What It Takes to Be an Actuarial Trainer
by Sam Gutterman
Reprinted from the November/December 2007 issue of Contingencies, published by the American Academy of Actuaries.
A friend told me the other day that she uses a personal trainer to keep in shape. I asked her why she needs one, wondering why her type-A personality wouldn’t be able to motivate her to work out on her own physical fitness program. She admitted that, although she’s a member of a local health club and uses it every once in a while, she finds it difficult to motivate herself to push herself hard enough to suit her objectives. She told me that her trainer pushes her to her physical limits and sometimes beyond them. She claimed that her self-motivation simply isn’t that strong, she needs help to stay fit, and it’s worth the extra cost of having a personal trainer.
This made me think about what an actuarial trainer would be like. To whom would such a person be helpful? The more I thought about it, the more convinced I became that I could visualize such a position, forcing and helping an individual or a company to take proactive action, rather than wasting a lot of time studying every single issue to death, strategic or otherwise.
To begin with, an actuarial trainer would have to inventory the financial needs and weaknesses of his client (just like an actuary conducting an enterprise risk management inventory of a company). The inventory would also include the strengths that might be further built up and taken advantage of.
To be successful, actuarial trainers must have good time management skills to make the best use of their and their clients’ limited time. The training program would have to be tailored to fit the clients’ needs, and there would have to be agreement in advance on the program’s objectives. It’s a team effort.
If you’ve ever seen a personal trainer in action, he’s likely to show passion in his communication regarding his work (sometimes to the extreme of sounding like a drill sergeant), demanding that his client follow his recommendations. This might somewhat overstate the need for showing emotions in a fully transparent manner, yet belief in the usefulness of actuarial principles and clear communication skills would certainly be important for any actuarial trainer.
Pushing his client to his limits is an important trainer characteristic. If there is a need to take well-reasoned action, do it, and don’t study it to death. Use adaptive strategies in a dynamic mode, in consideration of the client’s needs; one size does not fit all.
An actuarial trainer can’t make things too complicated; simple approaches and solutions will often be better. The simpler and more straightforward the message, the more likely the trainer’s client will heed his advice and sometimes even apply it after the trainer has left.
These general approaches to problem-solving and working as an actuarial trainer might be useful for a number of applications—to individuals, companies, or a wide range of audiences.
Come to think of it, after looking over this description of a potential actuarial trainer, it doesn’t turn out to be much different from the approach every actuary needs to apply every day. Maybe we all are, should be, actuarial trainers.
Sam Gutterman is director and consulting actuary with PricewaterhouseCoopers LLP in Chicago.