President's Message - It's a Small World

Following is Academy President Ken Hohman's President's Message as published in the July-August, 2010 issue of the Academy's bimonthly magazine, Contingencies

Ken Hohman
THERE HAVE BEEN TIMES throughout our country's history when our nation's foreign policy revolved around the notion of keeping ourselves to ourselves. The difficulty with that isolationist outlook, as we discovered time and again, was that it served nobody's interests well, least of all ours. Like it or not, our nation's well-being was tied to the well-being of other nations.

The same is also true for the U.S. actuarial profession. While some U.S. actuaries may think that an interest in international actuarial activity is only for folks who do international work (or work that has international implications), I disagree.

As we have seen in the current recession, the U.S. economy is more intertwined with the economies of other countries than ever. What happens in Greece affects us all. At the same time, many U.S. actuaries now work for companies that are owned by foreign parent entities or have extensive international connections. The implications are various. As the businesses we work for grow in international scope and outreach, international accounting standards will become increasingly important, if not imperative, to U.S. actuaries. European concepts in the solvency regulation of insurers will affect U.S. insurance regulation.

As a further example, the hot topic at the most recent IAA meeting was the proposed establishment of international actuarial standards of practice. As the home of the U.S. Actuarial Standards Board (ASB), the Academy is working hard to ensure that model standards developed by the IAA are (a) principle-based, (b) sufficiently broad to serve a range of cultures and legal systems, and most importantly (c) will not supersede standards promulgated by the ASB or any other actuarial standard setting organization. While the concept of convergence of actuarial standards around the world is laudable, it must be pursued carefully and recognize the different environment of each national actuarial organization.

At the same time, there's a personal benefit of another kind that comes from being involved in international matters. While we may be separated by distance, currency, type of government, and political and legal systems, actuaries around the world face many of the same professional challenges. I find myself with a greater appreciation of this in the wake of my attendance at this year's International Congress of Actuaries (ICA) meeting in South Africa. While the IAA meets two times a year and focuses on the actions of working groups and committees, the ICA's quadrennial meetings are more oriented around continuing education, sharing information, and networking. This was my first ICA meeting, and it was exciting to get to meet just a fraction of the nearly 1600 actuaries from around the world who attended the 35 educational sessions at the Congress. But the learning doesn't stop when the sessions end. The hallway and dinner conversations about how one country has addressed issues and challenges we are now facing is always enlightening.

This mirrors the benefits I've discovered, albeit on a smaller scale, at meetings of the North American Actuarial Council (NAAC). Composed of leaders in the Canadian, U.S., and Mexican actuarial organizations, NAAC is a forum for developing a coordinated vision of the future direction of the actuarial profession in North America and to discuss international issues from a North American perspective. Recent fruits of this collaboration include the development of a comprehensive actuarial search engine [1], that encompasses all the NAAC member websites, the profession-wide distribution of the Academy's TRACE CE tracking tool, and ongoing work on a tri-country cross-border agreement on discipline.

It's a big world out there. But we can make it that much smaller by staying engaged through the profession we serve.