IAA Branding Task Force Report, September 2014

IAA Branding Task Force Report, September 2014

IAA BRANDING TASK FORCE REPORT

FINAL

September 14, 2014

TABLE OF CONTENTS

Abstract

1. Definition of Brand
2. Benefits of Branding
3. Current Brand of the Actuarial Profession
4. Clients and Stakeholders
5. Brand Message
6. Current Branding Practices of the IAA and Member Associations
7. Best Practices of non-Actuary Organizations
8. Branding of the CERA Credential
9. Task Force Recommendations
10. Deliverables
11. Conclusion

Appendixes

1. Toolkit for Member Associations
2. Index and Links to Dropbox/Website with branding content from other organizations
3. Strategic Objective 6
4. Branding Experience of other Professional Associations
5. Definitions of Marketing and Branding
6. IAA Branding Task Force Members

ABSTRACT

The IAA Branding Task Force recommends that the IAA should integrate branding concepts into all its activities, including and especially with regard to SO 1, Supranational relationships, and in support of smaller member associations, especially where the profession is still getting established.

The IAA should establish a permanent mechanism for Branding to monitor activities and further develop awareness of the profession. A modest annual budget should be provided for branding activities.

The IAA should coordinate and collaborate with branding efforts of member associations and the CERA Global Association, to avoid duplication and inconsistencies, consistent with the principle of subsidiarity.

This report provides background, suggested brand messaging, best practices, recommendations and deliverables. One major deliverable is a toolkit to support activities of developing member associations.

MAIN TEXT

Upon recommendation by the Strategic Planning Subcommittee of the IAA’s Executive Committee (“SPS”), SO 6 was adopted by Council by electronic ballot in September 2012. Rob Brown, then SPS Chair, formed this Task Force to begin execution on SO 6. The Task Force has met several times in person and by conference call, has gathered extensive information on branding among member associations and other organizations, and now offers our proposals to SPS, EC and ultimately to Council.

1. Definition of Brand/Branding

Early meetings of the TF focused on the definition of branding, and the distinction between related terms such as logo, marketing and public relations.

A brand is an abstract concept, similar to a promise. It encapsulates the essence of a product or organization. It contains among other things a brand identity, built on a brand’s values and a brand promise . A brand can be represented by a name, logo, or tagline, but the brand is the promise of consistency and differentiation in certain goods or services. Well known brands for goods include McDonalds, BMW, and Samsung. Well known brands for services include FedEx (reliable delivery services), McKinsey (strategic consulting), and “CPA” (Certified Public Accountants, for audit and tax services). In each case the name or logo conjures a concept in the mind of the constituent, a concept of predictable experience.

A logo is a representation of the brand. McDonalds and BMW have highly recognizable logos and/or taglines. But a logo isn’t really necessary. This TF is not recommending development of a logo to represent the profession. The IAA already has an identifiable logo that can be used where appropriate.

Brand is improved by good experiences and damaged by poor or inconsistent experiences, either in what is delivered or how it is delivered. A relatively small number of examples of inconsistent, inaccurate work by actuaries could disproportionately damage the brand. One way to limit such damage is with continuing education, information on what is required from an actuary, and a fair disciplinary process. The review of disciplinary processes and professional standards is beyond the scope of this TF, but we need to emphasise that the existence of and adherence to professional standards and disciplinary processesare key to the positioning of the “actuary” brand.

The goal of SO 6 is for the word “actuary” to mean a professional with strong technical statistical and financial skills, who provides valuable, accurate work and advice. Our work is focused on risk and the financial impact of future contingent events. Ongoing professional development and experience are critical, backed by an appropriate professional standards, peer-review and, where appropriate, disciplinary processes. The fields may be traditional, such as various kinds of insurance and pensions, or may be newer, emerging areas such as ERM, analytics, banking, infrastructure planning and capital developments.

The professional is typically paid for services provided, not contingent on a specific outcome. The professional’s client or employer may not be qualified to perform the work himself or herself, and needs to be able to rely on a predictable high quality of work.

A brand need not denote high quality, for example, Coca Cola may not be the best quality or best taste in everyone’s opinion, but the taste and experience is very predictable. Of course we want the actuary brand to connote high quality as well as consistency.

This SO 6 relates to branding of the profession globally, and not branding of the IAA as an organization. The SO also does not relate to branding member associations.

We use the word branding to mean the maintenance and enhancement of the brand.

Difference between Branding and Marketing: Marketing is the process of communicating the brand to constituents, and encouraging the development of business around the brand. Public relations is the part of communication toward external constituents and typically relies on consultants (“PR” firms). This TF is not recommending marketing nor use of PR consultants.

