The last year provided all too many opportunities for actuaries to reflect on their career paths. Today, much like innovators and entrepreneurs, a successful actuary must have savvy business skills.
I met with James Dunseth, ASA, who recently decided to pursue an MBA at the Yale School of Management on a full-time basis starting in September 2021. Like James, many actuaries have considered getting an MBA in addition to ASA or FSA at some point in their careers. Read on to see what motivated James to take this path.
What sparked your interest in getting an MBA as a full-time actuarial professional who was doing well at his job?
I attended a session on artificial intelligence (AI) at Singularity University in 2019. The speaker, Nathana Sharma, described AI as having three stages:
- Weak/narrow AI—an algorithm or model that can get really good at doing one thing (where we are today).
- General/strong AI—an algorithm or model that can do multiple things (e.g., beat a person at both chess and checkers).
- Super AI—full-blown AI (e.g., Ultron from The Avengers).
While it’s unclear how quickly we’ll move into the second or third stages of AI, what is clear to me is that I can’t expect to rely on any particular skill to keep me relevant in the workforce because it will eventually be replicated by AI. Instead, I see the importance of cultivating human capabilities, such as conceptual thinking, emotional intelligence, resilience and leadership, that are irreplaceable by an algorithm. MBA programs are particularly good at developing students in these areas.
Another reason I want to pursue an MBA is to “speak the language” of the C-suite. As an actuary for a consulting firm, the chief actuary is often a key stakeholder for my projects. However, to truly deliver value to the client, the needs of other stakeholders (e.g., CFO, CEO, COO) must be considered. An MBA will both help me understand the perspectives of these leaders and also be an indicator to them that I have this common understanding.
Lastly, while writing my business school essays, I glanced back at the essays I wrote to apply to college when I was 17 years old. The first sentence of one of my essays was: “I plan to pursue a degree in the actuarial science field, followed by an MBA.” I have always had the personal goal to obtain a master’s degree, and my ambition continued to grow after I entered the workforce and could see the direct benefits.
With your solid actuarial experience, how do you think, as an actuary, you have a “leg up” compared to other candidates of the MBA program?
Most MBA programs are looking for applicants who have an analytical mindset. Harvard Business School’s website says its program depends on students “who can assess, analyze and act upon complex information.” Performing analysis and making decisions based on the analysis should be a major component of most actuaries’ jobs, so this should be an advantage to an actuarial applicant.
Additionally, MBA programs strive for a diverse student body, and area of expertise is one dimension of diversity. Actuaries bring a unique perspective on risk through their proficiency in identifying, quantifying and developing mitigation strategies for risk. While many actuaries are focused on risk in the insurance industry, the risk framework likely can be applied to other industries and sectors.
You mentioned you want to learn how to speak the language of the C-suite. What are additional valuable skills and knowledge you think you will bring back to the actuarial realm after getting your MBA?
In addition to what I’ve already mentioned, I expect that an MBA will give me a holistic understanding of business principles and a deep understanding of business models. Being able to better understand what business outcomes are most important to the organization can help actuaries develop more valuable solutions, predict what types of analysis stakeholders are interested in and be better prepared to work in other industries.
I also plan to take classes and leverage university resources around entrepreneurship. It’s a personal interest of mine, but the associated mindset around innovation and design thinking is something that can be powerful whether starting a business or creating a culture of outside-the-box thinking in a large established organization.
What other professions did you consider pursuing when you were younger, and what can actuaries learn from these professions?
During my freshman and sophomore years of college, I took a theoretical math track, which most of the other students combined with physics to pursue careers in research, academia or engineering. The courses started with the basic properties of numbers and sought to prove propositions and theorems across calculus, topology and real analysis. I also heard that law schools favored students from this program since students learned how to rigorously defend a position using logical reasoning and problem-solving. Applying a similarly rigorous step-by-step approach could benefit actuaries when developing SOX controls, explaining earnings movement in a sources of earnings (SOE) analysis or performing model validation procedures.
Do you have any advice for actuaries who are planning to pursue an MBA, or someone who is deciding between an actuarial career and a related finance profession?
I have a couple of pieces of advice for actuaries who want to pursue an MBA. First, make sure you have a clear story that is unique and personal for why you want to get an MBA. These programs are time-consuming and expensive, so you need to make sure that this is the right next step in your career. Moreover, admissions committees look for unique applicants who they think will be successful in their program, so they are likely to reject an applicant whose story isn’t compelling. There are many books and online resources that have essays and personal statements from past applicants, which can give you a sense for what types of stories are successful.
Second, talk to as many current students, alumni and school representatives (e.g., admissions, ambassadors) as possible, whether they are from the programs to which you are applying or not. The application process is challenging, and it’s difficult to thoroughly understand a particular program or application via the school website and online forums. The application tips and program insights obtained from these conversations are an invaluable part of identifying the right school for you and putting together an application that will stand out.
Statements of fact and opinions expressed herein are those of the individual authors and are not necessarily those of the Society of Actuaries or the respective authors’ employers.
Copyright © 2021 by the Society of Actuaries, Schaumburg, Illinois.