Mind the gap.

Cherag Kalapesi offers insights for those considering a move into a different practice area.

The demand for actuaries within certain practice areas is a function of a variety of socio-economic and legislative factors. An actuary’s ability to promote his or her own value is also a key determinant. In continuously evolving markets, we must adapt our skills and expertise to fit.

Some traditional actuarial practice areas are clearly in decline, while others are just taking off. For a profession the Home Office has deemed as being in short supply, it would make sense for the excess capacity from one area to feed the demand within another. However, this has generally not happened.

A slap on the wrist

It is surprising how many people are keen to work in a different practice area without having thought about what this actually entails.

Let me give you an example. In the investment and finance markets there are no specific roles for actuaries due to regulatory requirements. As a result it employs a range of professionals with financial and mathematical ability. It could be argued that actuarial candidates are the most intellectually prepared to work in this area, more so than the statisticians, the economists and the (dare I say) accountants. However, in my experience actuaries consistently had the least awareness of the types of roles that were available and the skills and experience that were required to successfully land these roles. This lack of awareness leads to the placing of far more non-actuarial people in these jobs.

While this example may be fairly specific, it highlights a common problem actuaries face in considering different practice areas as potential career paths. Could it be that we are so focused on studying for exams, sitting exams and then re-sitting exams that we lose sight of the other equally important work-based factors which employers look for when hiring someone? The reality is that doing Subject 401 and specialising in Investment Management is by no means a ticket to working as an investment consultant or equity analyst. In fact, no matter what you specialise in, without the relevant experience and a thorough understanding of the products and legislation it will be very difficult to steer your career in the direction you would like.

An Institute Initiative

The Actuarial Profession now recognises this issue. At a recent Institute meeting for the 2005 Education Strategy, a key point of discussion was the drive to develop the practical aspects of a student’s training.

The introduction of a “Work-based Skills” component to the qualification process aims to “encourage young professionals to develop a culture of professional development to help them plan their future as an actuary”. With the proposed introduction of a more comprehensive work log, the Institute is shifting students’ attentions away from just passing exams and encouraging them to be far more aware of the work experience they are gaining.

While this may prove to be an administrative hurdle for many employers, it will surely change the mind-set of students as they progress through the early stages of their career. By encouraging people to think more about work-based skills, it will in turn help students understand the expectations of employers when they are applying for jobs in different practice areas.

Enticing Employers

It seems obvious that employers, when looking to hire somebody will have a preference for people with relevant experience. The time and resources taken to train up a new employee represents a very real commercial cost. But as actuaries themselves, employers will often be open to considering strong applicants (who don’t have relevant experience) if they can demonstrate potential and market awareness.

Employers want people who show initiative and have an understanding of their business. So focus on how they could benefit from your experience, even though it may not be directly relevant. Think of the key skills you have developed throughout your career and match this with the key skills required to be successful in the new area you are considering. Look for an overlap of competencies such as modelling and systems experience, client/team/project management skills, and business development skills. Proactively selling your abilities is critical in most interview situations, but even more so when you are looking to change practice areas.

And Finally

While it may be getting more difficult, and while it may be happening less frequently, people still manage to change practice areas throughout various stages of their career. A combination of awareness, persistence and initiative will allow you to successfully manoeuvre yourself into the area of choice.

Cherag Kalapesi AIAA is a senior consultant with Acumen Resources, the specialist actuarial recruitment company.