It also helps to be aware of the perspectives and knowledge that others are working with, and ensure the message fits with that. A common example of this is using numbers; actuaries have a strong mathematical background and it can be easy for them to overestimate familiarity and comfort that others have with numbers.

What executive level roles are best suited to the skill set of an actuary?

Well this depends on the company, and what roles there are! A few obvious ones that could be a good fit:

  • CFO (Chief Finance Officer)

  • CRO (Chief Risk Officer)
  • In some insurance organisations there may be a Chief “Product Person”
  • Senior project management - sometimes
  • CEO – especially in an insurance company.

What perceptions do others have about actuaries that could affect getting an executive role, and how might they overcome those?

Actuaries can often be seen as overly negative or risk averse. This leads to people feeling actuaries tend to ‘shoot down’ good ideas – perhaps before they are fully explored. The key is to think about how you are making comments or criticism. You may have heard of the ‘bad news sandwich’; always cushioning criticism with what you liked about an idea – this can go a long way.

Actuaries can also be perceived as overly focussed on financials. I believe that financial knowledge should be seen as a strength, but best when paired with a broader strategic and business view. For example, I might try to send team members to participate or experience other roles within an organisation, especially sales teams, to give them a chance to see wider business issues in context.

Another common perception can be that actuaries are not confident enough to speak their mind. Of course if they are quiet in a meeting it could be due to many reasons other than a lack of confidence, but either way actuaries need to learn how to speak out in business settings.

Are there any additional designations or qualifications that you think make actuaries more attractive (e. g. MBA, CFA, accounting qualification, etc.)

There’s nothing specific that comes to mind, I’d say an MBA won’t be particularly helpful, but I would recommend pursuing something extra that pushes you out of your norm (and comfort zone).

What from your actuarial background has helped you in your exec roles?

It is easy to underestimate the respect the profession holds, and that respect can be extremely useful in many contexts. I also believe that actuaries have great methodologies and tools they can use. They tend to try to “look through” the initial appearance of a problem to figure out what’s really happening or going on in any given situation.

On a more personal level, I have tended to read widely; actuaries in general terms have access to a broad range of material which is a great way to round out your knowledge. Also, perhaps the fact the training is difficult, means actuaries are good at sticking with problems until they’re well solved.

Anything else to add?

The trends over the last few years I think seem to indicate fewer actuaries in the C-Suite, and this may link with the insurance industry becoming less specialised. People with highly technical skill sets can potentially become less valued in organisational structures. Alongside this is I think now there is wider pool of business people for insurer executive roles;  people can make lateral moves from other industries. This is a reality and I believe actuaries and an actuarial perspective can still add much to senior roles, but we have to earn it. I am hoping more actuaries – alongside building good technical skills - put their energies into understanding other people’s perspectives, and earn that experience and respect needed for executive level roles. Then I believe we will see a positive shift over the next few years.


 

About Charles

Charles Hett is Head of Actuarial Services at Deloitte NZ. He is a qualified and experienced actuary and consultant; he has held many executive roles including CFO and Chief Actuary.