Welcome

Actuaries Seek Minority Candidates to Reflect Changing America

Oct. 19, 2021, 8:46 AM

Paving a path for minority actuaries needs to start as early as elementary school to tackle long-standing racial disparities within the industry.

Actuaries, who help companies assess and plan for financial risks, are overwhelmingly white. More than 60% of new entrants in 2020 were White and only 15% were Black, Hispanic, or American Indian, according to data from the Society of Actuaries. Recognizing the industry doesn’t adequately reflect changing U.S. demographics, actuarial associations and schools are offering new incentives to pursue the profession and targeting students before they hit college to recruit minority applicants.

“The pipeline really begins as early on as possible because most people who become actuaries were people who were excited by math and statistics and other STEM fields. We know that a lot of that talent and passion starts with being encouraged during your K-12 years,” said Mallika Bender, the diversity, equity, & inclusion staff actuary at the Casualty Actuarial Society.

“So the need to start preparing specifically for an actuarial career earlier on has become more important. That means you have to know what an actuary is and that this is a possibility for you early on.”

Leaders of the actuarial industry intend on fixing the entry pipeline to level the hiring playing field for the best candidates, regardless of race, improving decision-making through a diverse workforce, and strengthen the profession overall. Tackling the gap requires collaboration from actuarial professional groups, the schools that teach rising actuaries, and the firms that could potentially hire them.

“It doesn’t make a ton of sense for employers to go to high schools alone, and universities working with high schools alone misses the connection to the employers. Then you’ll need the trade groups that lead these two entities to each other. All those groups working together is pretty valuable,” said Patrick Wolfe, the Frederick L. Hovde dean of science at Purdue University.

University Outreach

Morgan State University, the only historically Black college and university with an actuarial science program, plans to launch a certificate program in early 2022 that would also be open to other HBCU students.

“It’s a program that is aimed at getting students a certificate in actuarial science, so it’s not going to be a degree program, but it’ll help the students with the first three exams and get through that process,” said Tim Luedtke, who advises Morgan State University’s actuarial science program.

The university’s Summer Academy of Actuarial and Mathematical Sciences also promotes the actuarial profession, Luedtke said.

Stefanos Orfanos, the director of the undergraduate actuarial science program at Georgia State University, said the scarcity of actuary programs across the South also contributes to the racial disparity in the pipeline. The majority of schools are in the Northeast and the Midwest, according to an SOA list.

“If you’re in Nebraska or Iowa, even if you want to support diversity and you want to enroll those students, it’s harder to find them,” he said.

Recruitment Revamp

After recruiting minority applicants in their early schooling, the companies that hire potential actuaries must push universities for more diverse graduates.

“Nationwide, the aim for universities is to produce outstanding graduates and we look to our employer bases across all the sectors in the U.S. as to where graduates are in demand,” said Wolfe.

“So, if companies continue to say to schools, ‘Hey, help us diversify this pipeline because this is really important to us and we want to be able to hire from a very broad and diverse group of outstanding graduates,’ I think that’s the most effective place for companies to focus.”

Firms like Mercer are also expanding their outreach past typical actuarial science programs to schools with a focus on science, technology, engineering, and mathematics , said Nicole Commons, the U.S. wealth office business leader at Mercer in Washington, D.C., and Baltimore.

“We had to ask where are we recruiting and how are we recruiting there? We couldn’t just look at people with actuarial degrees because there just aren’t enough schools to give us enough candidates. So we’re looking broader at majors like mathematics, economics, and finance to be an actuary,” she said.

“The mathematical aptitude is a real requirement of the job, so you don’t have to have an actuarial degree from college in order to do the job.”

Although there are racial disparities in the sciences, Black, Hispanic, Asian, and American Indian people make up a little over 30% of the profession, according to data from Pew Research.

In addition to recruitment changes, current actuaries can also be mentors for students of all ages who might not see diverse role models in the field, Orfanos added.

Follow the Leader

The Casualty Actuarial Society is working with other STEM organizations to introduce them to the actuarial field and diversify the pipeline, Bender said.

“We don’t want to reinvent the wheel. We want to learn from and leverage what other organizations are doing and use it to uplift diversity within the actuarial profession, get access to students from underrepresented backgrounds, get them excited, and help them find the resources that they need to succeed,” she said.

Bender added that roughly 2% of Casualty Actuarial Society members identify as Black, and a similar percentage as Hispanic or Latino.

“We’re working on increasing awareness of the profession among those groups. I believe that those other barriers to entry—financial support, lack of role models, access to opportunities, and addressing bias and hiring—there’s just more that we can do and are trying to do in those to address those barriers to entry.”

To contact the reporter on this story: Ayanna Alexander in Washington at aalexander@bloomberglaw.com

To contact the editors responsible for this story: Andrew Childers at achilders@bloomberglaw.com; Meghashyam Mali at mmali@bloombergindustry.com

To read more articles log in.

Learn more about a Bloomberg Law subscription.