Profession’s Development Has Given Retired Actuary Great Experiences

When Scott McGaire first considered working in actuarial science, it was difficult to discover anything about the actuarial profession. But during his 30-plus years at major companies, he has seen actuaries become increasingly important and the profession go from strength to strength.

Mr. McGaire, a former chair of the Member Services Council and long-standing CIA volunteer, retired in April, although he continued working on contract for eight months to help with the transition. His career began with tentative inquiries at the University of British Columbia in the 1970s and led to him spending many years in various roles at Manulife, most recently as participating fund actuary.

He said: "No-one at high school had heard of actuaries, but I was always interested in math and when I saw a brochure about actuarial science I was intrigued. At university I started thinking about it and decided I would give it a shot. However, there weren’t that many actuaries on the west coast, and I had to ask a number of professors and others before I could obtain a mailing address to apply to write the exams.

"With a couple of exams under my belt I started writing to all the head offices and Dominion Life took a chance on me. It worked out really well. It was a smaller company, with about 550 to 600 employees, owned by Lincoln National. Even then we were performing monthly valuations, so we spent a lot on administration infrastructure. There was not a lot of product innovation.

"It was quite a different deal when Manulife picked up Dominion in 1985. There was more focus on sales and product innovation. The valuation process went at a more leisurely pace as they were a mutual company. Office space was relatively cheap in Kitchener-Waterloo, so they moved the Canadian Division to Waterloo. Only a few staff came from Toronto with the move, and so a lot of hiring went on.

"We were very busy, learning about the many different products at this bigger company and wondering how we would get it all done with everyone so new. Quickly the building wasn’t big enough, and people had to be moved around again. Now that I think about it, that is one thing that hasn’t changed. Restructuring, growth, and acquisitions continue to be the root causes of office moves everywhere.

"Underwriting has changed so much over the years, and that has had a profound impact on product development and valuation. When I started work, smoker/non-smoker rates were just being introduced—the next stage in preferred underwriting after the introduction of male/female mortality many years earlier. In the late 1980s, blood testing was introduced as a reaction to a rising wave of HIV infections, but it was quickly realized that this test was an efficient screen for many other conditions. It was probably this test, more than any other, which allowed the industry to introduce the varied levels of preferred underwriting that exist today.

"In the 1990s everybody was acquiring everybody else and the profession was changing along with the industry. Computers altered everything, and we saw the growth of various products tailored to actuaries that took away the nitty-gritty programming work and meant that actuaries could concentrate on developing better analysis, product design, and more robust valuation techniques."

Towards the end of the century, a wave of demutualization took place in the industry. "I was part of the project team for Manulife, preparing the contribution analysis of the Canadian participating funds. It was fascinating work, poring through the archives to reconstruct histories for the many participating blocks represented."

Meanwhile, the profession continues to take great leaps and strides, Mr. McGaire added. He is looking forward to travelling during his retirement but plans to stay involved in CIA volunteering and other activities. "When you look around the world, many countries do not have much in the way of an actuarial profession, and others have quite different rules and standards, so it is often difficult to compare results. Through the International Actuarial Association, actuaries around the world are trying to bring more conformity to actuarial practice. Although I am biased and I mostly like the Canadian approach, there are many other ideas out there and I’m interested in seeing how that plays out. There is a lot of work to do."

Volunteering had proved very important during his career and he urged other actuaries to follow in his footsteps. "The CIA has done a lot with a relatively small number of actuaries, but we could be an even stronger profession with more volunteers to spread the work around and take on new challenges. People who are coming into the profession should consider how they can help. The on-line tools make this so easy to do now.

"There is great satisfaction in doing something that does not just concern your own narrow job. You can also make a lot of contacts, and I’m planning to keep in touch and make more friends as I continue to be involved."

Canadian Institute of Actuaries/Institut canadien des actuaires