Pinnacle's Aaron Hillebrandt Says Actuaries Help Improve Businesses

As part of our ongoing commitment to provide thoughtful commentary concerning issues impacting captives and the broader insurance markets, we spoke with Aaron Hillebrandt, a director and consulting actuary with Pinnacle Actuarial Resources, Inc. Our interview covers the changing role of actuaries and how the Casualty Actuarial Society (CAS) is providing training and education for this evolution.

Aaron, I don't think we have ever interviewed an actuary who is a Marine Corps veteran. Were you interested in math/statistics before you joined the Corps, or did this interest in actuarial science develop after you separated?

I joined the Marines at age 17, so I don't know that I would say I was interested in math prior to joining, but I did have some ability in that area that I had not yet applied. When I joined the Marines, I thought that would be my career. But after two combat tours in Iraq as a combat engineer and machine gunner, I began exploring other career options. During my time in the Marines, though, I really learned the discipline to study for actuarial exams. I also began having a role designing effective training to allow an audience to easily internalize a message; in this case, training young Marines preparing to deploy to a combat zone for the first time. That particular skill and experience have been beneficial for me throughout my career.

You've also worked as a lecturer in mathematics at Illinois State University. How does your experience as an educator intersect with your role as a professional—particularly your work with clients and their boards?

Lecturing allowed me to transition the fundamental training skills I learned in the Marines to the actuarial world. Rather than training young Marines preparing to deploy to a combat zone, I was charged with training young actuarial students preparing for their first actuarial job. The experience helped me become more effective in presenting to clients and their boards. While most clients have deep expertise, their specific expertise may not lie in actuarial models, methods, and discipline. That becomes an opportunity to learn about my audiences and tailor my presentations to them in a way that helps them understand and internalize the core messages of the actuarial analysis with minimum effort. What follows is a more robust dialogue about the actuarial analysis and the client making more effective use of our work to make better business decisions.

How did you decide to get involved in the Casualty Actuarial Society (CAS) Syllabus and Examination Committee?

I joined the committee about a decade ago, soon after passing my last actuarial exam and earning my fellowship in the CAS. It was an opportunity to continue leveraging my training experience, only with more experienced actuaries. I started out writing and grading questions and am currently in my last year as the overall chair for one of the actuarial exams.

This is a two-part question: First, how do you personally see the role of an insurance actuary changing in the next 5–10 years? Second, how are you and the committee addressing these changes in the education and training curriculum?

As big data continues to influence and shape the insurance industry, the ability to model and leverage large data sets will be vital. The committee and the CAS have already made changes to reflect that shift, likely with more to come in the near future. It's important to understand, however, that the growing data science profession also has a modeling skill set. The emergence of data science has professional implications for actuaries as a consequence. But actuaries can differentiate themselves from data scientists with communication skills and by educating, not just calculating. Developing communication skills—and a consultative approach—should be additional focus areas for the actuarial profession in the next 5 to 10 years. There are strategic opportunities for the committee to fold this into CAS's educational process and curricula. It is worth noting that the CAS Course on Professionalism, which is required to earn actuarial credentials, recently added an enhanced focus on communication skills.

Speaking solely of Pinnacle, how are you integrating new talent into the company, and how do you motivate them to see Pinnacle as a long-term career path?

Pinnacle benefits from being one of the profession's largest independent actuarial firms. We have a sizable and very active internal recruiting team that engages top candidates every recruiting season. We have a track record of success hiring top talent, and they see Pinnacle as a great long-term career path. In addition, Pinnacle is a good place for young professionals to do exciting work early on in their careers. Our project team structure is not rigid, so our people can transition between practice areas in which they're interested in gaining experience. As our people grow and develop, there's a plethora of opportunities to manage projects, supervise staff, mentor and develop others, and participate in or lead operational areas of the company.

We have noted in other articles the need for captive insurers to be aware of and participate in the use of data and data analytics. How prevalent is this among the captives Pinnacle works with, and how do you convince clients to do more in this area?

Larger captives tend to have larger data sets to analyze. Enhanced data analytics is a natural area of progression for those larger captives as their management craves insights into the trends that impact their businesses. That conversation starts with a thorough and insightful actuarial presentation on the trends impacting the captive in question. Oftentimes, there are important insights that can be unlocked from the data—but the actuary should have access to a broader database than what is routinely used in loss reserving and funding analyses. When it comes to convincing stakeholders, it's important to understand the concerns of the client and clearly highlight how data can help improve the captive's operations. Meaningful and open communications with clients can help them understand the value and worthiness of deep-dive data analytics.

There are a lot of different forces, like technology, climate change, federal and local regulations, etc., that are shaping the future of the insurance industry. How do you see the role of actuaries, or even consultants, changing or being enhanced as a result of these influences?

Actuaries and consultants, in general, should continue to see growing opportunities. As the insurance industry continues to evolve, the profession must remain innovative, investing time to research emerging areas that will enable informed advice for our clients. For actuaries specifically, the profession needs to continue marketing itself appropriately—as comprehensive professionals and essential partners helping companies and industries anticipate and meet emerging quantitative business challenges.

Any closing comments you would like to make to our readers?

I really feel fortunate to be working in the actuarial and consulting industries at this particular point in time. A lot of companies and industries have struggled with pace of change, particularly as it relates to technology. I feel, as do a lot of my colleagues and peers, that those shifts will mean really great things for the actuarial profession and the insurance industry. It's our role to help clients through this period of change and I think our responsibility to continually demonstrate how we, as actuaries, can help them improve their business. I've witnessed how this has played out through my work with the CAS and with Pinnacle clients. I am proud because I have seen what empathetic actuaries and consultants can do for companies. It is really encouraging and gives me great confidence in the future of the profession.

Aaron, thanks for your time and willingness to speak with us.

(Photo of Mr. Hillebrandt is courtesy of Pinnacle Actuarial Resources, Inc.)