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The exams have two ultimate objectives: 1. Perpetuate the actuarial guild 2. Shovel money from aspiring actuaries and insurance companies into the SOA's coffe

The exams have two ultimate objectives: 1. Perpetuate the actuarial guild 2. Shovel money from aspiring actuaries and insurance companies into the SOA's coffers They aren't really, and aren't really meant to be, a marker of general, transferable intellectual skills or achievement outside the insurance industry. So it's not surprising that no one other than the parties involved (the SOA, aspiring actuaries, and insurance companies) recognizes them as a meaningful credential.

zeckalpha 5y ago
Seems like the association should do a, you know, risk analysis on what will happen if these trends continue.
newyankee 5y ago
In India, I feel the same about Chartered accountants and Lawyers. Not trying to dismiss their knowledge and expertise, but it is crazy the amount of stuff you can do yourself in this day and age but still need their signature. Low key I feel the same about some of the lower skilled Doctors too, although it is a very different ball game risk wise.
seibelj 5y ago
This is the same model of all licenses, which is inherited from the guild system common throughout all of human history (the government (monarchs, oligarchies, democracies) protect favored industries from competition). I put them on a spectrum: - Licenses that anyone can obtain by showing the requisite skills. This is the least nefarious, and the clearest example would be driver's licenses. In a perfect world anyone can apply for and receive a driver's license. It gets corrupted by requiring training from other state-approved schools, but in its purest form it achieves, "If you can pass the driver's test, you get a license." Interestingly enough even advanced degrees sometimes achieve this goal - in California anyone can take the bar exam and get licensed to practice law without ever attending an accredited law school. Every other state requires you to attend law school (and the required cost / debt) before getting licensed. - Licenses that you can obtain only after attending approved schools. This would be doctors, dentists, accountants, and nearly every lawyer (see above). The filter for the guild is getting into the approved school. If you manage to get accepted into and complete the program, you will succeed in getting licensed based on raw intelligence (meritocracy). The primary filter that protects the guild is getting into the approved schools (although there exists a subset of people who make it into school and fail the license exam, most commonly in law). - Licenses that anyone can get, but require some absurd amount of hours of training, which usually costs absurd amounts of money that achieves nothing and are government mandated because of various entities that lobby politicians. These would be all of the blue-collar guilds like hair stylists, interior decorators, and being a florist in Louisiana (seriously - https://www.kplctv.com/story/37848470/requirements-for-louisiana-floristry-license/ https://www.kplctv.com/story/37848470/requirements-for-louis...). You can learn the basics of hygiene and sweeping hair in a 60 minute youtube video, but the 1000 hour requirement in a for-profit cosmetology school in Massachusetts (https://www.mass.gov/service-details/how-can-i-become-a-cosmetologist-manicurist-or-an-aesthetician https://www.mass.gov/service-details/how-can-i-become-a-cosm...) is absolutely absurd, especially considering becoming an EMT - someone that literally saves lives and gets dying people to hospitals - is a $950 six-month part time program (https://www.boston.gov/departments/emergency-medical-services/how-become-boston-ems-emt https://www.boston.gov/departments/emergency-medical-service...). Even worse, very rarely these licenses are transferrable between states, making the blue collar employee both indebted and chained to a particular area. - Licenses that anyone can get, but are purely graded on a curve in order to protect existing members. Finally we get to the actuarial licenses! Similar licenses would be Michelin star restaurants and wine sommeliers. Only a very small community appreciates these licenses, but the value to those that have them is high via the artificial scarcity. In order to keep them fair they offer the test(s) to anyone, but grade on an absurdly difficult curve to make them essentially random, and then take only the top scorers to preserve their scarcity. The process to get the license is to cram test exams ad infinitum and continue to take the test until you randomly get the top score. They ultimately mean nothing, at least compared to the amount of people who deserve the license vs. those that have them. In summation, licenses are an atrocious relic of a bygone era, but because of economic incentives they live on in a variety of forms and have little chance of ever being eliminated. Addendum - occasionally I will see an HN poster asking why there isn't some sort of certification or license for software engineers (perhaps in some countries these exist, but not in the USA where software engineers are the top-tier of salaries across all industries). My argument against this is that the lack of licenses is exactly why US tech companies dominate the world - anyone can succeed whether they are an ethnic or sexual minority, autistic / neuroatypical, paraplegic, etc. can learn to code and make an impact - and at any age! Licenses mean nothing to technology, and the moment they appear is a signal that something significant has changed and the industry in that country will collapse when compared to all the other countries that don't artificially restrict talent.
