Harpreet Chowdhary is a woman of Sikh background, whose family comes from a small town in the Punjab (Northern India). She was born in England, grew up in Canada, and did her doctoral work at the University of Wisconsin-Madison with a dissertation on "Infinite Bump Solutions to Semi-Linear Elliptic Schroedinger Equations." After marrying a fellow mathematician, they moved to Boston, where she now works as a research actuary at the largest workers' compensation insurer in the country. She is responsible for the insurance pricing models used in her company; she has written or co-authored several papers on actuarial science; and she teaches the Advanced Dynamic Financial Analysis seminar for the Casualty Actuarial Society, the national society of actuaries.
Until recently, executives of insurance companies were men, and even now women must prove their worth as corporate officers, sometimes foregoing children while they work additional hours at their companies. Women are often judged by their willingness to conform, whether to the golf and club events of their male colleagues or to the high heels and business attire of their firm.
But Dr. Chowdhary does not conform to her company; her company conforms to her. When I met her in her office, she was wearing modest trousers, sweater, and comfortable shoes; there was not a trace of the sharp styles associated with the corporate dress code. As the mother of a three-year old daughter, and expecting another child, Dr. Chowdhary works half the week in the office and the other half from home. Her husband has a similar arrangement, and they share the child-raising duties and household tasks.
As a postdoctoral fellow at Dalhousie University in Halifax, Nova Scotia, Dr. Chowdhary lectured in mathematics for two years. She developed the skill of making abstruse concepts understandable even to students with little mathematical background. She enjoys teaching and research, but she wanted the opportunity to apply sophisticated mathematics to complex business problems, leading to her second career as an actuary.
One thinks of actuaries as insurance accountants: looking up values in tables and calculating premiums, accident frequencies, or mortality rates. But Dr. Chowdhary does not enter values into models; she builds the models that other actuaries use. She applies her knowledge of stochastic differential equations to build financial models of an insurance company's operations, including the random loss fluctuations of auto accidents and workers' compensation injuries, the Brownian motion of stock prices and interest rates, and the uncertainties of medical inflation and business cycles.
Over this past year, Dr. Chowdhary has co-authored a series of papers on insurance pricing models, which she is now turning into a textbook for casualty actuaries. She has been explaining insurance pricing to the other officers of her firm, and she has been traveling to actuarial conventions and seminars to give presentations on financial pricing, capital allocation, and performance measurement.
Twenty years ago, advanced mathematics would have been of little use to the practical businesswoman. When companies built models of future stock prices, bond prices, and inflation rates, they sought the economic causes of future changes. Inflation may reflect an oil shortage, excessive government spending, or an infusion of money into the economy by the Federal Reserve Board. Companies sought economists who might predict movements of inflation rates and interest rates by their expertise in economic causes.
But economic models have limited value; even when they predict just the direction of inflation rate movements, economists are right only half the time. Stock prices, interest rates, and inflation rates are now thought to follow random walks; unusual movements which are random and can not be predicted. Theoreticians now model stock prices and interest rates as stochastic diffusion processes, much like the Brownian motion of gases within a closed container.
Brownian motion is best modeled by stochastic differential equations, and Dr. Chowdhary's expertise in this subject has enabled her to form models of insurance companies and the insurance industry. She builds her models with a combination of Excel spreadsheets and more sophisticated simulation software. Her presentations show the probabilities of different outcomes in a variety of scenarios. As the software becomes more complex, her expertise becomes even more valuable.
Teaching mathematics to graduate students is different from explaining mathematical models to corporate officers. Mathematicians prize elegant proofs; they especially value results that are not intuitive but are logically correct. A university lecture must be sound; simplifications that leave out essentials are not appropriate; visual aids and graphics are sometimes distractions. But a corporate presentation must be intuitive and the application must be useful; simplifications are essential, as are visual aids and graphics that help the audience grasp the concepts. Above all, Dr. Chowdhary strives never to appear as though she knows more than her audience, who are often the executive officers of the company.
Although Dr. Chowdhary was determined to be a mathematician, and no stereotypes could limit her ambition, other women immigrants from traditional cultures were often discouraged. Sikhs have formed small, family-owned businesses wherever they have emigrated, but few Sikhs (and very few Sikh women) have risen as prominently as Dr. Chowdhary has in the U.S. insurance industry.
Dr. Chowdhary's mathematical skills have propelled her to prominence in her career. She encouraged me to strive for excellence in my studies, never to relinquish my love of math, and to apply even complex subjects to real world problems. The actuarial career is wonderful for mathematicians; as she says, "What other business career gives one an opportunity to use differential equations?" She has shown me that a mathematician can succeed without giving up anything as a woman, a mother, or a human being.
About the Student: My name is Esther Feldblum, and I am a senior at Maimonides School in Brookline, Massachusetts. I am fascinated by all mathematics (from algebra to trigonometry to calculus); but although no courses are offered in these subjects at my school, my particular interests lie in economic analysis and the application of statistics. I have always wondered how a future degree in mathematics can be turned into a successful business career; my interview with Dr. Chowdhary provided a wonderful incentive for pursuing my mathematical interests.
* Name changed at the request of interviewee.