1. Benefits of Branding

Branding makes marketing and selling actuarial services easier. In an ideal situation the client has a preconceived and favorable notion of what to expect from an actuary and their work. Here we use the word “client” to mean consulting client, employer, regulator or any other constituent who may rely directly on the work of the actuary. We will use “stakeholder” to include clients and also those who benefit indirectly from the work of the actuary.

A strong professional brand attracts new clients and new engagements from existing clients. A strong professional brand brings with it a predisposition toward acceptance among stakeholders—the “benefit of the doubt” where the work cannot be independently and immediately validated.

Benefits of branding will vary according to effectiveness of branding, which depends on quality and consistency of work, frequency of messaging, and the receptiveness of the audience. Most likely the benefits will emerge slowly but with time will enhance the perception of the profession and actuaries as individuals, leading to better employment prospects and improved favorable influence of the profession on a wide range of public and private matters.

1. Current Brand of the Actuarial Profession

One observation we wish to make is that we already have a brand. We have created a brand by our professional actions over a period of years. Some aspects of the brand are good, while other aspects we would like to change. Actuaries are perceived as highly trained, ethical professionals. On the other hand many actuaries have experienced being typecast as impractical, focused on trivia, and guilty of false precision. Fortunately thestereotype seems less common now than in the past. Of course, the brand perception varies by country.

In Australia, South Africa and a few other countries, the profession has branched into non-traditional areas more effectively than in North America, hence the brand there enjoys wider respect. Over 100 actuaries in South Africa work in the banking industry.

The SOA and other large member associations have tried to analyze and make more precise the perception of the actuary brand. In the US and Canada, employers view actuaries as intelligent, highly trained, knowledgeable in their field, and highly ethical. On the other side, many employers tend to view actuaries as lacking in business acumen. In a recent SOA survey employers were asked to rate actuaries on various skills. The highest skill was “Quantitative” with 98 percent of employers rating actuaries as 4 or 5 (5 being the highest level of skill). Attention to detail and trustworthiness were next highest. The three lowest skills were ability to communicate, interpersonal skills and management. Only 11 percent of employers rated actuaries as high in management skill.

In developing economies, the actuarial profession is not widely known and in some cases is struggling to gain recognition from regulators. IAA branding efforts here are likely to benefit smaller member associations substantially. Below, we give a good example of the benefits of the IAA brand to the Russian Guild of Actuaries.

We continue to build our brand through the IAA and its member organizations. For example the work of the Supranational committee is regarded as very successful, as the chair and committee members work with other organizations such as accountants, attorneys, regulators and the media. As one example, the Supranational committee has forged excellent relationships with the IAIS, the IASB, ISSA, and recently held a successful meeting with Christine Lagarde, head of the IMF. Members of the Supranational committee are regularly asked to give presentations on actuarial work. Some examples: Asian Development Bank, Geneva Discussion Forum, International Social Security Association. Most of our branding however is somewhat unconscious. Many of these same activities could be modified very slightly, to more specifically build our actuary brand.

1. Clients and Stakeholders

Who are the groups of people that we care to influence? Who are our stakeholders? Some larger member associations have produced a comprehensive list of constituents: employers, clients, shareholders, policyholders, universities, researchers, regulators, other professionals such as accountants and attorneys, the media, the public, candidates, and we would add, actuaries themselves. Insurers, pension funds, social insurance programs, health care industries are all impacted to a greater or lesser extent by the work of actuaries. Almost any individual with financial interests could be affected by the work of actuaries.

Some stakeholders are direct users of actuarial work, for example employers, or regulators. Other stakeholders are affected indirectly, for example policyholders of an insurer, or members of a pension fund.

The group of stakeholders is likely to grow larger as actuaries branch into wider fields such as ERM, advanced analytics and complexity science. Eventually we would hope that the actuary brand would be held in high regard by the general public.

Each stakeholder currently has some level of awareness of the actuary brand, but most actuaries would agree that the awareness outside of traditional employers is limited. In many cases the awareness is a negative impression.

The brand awareness also varies by country. Most likely the constituents in greatest need of information about the actuary brand are in smaller countries and developing economies as well as executives of corporations other than insurance companies, who perceive actuaries to be insurance specialists only. They may be unaware of the need for, and benefits of long advance financial planning of the type performed by actuaries. The good news there is that we have a green field in which to spread our influence.

This task force believes that our branding efforts should attempt to influence all stakeholders in a consistent way. The level of detail, and specific message, may vary according to the audience but the branding message in totality needs to be agreed upon, and the IAA can play a critical role in agreeing on the message. Each member association can tailor the message and the delivery mechanism to local needs.

Branding within each group of stakeholders brings a range of benefits. For employers and clients, especially in non-traditional areas, the benefit is awareness, access and effective utilization of actuarial skills. For shareholder and policyholders, the benefit is the confidence in the quality of work required to protect their financial interests. For the public, the benefit could be improved social and/or health insurance programs. A profession by definition serves not only the direct client but also the public interest. And branding benefits actuaries themselves and the profession directly, by gaining recognition from lawmakers and regulators, and increased potential employment opportunities.