- buck4roo 5y ago
  Nominate parent for best of HN2021 award
- namdnay 5y ago
  > Licenses that anyone can get, but are purely graded on a curve in order to protect existing members. Finally we get to the actuarial licenses! Similar licenses would be Michelin star restaurants and wine sommeliers. Only a very small community appreciates these licenses, but the value to those that have them is high via the artificial scarcity. In order to keep them fair they offer the test(s) to anyone, but grade on an absurdly difficult curve to make them essentially random, and then take only the top scorers to preserve their scarcity. The process to get the license is to cram test exams ad infinitum and continue to take the test until you randomly get the top score. They ultimately mean nothing, at least compared to the amount of people who deserve the license vs. those that have them. If I follow you correctly, this last category is basically all "competitive examinations"? I wouldn't be so quick to dismiss them (maybe that's because I live in France, where competitive examinations are the third national pastime, just behind moaning and striking). Michelin stars for example are supposed to distinguish the best restaurants, so of course they're going to be competitive! Would you complain that we only give three Olympic medals per event? These competitions can be useful in case of limited availability (e.g. number of places every year in an elite engineering college), but also just as a signal that you're dealing with the best of the best. For example, if you go to a Boulangerie held by a "Meilleur Ouvrier de France", you know you're going to get some of the best croissants in the world.
  - civilized 5y ago
    > These competitions can be useful in case of limited availability (e.g. number of places every year in an elite engineering college), but also just as a signal that you're dealing with the best of the best. When you're dealing with actuaries, you're definitely not dealing with the collective "best of the best" (although individuals may happen to be excellent). You're dealing with people who were willing to memorize and practice and grind a very specific set of exams because they had no other options or didn't want to do anything else.
  - 5y ago
nerdponx 5y ago
But are they not actually markers of transferable skills? I have worked in insurance, but not as an actuary, and my impression was that actuaries generally do have skills that are broadly useful in data science. Why shouldn't the actuarial exams count for something on other job applications?
- civilized 5y ago
  I've also worked with actuaries and my impression has been different. Some of them have some skills, but it's very hit-and-miss, and it's not clear to me that the average actuary would compete with the average Master's in Data Science / Stats / CS in terms of effectiveness as a data scientist. Their big weakness is computational/programming skills. Many of them are simply unable to function outside of Excel. The SOA is trying to remedy this with new exams (of course) but my impression is that it's too little too late.
  - solumos 5y ago
    this is true — as an analyst, I was severely reprimanded for writing data cleanup scripts since they couldn't be reviewed in vanilla Excel
    - civilized 5y ago
      Incredibly depressing. I hope you got out.
  - ActualActuary 5y ago
    I think it’s an unfair comparison. Of course the average actuary wouldn’t even come close to the average days scientist when it comes to data science skills. Just like the average doctor wouldn’t, the average lawyer wouldn’t, and the average banker wouldn’t. The problems they solve require very different skills. The problems I solve on a day to day basis have no need for data science. There are certain areas in my company where we use data science heavily, but in the areas we do need to use it we just use actual data scientists. The SOA, in my opinion, is going down the wrong path. Actuaries shouldn’t be trying to compete with data scientists. It has such little relevance to the work of most actuaries and in my opinion it’s just a way for the SOA to try and increase their revenues by jumping on a bandwagon. I agree with you “hit and miss” observation though. The exams are a barrier, but they’re not perfect. Plenty of mediocre people slip through the net. My company has roughly 100 actuaries. There are maybe 10-15 people that I’d consider very good at their job. The rest are just “meh”. I suspect this is the same in most fields though. Most companies now seem to have some sort of “data science” function. Unless the company is a tech or “data is the product” company, those data science functions don’t seem to contain the brightest data scientists. A friend of mine is a data science lead at retail company, and he’d be the first to admit he’s fairly mediocre. Most of their challenging work is outsourced to a specialist consultancy and their in house staff barely do any actual “science”.

