New Report Holds Keys To Diversity And Inclusion
FIVE BARRIERS REVEALED
In a new study conducted on behalf of the Society of Actuaries (SOA), the Actuarial Foundation, the Casualty Actuarial Society (CAS), and the International Association of Black Actuaries (IABA), respondents were asked to consider the statement “The actuarial profession is not as diverse as it should be.” The majority of respondents — 83 percent of African-American and Hispanic respondents and 55 percent of respondents from other racial backgrounds — agreed.
That might sound like progress. The majority of people in the profession recognize that diversity issues need to be addressed. To turn that statistic on its head, however, 45 percent of respondents who are neither African-American nor Hispanic believe diversity in the actuarial field is just right. Now consider that a mere 2 percent of actuaries are African- American. Another 2 percent are Hispanic. Yet, a sizable number of actuaries do not see diversity as a problem that needs to be corrected.
There may be several reasons for this, but one common argument is that the actuarial field is a meritocracy: If you can pass the exams, you can be an actuary. The findings of the new report, “Diversity and Inclusion Research Initiative,” indicate minorities experience the pathway to becoming an actuary in a different way, challenging the meritocracy concept.
BARRIERS AT EACH STAGE OF THE CAREER PIPELINE
With planning beginning in 2015, the study was conducted by C+R Research in three phases from fall 2016 through summer 2017. Based on the data they collected, the researchers identified five segments of the “actuarial career pipeline” where African Americans and Hispanics face barriers to a greater extent than Caucasians:
- Awareness of the field
- Consideration of actuarial science as a viable profession
- Preference over other science, technology, engineering and math (STEM) professions
- Intent to take and pass the exams
- Employment and retention
The barriers at the start of the pipeline tend to compound those at each consecutive stage. Lack of awareness is the most basic problem. Just 12 out of 100 African-American or Hispanic college freshmen surveyed had heard of the actuarial profession. That’s less than half of the rate for other groups. A full 72 percent of lapsed minority candidates indicated they learned about the profession after high school (Figure 1).
This discrepancy has a resounding impact. With lower awareness comes less preparation for the course work once a student decides to pursue actuarial studies, a later start date to begin taking exams, and fewer connections within the field. All of these factors make passing exams, connecting with mentors and landing internships and jobs much more difficult.
After awareness, the next hurdle on the career pipeline is for students to consider actuarial science a viable option. Of minority lapsed candidates who learned about the profession later in life, 36 percent reported that they did not feel they could invest the time and money required to become an actuary. Older students often cannot afford to put off getting a full-time job while they study and sit for the exams. Without enough preparation time, they are less likely to pass the exams. Aware of this — and unaware of financial support that may be available to them — many minority students do not even begin down the road to becoming an actuary.
Beyond those challenges to entry, students must develop a preference for the actuarial profession over other STEM fields. This represents the third stage of the career pipeline — and another barrier. “Drawing minority students into the profession requires positioning the career as meaningful, attainable, rewarding, prestigious and secure,” the researchers note. Without those attributes, top-performing minority students are more likely to show a preference for one of the more familiar STEM fields, such as medicine, computer science or engineering.
Students who overcome the first three barriers now must take the relevant courses and pass the exams. Although many in the actuarial field have argued that the credentialing process is an objective step that levels the playing field — either you pass the tests or you don’t — the current research complicates that argument.
To obtain credentials, candidates need appropriate academic preparation, a support network, and financial support. Yet, a lack of academic preparation and little or no financial support in college are both more prevalent in minority populations than in other groups…