Actuarial credentials aren't licenses. In the United States, they confer no privileges aside from the ability to sign a particular statement on the condition of a company's loss reserves. This is something that few actuaries will ever need to do.
Actuarial credentials are instead a market-based signaling mechanism, akin to a specialized technical degree. All signaling mechanisms are imperfectly correlated to whatever it is they're signaling for, but in my own experience, it's usually a good bet that an actuary who holds a credential will be more capable than one who doesn't. The market agrees and pays credentialed actuaries a premium. If credentials stopped being an excellent predictor of ability, there would be nothing stopping the market from disfavoring them. Note that there's one highly successful insurance company (Progressive) that has made this call and hires very few actuaries. Most companies wouldn't be able to follow their operating model, but that's a different conversation.
And if the actuarial societies and insurance companies are trying to preserve scarcity of actuarial credentials, they're doing a poor job of it. The test-taking process continue to be well-supported by insurance companies. Junior actuaries typically have all exam expenses paid and are given an additional 25 to 30 extra days off per year to study for exams. The number of credentialed actuaries has exploded (I think more than doubled) in the past decade. There are no quotas and no economic barriers after you get your first job.
I do like your comparison with Michelin-star restaurants. Michelin stars are a signifier of quality. The letters after my name are too.
If the article were instead devoted to exploring the application of similar programs in a different context, perhaps it would have been named "Drive Safe or Else: How Car Insurance Companies Became Obsessed with Tracking Your Speeding Tickets".
There are clear benefits to charging insureds in proportion to risk, especially controllable risk. But of course these benefits need to be weighed against potential negative impacts. There's some discussion here about how to strike the right balance. It may be comforting to learn that actuaries, who design these risk classification programs, and regulators, who monitor and approve them, aren't just making this up as they go along. We're guided by principles, a basic summary of which [0] covers some of the topics discussed in this thread. Of course this only scratches the surface.
It's probably not the section that most of you will be focusing on, but the "Insurance" section seems to be written by someone who doesn't know the industry. Insurers are absolutely already starting to monitor driving habits[1] and offering discounts for home monitoring devices[2]. Large property/casualty insurance companies are sophisticated competitors that don't hesitate to invest in promising new technologies or techniques many years before they pay dividends. The industry is anything but "stodgy".
The idea of a crowdsourced insurance company is not a good one (to put it mildly). The expected returns of an insurer are highly correlated with the returns of the broader market[3], because a typical large insurance company makes little to no money writing policies and generates most or all of its income from investments[4]. But maybe he's thinking about crowdsourcing the insurance risk itself, not the whole insurance company with its massive portfolio of stocks and bonds (although that's not what he said). In that case, you get an investment that yields X% a year until and unless the underlying insurance contract is triggered, in which case you lose your principal. These securities actually exist[5], but as you might imagine they are not typically purchased by individuals.
I do think the insurance industry can be disrupted. It's harder for a startup to gain traction because economies of scale work differently in insurance than they do in other industries, but a Google or an Amazon could do some real damage if they wanted to invest the resources to do so. There are a lot of interesting problems to solve. But this article totally misses the point.
An actuary is someone who does actuarial work. Most people join the profession right out of college. They have no piece of paper other than their degree. They are still actuaries.
A credentialed actuary is someone who has gone through the entire educational system, which are a series of exams that are typically taken while working as an actuary. Credentials and the practice rights that come with them permit an actuary to do exactly one new thing. Only a credentialed actuary can opine on the adequacy of an insurance company's loss reserves (to make sure that the company has set aside enough money for all of the claims it will eventually have to pay).
Not many actuaries issue formal statements of actuarial opinion. All of the other work that we do can be legally done by anyone. There is nothing stopping an insurance company from hiring a large number of statisticians or whatever to do the day-to-day work, only bringing in a credentialed actuary to do the reserve opinion once a year. Companies generally don't do this because actuaries are more than just statisticians; they're business professionals with very deep domain knowledge. Credentialed actuaries command a premium in the marketplace not because of any "regulatory moats", but because the specialized education itself is very valuable. If that ever stops being the case then nothing is stopping the market from correcting itself.
Android is great but God help you if something breaks. Both of my Nexus phones stopped functioning after a year, and I know through very painful experience that after that point product support all but disappears. Presumably all of Google's good engineers move on to the next generation of products as soon as the last generation ships. In any case the pattern is pretty clear. If support is important to you, this is not a company you do business with.
Also a consulting actuary, here for the same reason as you. The number of actuaries replying here is pretty remarkable given the extremely small size of the profession.
As far as I know there is exactly one credentialed actuary working in any capacity in SV, but that number can only go up in the future.
The actuarial profession effectively requires a lengthy apprenticeship before practice rights are granted. A typical actuarial student starts their first entry-level actuarial job with only an undergraduate degree, and then spends the next five to ten years working full time under the supervision of senior actuaries while taking the examinations that eventually lead to being admitted into the profession. I do not know of any other profession that works this way.
Actuarial credentials are instead a market-based signaling mechanism, akin to a specialized technical degree. All signaling mechanisms are imperfectly correlated to whatever it is they're signaling for, but in my own experience, it's usually a good bet that an actuary who holds a credential will be more capable than one who doesn't. The market agrees and pays credentialed actuaries a premium. If credentials stopped being an excellent predictor of ability, there would be nothing stopping the market from disfavoring them. Note that there's one highly successful insurance company (Progressive) that has made this call and hires very few actuaries. Most companies wouldn't be able to follow their operating model, but that's a different conversation.
And if the actuarial societies and insurance companies are trying to preserve scarcity of actuarial credentials, they're doing a poor job of it. The test-taking process continue to be well-supported by insurance companies. Junior actuaries typically have all exam expenses paid and are given an additional 25 to 30 extra days off per year to study for exams. The number of credentialed actuaries has exploded (I think more than doubled) in the past decade. There are no quotas and no economic barriers after you get your first job.
I do like your comparison with Michelin-star restaurants. Michelin stars are a signifier of quality. The letters after my name are too.