zeckalpha 5y ago

Seems like the association should do a, you know, risk analysis on what will happen if these trends continue.

newyankee 5y ago

In India, I feel the same about Chartered accountants and Lawyers. Not trying to dismiss their knowledge and expertise, but it is crazy the amount of stuff you can do yourself in this day and age but still need their signature. Low key I feel the same about some of the lower skilled Doctors too, although it is a very different ball game risk wise.

seibelj 5y ago

This is the same model of all licenses, which is inherited from the guild system common throughout all of human history (the government (monarchs, oligarchies, democracies) protect favored industries from competition). I put them on a spectrum: - Licenses that anyone can obtain by showing the requisite skills. This is the least nefarious, and the clearest example would be driver's licenses. In a perfect world anyone can apply for and receive a driver's license. It gets corrupted by requiring training from other state-approved schools, but in its purest form it achieves, "If you can pass the driver's test, you get a license." Interestingly enough even advanced degrees sometimes achieve this goal - in California anyone can take the bar exam and get licensed to practice law without ever attending an accredited law school. Every other state requires you to attend law school (and the required cost / debt) before getting licensed. - Licenses that you can obtain only after attending approved schools. This would be doctors, dentists, accountants, and nearly every lawyer (see above). The filter for the guild is getting into the approved school. If you manage to get accepted into and complete the program, you will succeed in getting licensed based on raw intelligence (meritocracy). The primary filter that protects the guild is getting into the approved schools (although there exists a subset of people who make it into school and fail the license exam, most commonly in law). - Licenses that anyone can get, but require some absurd amount of hours of training, which usually costs absurd amounts of money that achieves nothing and are government mandated because of various entities that lobby politicians. These would be all of the blue-collar guilds like hair stylists, interior decorators, and being a florist in Louisiana (seriously - https://www.kplctv.com/story/37848470/requirements-for-louisiana-floristry-license/ https://www.kplctv.com/story/37848470/requirements-for-louis...). You can learn the basics of hygiene and sweeping hair in a 60 minute youtube video, but the 1000 hour requirement in a for-profit cosmetology school in Massachusetts (https://www.mass.gov/service-details/how-can-i-become-a-cosmetologist-manicurist-or-an-aesthetician https://www.mass.gov/service-details/how-can-i-become-a-cosm...) is absolutely absurd, especially considering becoming an EMT - someone that literally saves lives and gets dying people to hospitals - is a $950 six-month part time program (https://www.boston.gov/departments/emergency-medical-services/how-become-boston-ems-emt https://www.boston.gov/departments/emergency-medical-service...). Even worse, very rarely these licenses are transferrable between states, making the blue collar employee both indebted and chained to a particular area. - Licenses that anyone can get, but are purely graded on a curve in order to protect existing members. Finally we get to the actuarial licenses! Similar licenses would be Michelin star restaurants and wine sommeliers. Only a very small community appreciates these licenses, but the value to those that have them is high via the artificial scarcity. In order to keep them fair they offer the test(s) to anyone, but grade on an absurdly difficult curve to make them essentially random, and then take only the top scorers to preserve their scarcity. The process to get the license is to cram test exams ad infinitum and continue to take the test until you randomly get the top score. They ultimately mean nothing, at least compared to the amount of people who deserve the license vs. those that have them. In summation, licenses are an atrocious relic of a bygone era, but because of economic incentives they live on in a variety of forms and have little chance of ever being eliminated. Addendum - occasionally I will see an HN poster asking why there isn't some sort of certification or license for software engineers (perhaps in some countries these exist, but not in the USA where software engineers are the top-tier of salaries across all industries). My argument against this is that the lack of licenses is exactly why US tech companies dominate the world - anyone can succeed whether they are an ethnic or sexual minority, autistic / neuroatypical, paraplegic, etc. can learn to code and make an impact - and at any age! Licenses mean nothing to technology, and the moment they appear is a signal that something significant has changed and the industry in that country will collapse when compared to all the other countries that don't artificially restrict talent.

