A Pathway to “Chief” Success

A Pathway to “Chief” Success

A Pathway to “Chief” Success

By: Kieran Welsh-Phillips, Senior Recruiter

The role of Chief Actuary or Chief Risk Officer (CRO) is a career goal for some, but how does one actually get there? It’s a tough question to answer, as both roles vary widely depending on a number of factors, including the type
of company and the size of its Actuarial and/or Risk Management Departments. To gain greater insight and perspectiveon this subject, I spoke with Tim Pratt, FIAA, FCAS, Chief Actuary with Liberty International Underwriters (LIU); Steve Keshner, FSA, Chief Actuary of Spring Consulting; and T. Scott Mackenzie, FSA, former CRO with ING and now CEO of TOP Risk Advisors. Surprisingly, what Pratt, Keshner and Mackenzie all have in common is that none of them set out to be either a Chief Actuary or Chief Risk Officer at the start of their career. Pratt, who had a strong interest in math in high school, was awarded a college scholarship to pursue actuarial studies, and continued along the career path upon graduation. Keshner’s goal as an actuary was “to be in a strategic role and be involved in the heart of the business in which I work,” which ultimately played out to be his current Chief Actuary role. Mackenzie became an actuary because he thought it would be an interesting career opportunity combining his interests in math and business. Early in his career, the Chief Risk Officer role did not yet exist, but Mackenzie was “fortunate enough to have enjoyed various experiences within the industry…that lead naturally to the CRO role.”

Communication Know-How
In reviewing the details of some of our most recent Chief Actuary searches, the most commonly sought-after trait, aside from a well rounded actuarial skillset, is communication savvy. Math and technical skills comprised the majority of the first 10 years of Pratt’s career. After that, he said, “You stop doing the more technical work yourself and get other people to do it for you. Your role as Chief Actuary is more to communicate with other people, manage them and motivate them.” The ability to connect with individuals across all levels and areas is key for both a Chief Actuary and a CRO. “It’s extremely important for the CRO to be able to empathize with others in the organization,” Mackenzie added. To further Mackenzie’s point, Keshner said, “People have to see you as a peer. Given the nature of the position, they have to see the Chief Actuary as someone who will stand up for what they believe in and be trustworthy. It’s the way you comport yourself every single day.”

Big-Picture Thinking
The Chief Risk Officer, according to Mackenzie, must, “have an ability to see the forest from the trees.” While the experience in technical analysis associated with risk management is important, Mackenzie said a CRO must be able to look at a company as a whole as well as beyond itself. A CRO must think holistically about a company, and therefore needs a broad background and knowledge base. The more variety one has in his or her professional experience, he added, the better suited he or she is to understand how specific events affect the enterprise.

Likewise, Pratt concurred: “A Chief Actuary needs to be a jack of all trades. I think you have to be pretty knowledgeable about everything, but not overly specialized in any one single area. The Chief Actuary’s experience needs to be broad based.” Pratt added that a Chief Actuary needs to have a solid, comprehensive understanding of what is going on within the company. “You have to have an appreciation for what’s going on, but also a bigger appreciation for the downstream impact of that,” he said. “You have to know the implications and the risk. At the core of the Chief Actuary role is explaining what the actual risk is to upper management.”

Thinking Outside of the Box

Strategic thinking is a skill set required of both leadership roles. Mackenzie’s role as CRO was to “help the business leaders understand and appreciate the potential long-term consequences of a top-line approach to the business.” This entails thinking of new ways of doing business. At LIU, Pratt manages approximately 75 actuaries, the majority of these reports indirectly. In managing this group, it is his responsibility to ask, “Are we getting the right actuaries that we need? Are they exuding the right skills? Are they doing the right work? Are the qualities that we’re trying to have in our actuaries uniform across the group?” Keshner added that most Chief Actuaries do not report to an actuary, so these individuals need to be able to relate to other leaders outside of the actuarial realm. Creative and innovative thinking is another key trait. “You have put yourself in a position where people go in and think of you as a business partner and not just a technical actuary,” Keshner said.

International Edge
Gaining international experience, too, can be helpful in progressing toward a Chief Actuary or Chief Risk Officer post. A native Australian now living in the U.S., Pratt finds it comes easily to him to talk with people from different backgrounds, countries, upbringings, educational systems and the like. It gives one a competitive edge to know where people are coming from. “International political events can have a big impact on the operations of international companies, but may also have a contagion effect on the operations of a regional U.S. company,” Mackenzie said. “Being able to see and understand these potential dominos is an important attribute for the CRO.”

Seeking Out Opportunity
Mackenzie advises that those who are interested in pursuing these  two types of Chief roles should “seek opportunities to grow and not be trapped on one path of the organization.” “Constantly look for opportunities to learn,” Keshner concurred. “Take on projects and be proactive. If you’re a pricing actuary, learn about valuation and vice versa.” He also noted that if you are in a position to hire, do not be afraid to hire the best people you can find, i.e. your potential replacement. This will give you room and incentive to move forward with your career and broaden your own skillset. Finally, when asked about career advice and how to deal with setbacks, Pratt offered the following: “No one will have the perfect career progression. You run into different people, you learn how to deal with them, you learn how to manage them, and you turn it into a development opportunity.”

 

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