Inside the Mind of an Actuary: Why Mutual Life Insurance Wins

Generally where you see financial risk, there's a good chance you'll find an actuary very prominent in life insurance industries, health insurance industries, home auto insurance, any sort of property insurance industry. You'll also find a lot of actuaries in the pension industry. Again, wherever there's some sort of contingent event that can be predicted with a reasonable amount of accuracy and there's a financial implication to that event happening or were not happening, that's something that's well suited for an actuary to take a look at. And so we're trained in finance statistics and probabilities and we kind of stir it all together to be able to price risk. Insurance really is sort of a means of sharing risk across a large group of people. And so as an actuary, I sometimes get asked when I go to a party, a dinner party or something like that, well, can you tell me when you're, when I'm going to die? And I say no, but if there were a thousand of you, I could tell you how many would die this year, just not which ones. And so it's the ability to predict with the law of large numbers and then quantify financial impacts. I came into the profession very fortunate in high school, typical high school student. Not sure what I wanted to do. It was becoming very clear I wasn't going to make the NHL by that point, which was fascinating. That's a really interesting industry. And I also did an internship with a pension consulting firm. And so between those, was much more interested in insurance and so said this, this is something I could enjoy and see myself doing. And life insurance was appealing to me like the long nature, duration. There's a very heavy financial investment component to life insurance as opposed to something like auto insurance, where you're pricing it year by year. It's, it's kind of a shorter horizon. And so those things led me to be quite interested in the life insurance space and was able to secure a, a permanent position right after graduation. And off I went.

Wow, amazing. And so you, you, you found yourself obviously in knee deep in the industry and then you moved your way up the ranks. And when you delve deeper into say, the life category, I mean, you spent 17 years with a major company. What were some of the things that you found? I mean, we all go through stages of growth as we move through our careers in life. What are some of the things that kept you fascinated and motivated and interested in the changes that you've seen over your 20 years in the industry?

I take time from, from time to time to remind myself about how important life insurance is to protecting people, protecting their families in addition to the other types of insurance that we provide. And so the human element really was a bit of a surprise coming into it. I got into it for the math, but stayed for the people, I guess you could say. And how would you like to see.

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And then just the whole business element, you get exposed to technology, distribution, all sorts of things. And so it's a really big world. And so that really has led to a fulfilling career for me. You know, I still get to do a little bit of math here and there, but it's become smaller and smaller part of my day and the business aspect, the human element and are what keep me engaged.

Yeah, incredible. And so now you find yourself, of course with one of my favorite companies and that's Equitable Life of Canada and being, you know, Canada's largest mutual insurer. And that, that's something that I think a lot of people don't, certainly in Canada maybe don't even know what that is. I mean our viewers will have a much better insight there. But for folks that are watching who are maybe newer, this is their first time, maybe expand a little bit on what exactly does it mean to be mutual and then why would that be important for people to understand?

Yeah, so mutual organization is generally mutual insurer, to be specific. A mutual insurer is an insurance company that is owned by its policyholders, its participating policyholders, the capital provided by the policyholder in the form of the premium payments. Because again, these are very long duration products, there's enough premium at the outset to fund all the capital that we need. That means we don't need shareholders. And so the mutual is owned by the PAR policyholders because they've provided the capital for the organization, which means they get the profits of the organization. And we are beholden only to the policyholders. We don't have to split our focus between providing value for our clients and maximizing profit for shareholders. We only have one stakeholder. So being subject only to having to provide value for policyholders, we think gives us a great model and a great alignment of interest to provide great service for our clients who are also our owners.

Yeah, I think that's an amazing description. And so taking that one step further, and you know, I'll confess, I'm. I'm an owner. I'm one of those par owners and as is my wife and my. My children. Although they have policies that I own, they will one day be owners themselves. So what. What does that look like from a. You said not being beholden to other people, and then you also talked about service. So from equitable standpoint, or even just in general from a broad scope, because there's many other mutuals in there, not so much in Canada, but certainly we have large base of folks from the America America watching us here, and they have a lot of mutuals down there. What do you think are some of the common themes that develop at the mutual company level versus a company that, let's just say, is owned by stockholders instead?

We're very, very focused on providing great service for our clients, and we view it as our main differentiator. And we're able to just really focus on service and maximizing value for our clients, and we're not being pulled in multiple directions. That's all day, day.