buck4roo 5y ago
Nominate parent for best of HN2021 award
namdnay 5y ago
> Licenses that anyone can get, but are purely graded on a curve in order to protect existing members. Finally we get to the actuarial licenses! Similar licenses would be Michelin star restaurants and wine sommeliers. Only a very small community appreciates these licenses, but the value to those that have them is high via the artificial scarcity. In order to keep them fair they offer the test(s) to anyone, but grade on an absurdly difficult curve to make them essentially random, and then take only the top scorers to preserve their scarcity. The process to get the license is to cram test exams ad infinitum and continue to take the test until you randomly get the top score. They ultimately mean nothing, at least compared to the amount of people who deserve the license vs. those that have them. If I follow you correctly, this last category is basically all "competitive examinations"? I wouldn't be so quick to dismiss them (maybe that's because I live in France, where competitive examinations are the third national pastime, just behind moaning and striking). Michelin stars for example are supposed to distinguish the best restaurants, so of course they're going to be competitive! Would you complain that we only give three Olympic medals per event? These competitions can be useful in case of limited availability (e.g. number of places every year in an elite engineering college), but also just as a signal that you're dealing with the best of the best. For example, if you go to a Boulangerie held by a "Meilleur Ouvrier de France", you know you're going to get some of the best croissants in the world.
- civilized 5y ago
  > These competitions can be useful in case of limited availability (e.g. number of places every year in an elite engineering college), but also just as a signal that you're dealing with the best of the best. When you're dealing with actuaries, you're definitely not dealing with the collective "best of the best" (although individuals may happen to be excellent). You're dealing with people who were willing to memorize and practice and grind a very specific set of exams because they had no other options or didn't want to do anything else.
- 5y ago

nerdponx 5y ago

But are they not actually markers of transferable skills? I have worked in insurance, but not as an actuary, and my impression was that actuaries generally do have skills that are broadly useful in data science. Why shouldn't the actuarial exams count for something on other job applications?

civilized 5y ago
I've also worked with actuaries and my impression has been different. Some of them have some skills, but it's very hit-and-miss, and it's not clear to me that the average actuary would compete with the average Master's in Data Science / Stats / CS in terms of effectiveness as a data scientist. Their big weakness is computational/programming skills. Many of them are simply unable to function outside of Excel. The SOA is trying to remedy this with new exams (of course) but my impression is that it's too little too late.
- solumos 5y ago
  this is true — as an analyst, I was severely reprimanded for writing data cleanup scripts since they couldn't be reviewed in vanilla Excel
  - civilized 5y ago
    Incredibly depressing. I hope you got out.
- ActualActuary 5y ago
  I think it’s an unfair comparison. Of course the average actuary wouldn’t even come close to the average days scientist when it comes to data science skills. Just like the average doctor wouldn’t, the average lawyer wouldn’t, and the average banker wouldn’t. The problems they solve require very different skills. The problems I solve on a day to day basis have no need for data science. There are certain areas in my company where we use data science heavily, but in the areas we do need to use it we just use actual data scientists. The SOA, in my opinion, is going down the wrong path. Actuaries shouldn’t be trying to compete with data scientists. It has such little relevance to the work of most actuaries and in my opinion it’s just a way for the SOA to try and increase their revenues by jumping on a bandwagon. I agree with you “hit and miss” observation though. The exams are a barrier, but they’re not perfect. Plenty of mediocre people slip through the net. My company has roughly 100 actuaries. There are maybe 10-15 people that I’d consider very good at their job. The rest are just “meh”. I suspect this is the same in most fields though. Most companies now seem to have some sort of “data science” function. Unless the company is a tech or “data is the product” company, those data science functions don’t seem to contain the brightest data scientists. A friend of mine is a data science lead at retail company, and he’d be the first to admit he’s fairly mediocre. Most of their challenging work is outsourced to a specialist consultancy and their in house staff barely do any actual “science”.