1. Brand Message

What message do we want to convey to stakeholders? We’ve identified our brand to ourselves, for the most part, although it tends to vary by market and geography. Actuaries are skilled professionals with training in probability and statistics, financial economics, risk, and one or more of several specialties: life and annuity insurance; general insurance (also called property/casualty insurance); health care; finance & investment; pensions; and enterprise risk management. Although actuarial training has specialized in these areas, the core technical and business skills can be deployed effectively and provide fresh insights to a wide range of business and policy applications requiring long term and strategic thinking, business acumen and risk management.

The overall message needs to be articulated crisply, and supported by consistent supporting messages. Possibly a tagline definition, or a small number of tagline definitions, would be helpful in conveying the high level brand message. One suggestion: “The actuary values uncertainty” which contains an intentional double meaning. Other suggestions may be developed. “Quantifying Risk, Enabling Opportunity” and “Turning numbers into knowledge.” And of course local member associations may choose their own tagline.

Supporting messages include concise descriptions of skills, training, professionalism anddiscipline:

The core skills of the actuary. Actuaries are skilled mathematicians, with training in various analytical methodologies, and an ability to quantify the range of financial effects of uncertain future events, short term and long term. Actuaries use assumptions as to future experience and many types of models to project a range of outcomes and their financial impact.

Actuarial training is rigorous. It emphasizes the analytical and objective aspects of financial decision making, with special recognition of the uncertainty of forecasts and projections. Certain member associations provide post-degree training and use examinations to validate learning. Other associations rely on university training to a greater or lesser extent. In most cases actuarial training represents the equivalent of 2 or more years of university level learning after an undergraduate university degree. Subject matter of training includes probability, statistics, demographics, economics, actuarial models, financial engineering, insurance, pensionsand risk management.

The profession has a high degree of integrity and professionalism, guided by a code of conduct; actuarial standards of practice and other levels of guidance; continuing education; and enforcement by a disciplinary process. Certain countries already have codes and actuarial standards in place. The IAA is developing standards that may be adopted by member associations as needed and appropriate. Full membership in the IAA requires that member associations have a code of conduct and a disciplinary process in place, in addition to education requirements.

Individual actuaries have different specialized skills, but the basic core skills are relatively uniform worldwide. Hence a clear global branding message should be possible. And there seems to be consensus that actuaries should become more identifiable as risk professionals, indicating the need for related brand messaging.

The brand message of any profession should also somehow make it clear that we serve the public interest. We should be seen as more than aiding corporations to operate successfully. Our knowledge is intended to benefit all our stakeholders, including the bests interests of the public good.

Perhaps an area where actuaries sometimes are perceived as lacking skill is the area of business acumen. Training emphasizes objectivity and professional judgment , rather than accepting risk or building businesses. In some countries actuaries are perceived as technical experts but not business leaders. In response the United Kingdom Institute and Faculty and certain other organizations have added communications and business skills to the curriculum. Elsewhere, those skills come through continuing education or work experience. And with risk management training, actuaries will increasingly be making decisions reflecting their best judgment concerning risk. Individual member associations should determine whether to include business acumen and decision making skills as part of the brand message.

Perhaps it bears repeating that the nuances of the brand message will need to be tailored to the audience. The brand message emphasis to candidates clearly would differ from the brand message to employers, say, or regulators. On the other hand there can be no inherent inconsistency in the message or else the profession will lose credibility. There must be common views, facts and aspirations. Working out the nuances of the message is beyond the scope of work of this Task Force.

1. Current Branding Practices of the IAA and Member Associations

Many current IAA activities already help to build the actuary brand, and the activities are increasingly effective. There are several examples.

The Supranational Relations committee holds regular meetings with international organizations of accountants and regulators, for example IASB, IAIS, ISSA, IOPS, OECD and potentially others.

IAA officers periodically make speeches or otherwise participate in industry meetings. The Secretariat issued 26 news releases in 2013, and the process continues at the rate of about 2 per month. These are high quality, clearly written documents that create a favorable impression of actuarial expertise.

The Insurance Accounting and other committees have issued a number of comment letters on accounting pronouncements, most recently relative to IASB Insurance project.

Typically two or three technical colloquia are held each year, in cooperation with member associations or IAA Sections. These colloquia sometimes get the attention of local media. The TF believes these activities are effective and could be made even more effective by inviting the media or the public, and perhaps tailoring part of the content to an audience not composed of technical actuarial content.

AWB is the Actuaries Without Borders section, whose international activities build a positive awareness of the work of the profession in countries with developing markets. Their mission is to promote the public good globally.