Case Study: Paula Hodges, FSA, MAAA, Second Vice President, Associate Actuary at Ameritas Life Insurance
Paula Hodges went to college to major in math and computer science, so it was no surprise that her first job in the IT department at Bankers Life in Nebraska (now Ameritas Life Insurance Corp.) combined both those fields. It was there that Paula first became aware of the work that actuaries do in life insurance. Though she considered becoming an actuary at the time, Paula was quickly advancing in the IT department, and so she tucked the idea away. Later, after studying on her own, Paula got her FSA. Although she sees a lot of similarities in the skill sets between actuaries and IT workers, Paula came to love the business side of actuarial work. Today, Paula’s career passion is for improving efficiency through process redesign and effective project implementations in the actuarial department. She also enjoys seeing opportunities where actuaries can integrate their work with other departments, like IT and marketing.
In her current role, Paula works with a variety of teams, and her non-traditional career path gives her a unique perspective. One of her most recent projects was improving on Ameritas’ modeling process where she established an independent model development team. Thanks to Paula’s dual background in IT and actuarial work, she understands how to communicate with both the tech teams and actuarial teams, allowing her to start the formal model development process from the ground up. “Not only was I able to build the development process, but also the governance processes that go hand-in-hand to make sure we had an auditable, controlled function for how our models are developed and how they're used,” explains Paula. While developing the model governance process, she also helped start the data governance practice at Ameritas. This work has transformed and improved the way that models and data are used at Ameritas. According to Paula, “We have a lot of data, and if we hadn’t developed a governance process around it, people would be looking at the same data, but interpreting it differently, which can cause problems.”
As predictive analytics becomes more prevalent in the life insurance field, it’s essential for the IT and actuarial teams of a company to work together to produce the best, most accurate results. Paula knows that maintaining data quality can be a challenge for actuarial departments. Given that predictive analytics relies on data, the challenge will only grow.
“Actuaries and IT professionals have different skill sets, but it’s imperative that those teams work together if any company is going to commit to enhancing its predictive analytics capabilities,” says Paula. “At my company, we're just starting to move towards predictive analytics, but one of the things we've discovered is that we need to make sure we have an understanding of where our data comes from and lives. IT can provide that.”
She believes the growing challenge of maintaining data quality can be transformed into an opportunity for entry-level actuaries. “When it comes to entry-level actuaries, working with a senior actuary on data cleanup can be a good place for them to start learning about the importance of data governance and begin contributing from the data analytics perspective.”
Paula feels it’s important for actuaries to network with different areas of a company to see how they're using data and what actuaries can do to support them. “I think it's great for areas like marketing, to be involved in data analytics. Actuaries act as the bridge between the data and analytics for other areas of the business to help them interpret results and make business decisions,” says Paula. At Ameritas, Paula already sees the marketing department making good use of data analytics by doing research into their client base. Her goal is for actuaries to be more involved with marketing and other parts of the business to ensure that the data is being looked at from a process and risk assessment perspective, as well as a sales perspective.
Companies currently benefit from having actuaries in traditional departments, such as pricing, financial reporting, and risk management, and Paula believes they could benefit more from having actuaries in a variety of departments, such as marketing, IT and finance. She envisions a system in which early career actuaries working in predictive analytics could rotate through different departments. Doing so would help spread insights and skills throughout a company, as well as provide additional entry-level positions for those new to the actuarial profession.
For actuaries willing to look outside the box at career options, there are plenty of opportunities. “You have to open the door to think about what fields use data and what fields have risk associated with decisions made based on that data. That’s the intersection where there's a bright career for either a seasoned or entry-level actuary looking to expand their skills in predictive analytics.”