A Global Certification Solution

By: Douglas R. Kelly

In November 2009, 14 actuarial associations from 12 countries came together in Hyderabad, India, to create an international certification program. But the groundwork began long before then. Take an inside look at the process of collaboration and compromise that created a high-quality certification program with global reach.

Associations that institute standards and credentials know how difficult it is to get all players to agree to a common set of rules. A requirement that makes perfect sense to one stakeholder may have negative repercussions for another; the educational requirements called for by one group are perceived as threatening by others. The horse trading and consensus building involved can take years.

Unsurprisingly, getting similar consensus to happen across international borders is exponentially more difficult. That's why the Illinois-based Society of Actuaries chose to use a specific model of development when it decided to take one of its certification programs global, a model that has enabled the association to hit the ground running as it enters those international markets.

Immediate Reaction

When SOA launched its Chartered Enterprise Risk Analyst credential in June 2007, the association began hearing from actuaries and colleagues in other countries. "When SOA launched the CERA program, other actuarial organizations in other countries immediately said, 'This is a great idea,'" says Mike McLaughlin, past president of SOA and a principal at Deloitte Consulting LLP. "A group led by some of the representatives from the international actuarial association said, 'Let's take this thing global.'"

SOA's 21,000 member actuaries around the world are professionals who model and manage financial risk and contingent events. Those who earn the CERA credential, which is focused on enterprise risk management, do so by navigating a rigorous and thorough program of study and exams. CERA enjoys a reputation in the industry as a high-caliber designation that's challenging to obtain; the decision makers at SOA wanted to ensure that this high standard would be maintained in the event CERA expanded into global markets.

"Everybody had a little bit different way of doing this," says McLaughlin. "We wanted to have a CERA credential with the same standard of quality around the world. So it would be no good if we had the Society of Actuaries offering CERA [to our rigorous standards], but elsewhere you could get the credential very easily. Quality control was a recurring theme—that some organizations would make the credential too easily obtained, which would dilute the quality of the credential, and we could not have that. There was no negotiating around that point. Also, a few organizations wanted to make the CERA credential much more difficult to obtain. Consistency was important to the SOA."

Frank Sabatini, an actuary with more than 30 years of experience and principal at Sabatini Advisory Services LLC, worked as an SOA delegate to a global committee that was formed to evaluate the viability of taking CERA global. "When I joined that committee, I'm not sure SOA thought that globalizing the credential was a great idea," says Sabatini. "I know that the international group thought it was. I really believed it was something we should do. So I had two challenges: I wanted to convince the SOA that it was a good idea and, at the same time, steer the international group in a way where they would support some of the things that were important to the SOA."

It became obvious that resolving the quality-assurance issue was job one for SOA. The U.S. launch of the CERA program had been managed by Ken Guthrie, SOA's managing director of education. It was logical to look to his expertise and knowledge of the program in addressing the quality question. "When the global CERA syllabus committee reached a point of agreement and said, 'This is what we want the program to teach. These are the learning outcomes we're targeting,'" says Guthrie, "my involvement was then to establish a quality-assurance mechanism that would work globally to enable different approaches, different methods of education, different assessment tools, even different language systems, but all generating the same overall set of outcomes. We wanted some sort of mechanism around that, one that we felt was robust enough to work.

"The lack of control [of the quality standards] is crucial," he continues, "because as soon as you sign that treaty, you're a party to the overall process, so you're as strong as your weakest link. Because we're already out there in the market, we had the most to lose had this process not been a success."

CERA Goes Global

On November 14, 2009, in Hyderabad, India, a multilateral treaty was signed by 14 actuarial associations, making each organization a signatory to an agreement to offer the CERA credential in its own country. (The number now is actually 13, as two organizations in the United Kingdom have since merged.) The signatory associations created a separate entity—the CERA Global Association, based in Zurich—which is governed by a board and acts as the CERA international governing body. This association contracts with the U.K. Institute and Faculty of Actuaries, which provides administrative support to the Swiss organization.

Getting the various international players to agree on the structure and policies of a global version of CERA was no small feat. "It was kind of a Herculean effort," says McLaughlin. "The person who led that, who has to get credit for it, is Fred Rowley, former president of the Institute of Actuaries of Australia. He coordinated all the different organizations."
Rowley also serves as chair of both the treaty board and the board of the CERA Global Association. "My role in the project was initially to facilitate the relatively complex agreement between those 14 associations," he says, "and this often involved negotiating with the associations individually, particularly SOA."

To address the quality issue, SOA and the group developed an in-depth, three-level review process. First is an initial and very comprehensive review that occurs when a signatory organization applies to the treaty board to offer the CERA credential. If the organization passes this initial review, it is given award signatory status and may begin offering the CERA credential within its country.

The second level is an annual review, in which the award signatory is assessed at the end of each year by two external reviewers, who combine their findings in a detailed report that is given to a review panel and then to the board.

At the end of every three-year period, there is another comprehensive review. This three-year review is modeled on the initial review, going into great detail to ensure conformance with the standards that were set at the beginning and also to ensure that any commitments made regarding improvements or upgrades have actually been fulfilled. "The three-year review is a comprehensive 'reset,'" says Guthrie, "in which we ask, 'You've been operating as an award signatory for three years. What issues have you faced and how have you addressed them?' We're taking a best-practices-type approach—here's an organization that had this challenge and here's the way they overcame it. Other organizations may not have had that challenge yet, but we see this as a very good response to that. So we now publicize that around the grid to make sure we all start incorporating this approach, to alleviate the possibility of that particular problem emerging."

