From time to time, the Society of Actuaries (SOA) receives queries, mostly from candidates, about why we make such frequent changes to the education system. Although we understand some of the frustration, our response to why we make changes is simple: because we must.
Broadly, the role of professional education is to develop and deliver a credential that provides a demonstration of mastery of the core knowledge necessary for that profession. This is true for the SOA, but also for any other professional educator—this kind of credentialing is the underpinning of any profession.
The core knowledge changes in subtle—and not so subtle—ways over time, and as a result our curriculum must always remain current and relevant to the needs of the profession’s main stakeholders: candidates, members, employers, regulators and the public. When regulations change or new techniques are introduced, the credentialing process must reflect those modifications to maintain its relevancy.
Most curriculum changes are incremental and are done in the annual curriculum reviews. Some are more substantial and may require specialized, standalone exams to assess mastery. As an example, the SOA recently added content to the curriculum to introduce and assess predictive analytics techniques. Prior to that, the last substantive change was the addition of a comprehensive set of content related to oral and written communication skills, and before that, financial economics. The tricky part is often deciding what content should be retired to accommodate the new material.
Staying Current and Relevant
Consider also the realms in which the SOA credential must remain current and relevant—from within the traditional practice areas of life, health, general insurance and pensions to areas such as finance, enterprise risk management and investments. Plus, with rapid growth in markets outside of North America, in dozens of countries around the world, the credential must have worldwide applicability.
Due to our deep U.S. and Canadian roots, we have U.S.- and Canada-specific curricula for all four traditional practice areas, but candidates who live or work outside of those jurisdictions have always had to either choose a non-nation-specific track (Finance/ERM or Quantitative Finance and Investment) to fellowship or learn the intricacies of the regulatory environments for the traditional practice areas in either Canada or the United States in order to complete their FSA within their chosen track. If a candidate works in life insurance in Singapore, for example, he or she will receive educational materials and assessments that are current but are not necessarily fully relevant to his or her work context. As the SOA’s membership has expanded globally, the need to develop and maintain relevancy in a wider array of work environments has created real challenges for the SOA.
To determine the best way of addressing these challenges for the long term, the SOA formed an Adapting Education to International Markets Task Force and asked it to conduct research and make recommendations to the SOA Board of Directors. The task force first investigated the steps the SOA had taken in the past to address the question of relevancy. They investigated the recent development of a Canada-specific health curriculum and the creation of bespoke taxation and regulation modules in the life track for Taiwan and Hong Kong as examples of adapting SOA education to international markets.
They commissioned research into the kinds of adaptations that other global professional educators have adopted and paid close attention to where educational institutions used other languages. The task force also conducted a survey of candidates, members and employers on their attitudes to adapting SOA education to different environments, and they conducted a series of interviews with stakeholders from China, Hong Kong, South Korea, Thailand, Colombia and Mexico.
Some of the findings from the studies, surveys and interviews surprised many on the task force. Most task force members had assumed the research would confirm the SOA should offer its exams in a range of languages. Instead, the vast majority of those interviewed in all of the countries listed stressed the importance of only offering exams in English to maintain the prestige and high market value of the SOA’s credentials. This view was reinforced by market research where providers of the CFA and FRM credentials had made conscious decisions to maintain their world-class credentials in English.
Other findings supported the task force’s early assumptions. For example, there was clear and consistent feedback from international stakeholders of the importance of adding material on the International Financial Reporting Standards (IFRS) and solvency standards. Interestingly, those interviewed and surveyed felt strongly that the U.S. content should not be removed to accommodate this new material, and they recommended the SOA present the different financial reporting and solvency standard systems in a manner that would enable candidates to compare and contrast different approaches.
Reaching a Consensus
Once the task force had synthesized all of this feedback and agreed on a recommendation, it interviewed 16 of the top 20 actuarial employers, representing insurance and consulting companies with global and domestic business from four different countries, to assess their level of agreement with the recommendations. The task force found overwhelming support for their recommended approach, including the addition of international content for all candidates.
A thoroughly researched and stakeholder-supported set of recommendations was presented to the SOA Board in March 2018. These recommendations included:
- Proposed changes to the SOA’s Principles for Prequalification Education, which emphasized providing globally relevant education that allows for mobility in the global workplace and the ability to practice in specific jurisdictions, particularly in the United States and Canada.
- A commitment that the SOA will provide prequalification exams only in English, except where required by law and sufficient demand exists. (This commitment allows for delivery of certain types of local content in local languages in FSA track-specific e-Learning modules, but only as additional material to the core that all candidates receive.)
- A commitment to offer professional development in local languages, where possible, in conjunction with the local actuarial association.
- The addition of international content on topics like IFRS and solvency standards in the prequalification curriculum, particularly in the Fundamentals of Actuarial Practice (FAP) course and within FSA tracks (largely through the use of e-Learning modules as opposed to exams).
The Board approved the recommendations, and SOA staff and volunteers are already planning their implementation. The first milestone of these changes will be the launch of an overhauled FAP course in 2020, and changes to all the FSA tracks will quickly follow.
The evolution of the SOA’s education continues, as it must.