Actuarial insurance trends guide

1. 2017
ACTUARIAL
TRENDS

2. DEMAND
FOR HEALTH
ACTUARIES
SKYROCKETS
1 Healthcare actuaries are
predicted to experience an
annual growth rate of 4.5
percent—the highest of all
insurance segments.

3. Recent healthcare reforms, including planned expansions of Medicaid and Medicare, have resulted
in enormous growth in the health industry. In fact, the overall healthcare sector is expected to add
nearly five million jobs through 2022. This makes it the fastest growing service sector nationwide.
Within insurance, the projected addition of 20 to 25 million previously uninsured Americans
combined with an increasingly aging population is leading organizations to clamor for actuarial
talent. More and more actuaries are needed to evaluate the effects of new healthcare laws, develop
new products and assist with pricing.
In addition, the health sector is seeing an increasing need for actuaries with advanced statistical
programming skills.
DEMAND FOR HEALTH ACTUARIES SKYROCKETS
Source: Casualty Actuarial Society; U.S. Bureau of Labor Statistics

4. Technology is evolving at a breakneck pace. Disruptive technology—advances that unexpectedly
displace an established process—is expanding so quickly that each breakthrough is almost
immediately superseded by another. Today, these technological advances stand ready to disrupt
traditional practices within the actuarial profession. Drones and driverless cars are presenting
new liability risks and evolving coverage, and usage-based technology is providing mass data
points for analysis. In order to stay relevant, actuaries must not only keep up with the rapid pace
of change, but embrace it.
DISRUPTION IMPACTS ACTUARIAL ARENA
2

5. 30% of the auto market
is expected to use telematics for the majority of
policy interaction and pricing by 2025.
By 2025, the drone industry
is predicted to create 100,000 jobs and
contribute $82 billion to the economy.
DISRUPTION IMPACTS ACTUARIAL ARENA
Source: Casualty Actuarial Society; Accenture

6. In the wake of the financial crisis and economic recession, the life industry has taken a hard look at their current vulnerabilities and risks. The
realization is that a number of regulations are having a significant impact across all functions. As more and more guidance from regulators
emerges and framework such as Solvency II and PBR develops, organizations are focusing on improving their processes. One of the key outputs is
model validation. Today’s actuaries use models to develop financial information about an insured and provide input into other activities like risk
management, capital planning and regulatory compliance.
As the need for validation increases, actuaries will be tasked with ensuring their models are successfully meeting the goals established when
originally created. All components of the model – including inputs, analytics, outputs and reporting – are now being continually checked.
REGULATIONS LEADING PUSH FOR
MODEL VALIDATION3
Source: KPMG

7. TALENT
OVERLOAD
AT THE
ENTRY
LEVEL
4

8. TALENT OVERLOAD AT THE ENTRY LEVEL
Increasingly, the actuarial field is being touted as a top career choice—boasting a nearly non-existent
unemployment rate and positive employment outlook. In recent years, actuarial unemployment has
wavered between zero and one percent while employment has grown steadily—averaging around three
percent annually.
This growing reputation for employability and job security has resulted in an influx of students and young
professionals looking to join the actuarial profession. The past five years have seen the number of students
participating in actuarial science programs increase by 11 percent. With more individuals wanting to enter
the field than there are employment positions available, nearly 70 percent of graduates will struggle to find
an actuarial position. In fact, only the top 25 to 30 percent of graduates will gain actuarial employment upon
By 2022, actuarial employment is
projected to grow 26 percent.
The number of first-time actuarial
exam candidates is increasing
by 7 percent annually.
Source: U.S. Bureau of Labor Statistics; Society of Actuaries

9. TALENT
GAP
EXPANDS
AT
MID-
LEVELS
5

10. Despite the abundance of talent at the entry-level of the actuarial profession, insurers are feeling a
distinct tightness within the mid-career market. This talent shortage is being driven by an exodus of
actuaries from the workforce, a lack of mid-career level professionals and a skillset mismatch. The
industry continues to see a significant drop-off in the number of actuaries in their mid-to late-30s.
Often, these professionals are being swayed by the rise of highly quantitative—but non-actuarial—
positions available outside of the industry. This exodus toward other data-driven career opportunities
is unlikely to be reversed.
In addition, insurers are looking for a number of non-quantitative skills in their mid-level talent.
Finding professionals with a balanced toolkit of leadership, managerial and communication skills is
continually challenging. This narrowing mid-career market has the potential to have a long-standing
impact on the industry as it may eventually lead to problems filling senior actuarial positions.
TALENT GAP EXPANDS AT MID-LEVELS
Source: The Economist

11. More and more insurers are embracing analytics and big data, recognizing their potential to
contribute to organizational success. Already, 75 percent of industry organizations are using
analytics to give their company a competitive edge. Today, big data and predictive analytics are
beginning to permeate throughout the industry’s day-to-day activities. This rapid growth presents
a unique opportunity for actuaries to expand their capabilities, and share their unique insights
and analysis. They must shift their current techniques to effectively and efficiently respond to the
new era of cheap, fast data.
BIG DATA AND PREDICTIVE
ANALYTICS RISE TO THE TOP
6

12. 57% of organizations
identify big data and predictive analytics as
the most important trend driving the actuarial
profession.
47% of companies
believe that big data is one of the most important
opportunities for actuarial professionals.
Source: Society of Actuaries
BIG DATA AND PREDICTIVE ANALYTICS RISE TO THE TOP

13. Today’s industry landscape is being shaped by increased regulations. Organizations face uncertainty as new rules and regulations are being
introduced with significant impact on how they operate. This evolving regulatory framework is driving new reporting and analysis needs.
Insurers are calling for skilled professionals who are capable of analyzing and monitoring these emerging changes.
With high-level data analysis skills, actuaries are increasingly being relied upon to ensure companies fully comply with regulatory
requirements. In order to meet these challenges and take advantage of this emerging development activity, actuarial professionals need to
look at opportunities to increase their technical skills.
INDUSTRY REGULATIONS
EMERGE AS DRIVING
FORCE
7
50% of organizations
identify increased
regulatory efforts as a
key trend driving the
actuarial profession.
Source: Society of Actuaries
INDUSTRY REGULATIONS EMERGE AS DRIVING FORCE

14. The Jacobson Group delivers actuarial consultants as a timely and cost-effective solution
to all of your temporary needs. As an alternative to traditional actuarial consulting
firms, we provide a value-focused solution for a stopgap during permanent searches or to
complement permanent staff during peak periods or special projects.
Our actuarial recruiters have built a network of credentialed members of the actuarial
community with expertise in a wide variety of disciplines. Leveraging an average of 20
years of experience, hands-on knowledge and proven product line expertise, our actuarial
consultants can quickly step in to address critical business situations, develop strategies
or train existing staff. The depth of our network is what sets us apart from traditional
actuarial consulting firms and allows us to provide clients with the on-demand talent
they need for their specific assignments.
For more information, please contact:
The Jacobson Group
+1 (800) 466-1578
jacobsononline.com
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