The key to the success of this approach is the fact that the review process involves all of the treaty partners. Rather than having the reviews done by a third party, the 13 organizations—a number that will grow as more partner associations are added—all regularly assess other award signatories to ensure that all are consistently meeting the same set of standards.

Who Owns It?

Another challenge SOA faced in taking CERA global was the nature and management of the trademark. Because intellectual property law varies so widely from country to country, determining how to structure ownership became a multilayered problem. Richard Veys, general counsel to SOA, says the credential represents a "certification" mark, which is a form of trademark registered with the United States Patent and Trademark Office.

"SOA had begun the process of registering that mark in other countries," says Veys. "Because the credential is a certification mark, ownership of that credential was going to present an interesting challenge as we tried to work cooperatively with 13, 14, or potentially more actuarial associations. We had to resolve the question of where would the ownership of the credential, of the intellectual property, reside. Also, trademark regimes around the world are not identical, so taking a mark global requires a scan of all of the trademark requirements and recognition of certification marks throughout the various countries where it might be put into use."

A key part of the solution to these challenges was that SOA transferred ownership of the intellectual property to the new association in Switzerland. This effectively gives all of the participating signatories, present and future, a seat at the table in terms of ownership of the global CERA credential.

Benefits of the Approach

The model used by SOA—identifying and working with similar organizations in other countries—has proved successful thus far in establishing an international presence for a key credential. The other option for developing such a presence would be for an association to try to enter global markets on its own. This might afford greater control over issues like quality assurance and educational content, but by definition it means the association will be starting at square one in terms of local expertise and recognition in those countries.

For smaller associations, a partnering model may be the only viable option. "There's clearly more than one strategy for doing it," says Veys, "but I think that partnering with associations outside its borders is the only way, strategically, for a smaller organization to pursue this kind of global venture."

Mike McLaughlin has no doubts about the model SOA has pursued: "To market and build a brand in the U.K., in Australia, in China, and so on, how would we ever do that? That was part of the original thinking, that we go country by country, spread the message around the world, but the approach we've taken here with this group is really faster and better."

In addition to potential revenue that can be generated for an association, a global presence for a credentialing program benefits partners in other countries. "Our partners have gained an enormous leapfrog in time and effort to develop this credential," says McLaughlin. "It was years of work and dozens, if not hundreds, of volunteers, and so SOA actually has provided not only the experience and the knowledge but also guidance regarding the definition of the learning objectives, identification of material that should be covered, examination guidance, reading material guidance, and so on. We've also shared the intellectual property, the branding, the licensing of the name in several countries. We've saved them years and huge amounts of effort."

In Sweden, establishing the education program has proved to be the biggest challenge so far. Malcolm Campbell, who is with Svenska Aktuarieföreningen, one of the 14 original signatories, says that demand for credentials such as CERA is comparatively small: "In Sweden, credentials themselves carry little weight, but a key benefit of the global CERA credential for Swedish actuaries is the ability to move between countries and demonstrate competence." Campbell also is a member of the CERA Global Association, as well as of the review panel that assesses applicant associations. "The power of the credential," he says, "is its true globalization."

Douglas R. Kelly is editor of the Society of Naval Architects and Marine Engineers' Marine Technology magazine. Email: streamlux@yahoo.com

Sidebar: CERA Players

The original 14 signatories to the Chartered Enterprise Risk Analyst international credential treaty, signed in India in November 2009, are now actually 13 following the merger of two associations in the United Kingdom:

  • The Institute of Actuaries of Australia
  • Canadian Institute of Actuaries/Institut Canadien des Actuaires
  • Deutsche Aktuarvereinigung e.V. (Germany)
  • Institut des Actuaires (France)
  • Israel Association of Actuaries
  • Institute of Actuaries of Japan
  • Colegio Nacional de Actuarios, A.C. (Mexico)
  • Het Actuarieel Genootschap (Netherlands)
  • Actuarial Society of South Africa
  • Svenska Aktuarieföreningen (Sweden)
  • Institute and Faculty of Actuaries (United Kingdom)
  • Casualty Actuarial Society (United States)
  • Society of Actuaries (United States)

Sidebar: Starting Points

There's a whole lot more to taking your credential global than translating materials into Korean or Spanish. Think about these make-or-break factors before you move ahead on the international track:

Identify the need. Associations come in all flavors, and what works for one may be a dead end for another. Listening to your colleagues and counterparts in other countries is a good start; it may be that they're eager to start offering your program in their part of the world. On the other hand, if your members are not particularly mobile when it comes to their careers—if they have no need for their professional credentials to be recognized in another country—going the international route may be a bust, and an expensive one at that.

Honestly assess your space. Cultures differ, both for countries and for organizations. Do your members play nice with one another? Is collaboration valued among your volunteer committees and board of directors? Now take the answers to those questions and overlay them on meetings and negotiations with colleagues in other countries.

Ensure quality. Your credential—your brand—has value. Going it alone, into another country, may afford greater control of your brand, but if you decide to collaborate with associations in those other countries, are you prepared to give up some measure of control? How will you and your team ensure that the caliber and quality of your program will be maintained?