A 2020 Commencement Speech from Michael Bean FSA, FCAS, FCIA, CERA, Ph.D.
One’s senior year of college is often bittersweet. It is a time of tremendous excitement, when one looks forward with hope and anticipation to beginning one’s career, taking on new responsibilities, and meeting new people. However, it is also a time of reflection and perhaps a bit of sadness, when one realizes that this phase of one’s life will soon be over and the many friends and acquaintances one has made during the past few years will soon be going their separate ways.
I am sure that many of you felt this way when you started the school year back in the fall. I’m also pretty sure that none of you would ever have imagined that your senior year would end the way it did, with classes cut short, graduation ceremonies canceled, and job opportunities disappearing faster than at any time in living memory. This is not what you – or anyone else – would have expected just a few short months ago.
Actuaries are in the business of uncertainty, specifically, understanding the financial consequences of future uncertain events. As actuarial students, you will have learned about probabilities and distributions, and the difference between expected values and extreme values. You will have learned that probabilities provide a measure of how likely various outcomes are, but these measures are only as good as the assumptions and data that go into deriving them. As painful as the past few months have been, you have just gone through a real-life demonstration that the expected value is not necessarily what you should expect, and the extreme value may not be as improbable as it seems. This is a valuable lesson to learn, in both business and life.
When we look at successful people, it is tempting to think that their careers – and lives – followed a straight line, with one success leading to another. However, this is rarely the case. Most successful people – and companies – experience setbacks from time to time. Sometimes these setbacks are the result of their own decisions, but more often they are the result of what economists refer to as exogenous events, or what people who are not economists might just call plain old bad luck. The thing that distinguishes the people and companies that are most successful is their ability to pick themselves up after falling down, embrace change, and seize the opportunities that come their way, even if that means going in a direction that would have been unimaginable just a few short years earlier.
The actuarial field is undergoing tremendous change. Many of the things that actuaries traditionally learned and were tested on are becoming obsolete. At the same time, whole new areas of work – and with them new jobs and opportunities – are emerging. Among the most exciting of these new areas are the fields of data science, predictive analytics, and machine learning, fields that barely existed just a few short years ago. Whatever path your career takes – traditional employment at an insurance company, nontraditional employment at a data analytics firm, or somewhere else – be assured that your actuarial training is valuable. However, to make the most of it, you will need to keep up to date and be prepared to seize new opportunities as they come along.
This year marks the 75th anniversary of the end of the Second World War, a conflict that killed many millions of people, left Europe’s historic cities in ruins, and ushered in the nuclear age, when complete destruction of life on this planet as a result of a nuclear war was not unthinkable. To a young person at the time, the future would have looked very uncertain and frightening. Yet, the years following the Second World War turned out to be prosperous and full of opportunity. However, that prosperity was not assured. It came from hard work and seizing opportunities as they arose.
This year also marks the 31st anniversary of the fall of the Berlin Wall and the end of communism in Eastern Europe. People who for decades had been denied the freedom to leave their own countries – that’s what the purpose of the Berlin Wall was, to prevent people in the East from leaving – were finally able to visit the West without fear of violence or imprisonment. It was a time of tremendous excitement, but also trepidation. Would the Soviet Union allow what it called glasnost (openness) to continue, or would Soviet tanks soon move in to “restore order”, as they had done in Hungary and Czechoslovakia decades earlier? No one knew for sure. Of course, we know how the story ended: Germany was reunited, its eastern neighbors were set free, and Berlin was rebuilt and has become one of the most exciting cities in Europe. However, once again, nothing was assured.
Today, you enter a world that is much different from the one that seemed to exist just a few months ago and the challenges are different from those of the past. Risks that for many actuaries were just theoretical possibilities have become lived reality. The future is anything but certain. However, we have been here before. In fact, students of history will know that seemingly out-of-the-blue events occur with astonishing regularity. The extreme event is to be expected; we just do not know when it will occur or what it will be. However, if history is any guide, we always manage to make it through to the other side.
So, amidst all the uncertainty, do not be afraid to embrace the opportunity or move in a new direction. That opportunity is there for you and the actuarial profession. We are counting on you to carry us forward. I am sure that you are up to the challenge.
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