Articulating the Actuarial Value Proposition

ne of the most enjoyable experiences during my year as president-elect, and thus far in my presidential term, has been the opportunity to visit with employers of CAS members. A typical employer visit consists of a town hall with the entire actuarial department and a separate smaller meeting with the actuarial leadership team. The town hall includes a CAS update presentation, followed by a usually lively Q&A session, while the actuarial leadership meeting focuses on topics of concern to management, industry trends, and the CAS/employer relationship. These conversations provide valuable opportunities for us to hear what the CAS is doing well, how we can improve, and how we may be able to provide additional value to the employer community.

In one conversation with the actuarial leadership team of a large employer of CAS members, the chief actuary shared that he was challenged during every budget cycle on the number of actuaries on staff, the cost of exams, membership dues, attendance at educational conferences, etc., and noted it would be helpful if the CAS had anything in the way of data or supporting materials that would demonstrate the value of employing actuaries. This resonated with me because I was similarly challenged by my CFO during my tenure as chief actuary (and previously as chief risk officer, though not specific to actuaries in that case). In subsequent employer visits, I posed this question to actuarial leaders, and they nearly all agreed this was an ongoing challenge for them. I’ve given this some thought (and consulted a couple of AI tools) and believe the actuarial value proposition is quite strong and can be viewed across five dimensions.

Business leaders make critical decisions in an environment shaped by volatility — economic cycles, regulatory shifts, demographic change, and emerging risks. Actuaries turn that uncertainty into decision-ready, financially grounded insight. The result is:

• Better pricing and profitability decisions.
• More accurate forecasts.
• Stronger capital allocation.
• Fewer surprises.

In short, actuaries give executives the confidence to act decisively when the future is anything but certain.

Actuaries help build and validate the financial foundations that keep organizations resilient, solvent, and competitive. They equip leadership teams to:

• Maintain adequate reserves.
• Optimize capital requirements.
• Reduce earnings volatility.
• Strengthen balance sheet resilience.

In short, actuaries safeguard the organization’s financial backbone.

Actuaries operate under rigorous professional standards — education, ethics, continuing professional development, and disciplinary oversight. For executives, that translates into:

• Advice they can trust.
• Independent, objective analysis.
• Decisions backed by a globally recognized profession.

That credibility carries weight with regulators, auditors, boards, and rating agencies.

Modern actuaries are far more than technical specialists. They are cross functional business partners who help shape enterprise level strategy. Executives rely on them for:

• Mergers and acquisitions due diligence.
• Product strategy.
• Risk appetite and governance.
• Investment and asset liability management.
• Scenario planning and stress testing.

They help leadership teams see around corners and act before others do.

Organizations that understand risk better than their competitors consistently outperform. Actuaries provide the intelligence to support and understand:

• Predictive modeling.
• Behavioral insights.
• Market and demographic trend analysis.
• Early warning indicators.

This enables executives to act proactively rather than to react defensively.

Taken together, these five dimensions make a compelling case. Actuaries do far more than support technical insurance functions; they strengthen decision quality, financial resilience, and strategic execution across the enterprise. That reality reflects the breadth and depth of the CAS syllabus, the relevance of continuing education, and the preparedness of CAS members to solve complex business problems well beyond pricing, reserving, and capital modeling. In fact, I can think of no other profession or discipline with a comparable degree of versatility. That is why it is important for actuarial leaders to clearly articulate the actuarial value proposition and to defend related staffing levels and expense budgets.

Staff functions are generally under greater budget pressure than customer-facing and market-facing teams. Because actuaries are well compensated, it is not surprising that their staffing and expenses come under scrutiny from time to time. That said, actuarial compensation is market driven and represents an objective measure of the value actuaries bring to an organization. The real issue, then, may be less about how many actuaries an organization employs and more about how they are being used. If actuarial departments do not keep evolving by adopting new technologies, improving efficiency, and shifting capacity to visible, value-added work, CFOs will reasonably expect the required number of actuaries to level off or decline over time.

Actuaries have become indispensable in the traditional insurance functions of pricing, reserving, and capital modeling, so the challenge and opportunity is to make ourselves equally indispensable in other critical areas — strategic planning, claims, underwriting, product development, compliance, risk management, operations, business development, and more. There are many examples of actuaries providing significant value in these areas, but unfortunately, actuaries in these areas are the exception and not the norm. In my experience, once a nonactuarial function has had the benefit of having an actuary on their team, they are loath to give up that capability, so perhaps the opportunity lies in getting more actuaries engaged in nontraditional business areas.

What is an actuarial leader to do when challenged on staffing levels and expense budgets, particularly in the face of AI and rising expectations for gains in both efficiency and analytical capability? My first observation is that once the question has been asked and expense reduction targets have been set, it is often too late to avoid the challenge. The better approach is to be proactive by taking a long-term view of staffing and expenses and acting deliberately to demonstrate the actuarial value proposition.

One essential part of that approach is consistently communicating the work actuaries are doing and the value they are creating across these dimensions, while highlighting and recognizing significant contributions whenever possible. Wins in market-facing and customer-facing business units are rightly celebrated, but the enabling achievements of staff functions often receive far less visibility. Creating opportunities for recognition of actuarial accomplishments achieves two important things: It strengthens engagement within the actuarial team, and it reinforces to leadership the distinctive value actuaries bring to the enterprise.

Equally important is the need to challenge yourself and your team to drive as much efficiency as possible within the actuarial function and to make whatever organizational changes are needed to reflect those gains. This may, and likely should, lead to reduced staffing in some areas. But the key is to have already identified where that capacity can be redeployed to higher-value work that is visible, strategically important, and worthy of recognition.

This “disrupt or be disrupted” mindset helps develop talent, energize the team, and avoid the appearance of defending the status quo by simply preserving actuarial budgets. The rapid evolution of AI only increases the urgency of adopting this approach. Actuarial leaders should be working with their teams to apply new technologies in practical ways, automating routine tasks, accelerating analysis, and freeing capacity for deeper insight and broader business impact. The opportunity is not merely to do the same work faster, but to redirect actuarial talent toward areas of greater strategic importance. For its part, the CAS is providing AI-related resources to help members understand AI and how to use these powerful tools (see https://www.casact.org/publications-research/research/ai-tools-and-resources).

Another powerful tool is sharing the wealth. Look for opportunities to place actuaries in other business functions where they can add value, even if they remain on the actuarial function payroll for a period. This facilitates the expansion of actuarial influence, generates business and organizational insights for the actuarial function, provides invaluable cross-training opportunities, and further demonstrates the value of actuarial capabilities across the organization.

Finally, a long-term view of staffing and expenses also requires recognizing that there will be times when a temporary step backward is necessary to enable future progress, especially when an organization is under meaningful budget pressure and every function is affected. In those moments, acting as part of the broader enterprise and sharing in the financial discipline of the organization can be just as important as protecting your own budget and team in the short term. Maintain the long-term focus, continue looking for ways the actuarial function can add value, and when the time comes to invest in talent again, actuaries should be at the top of the list.

The next time actuarial leaders want to know how the CAS can help them in articulating the actuarial value proposition, I will have a better answer for them!