What is an Actuary?

1. What is an Actuary? • An Actuary’s job is to calculate expected Insurance Losses. • An Actuary also applies mathematical, analytical, and business skills to help solve a variety of financial problems.

2. Most Common Areas Where Actuaries Work • Insurance Industry • Casualty Actuaries -Property (home) and casualty (car) • Insurance and Reinsurance • Life Actuaries - Life and annuities • Employee Benefit Industry • Pension Actuaries – Defined Pension Plans • Health Actuaries – Health Insurance • Social Security • Financial Industry • Banks, investing, risk management

3. Where do Actuaries Work? • Insurance and Reinsurance companies • Consulting firms • Government insurance departments • Colleges and universities • Banks and investment firms • Large corporations • Public accounting firms • Anywhere else

4. What do the different Actuarial specialties do • Casualty – Project expected claims for auto, homeowners, medical malpractice, Directors & Offices, General Liability • Life – Predict Death Rates, use “force of Mortality” and interest to price products • Pensions – Make sure pension plans are properly funded. Interpret Tax Laws to make sure plans are in compliance.

5. Typical Casualty Actuarial Projects • RATEMAKING - Conducting studies of insurance rates, such as for autos or homes. • RESERVING - Estimating the amount of money to be set aside for insurance claims that have not been paid. • NEW PRODUCT DEVELOPMENT - Calculating a fair price for a new insurance product. • Participating in various aspects of corporate planning, such as mergers and acquisitions. • Forecasting the impact of catastrophes like hurricanes and earthquakes. • Implementing and monitoring investment programs.

6. Jobs Rated Almanac • Actuaries have one of the top jobs in America, according to the 1999 Jobs Rated Almanac.Best Jobs1. Web Site Manager2. Actuary • 2002 AlmanacBest Jobs1. Biologist2. Actuary • Ranking is based on six criteria: Income, Outlook, Security, Stress, Environment, and Physical Demands.

7. Jobs Rated Almanac • Income - Starting salaries range from $41,000 to $53,000 • Outlook - Low unemployment rate, high rate of growth, salary increase, and promotion. • Stress - While the exam process is a source of stress, the overall job satisfaction is high. • Environment - Although actuaries frequently choose to work longer, the normalwork week is about 40 hours. Offices are generally comfortable and pleasant. • Physical Demands - There may be some travel, but actuaries spend most of their time working in their home office.

8. $$ Salary Information $$ • Employers give merit increases to actuaries as they gain experience. • Employers frequently give increases to actuaries as they pass examinations. This can be in form of bonus or percentage raise. • Some companies also offer cash bonuses, salary increases and/or promotions for each professional designation achieved.

9. $$ Earning Potential $$ No. of Exams Range1 $41,000 - $53,000 7 - ACAS $65,000 - $215,000FCAS $95,000 – $360,000+ Compensation may vary significantly according to years of experience, geographic region, and responsibilities.

10. Career Outlook for Actuaries • Employment growth for consulting actuaries is expected to be faster than employment growth of actuaries in insurance carriers. • The development of new financial tools like Dynamic Financial Analysis has increased the demand for actuaries. • The growing ability to model catastrophic risks such as hurricanes andearthquakes will increase the demand for actuaries. • The expected growth in new programs in the health services industry should provide better prospects for actuaries.

11. What Skills are Needed to be an Actuary? • Specialized math knowledge • Calculus, statistics, probability • Keen analytical, project management and problem solving skills • Good business sense • Finance, accounting, economics • Solid communication skills (oral & written) • Strong computer skills • Common Sense

12. 2 Types of Actuaries • Business Actuary – Works with underwriters, brokers, management • Back Room Actuary – Develops models and programming for use by the business actuaries and other management

13. Computer Skills Needed • Typing and Data Entry • Excel and Lotus Spreadsheets • Visual Basic programming for Excel • Word Processing • Database – SQL • Mainframe programming – not as much but good to know the logic of computer programming • SAS – at large companies with large databases.

14. Courses to Take • Calculus • Statistics and Probability • Typing • Accounting • Management Science – Operations Research • Economics • Stochastic Simulation • Visual Basic Programming • Business Law

15. How to Become an Actuary • Casualty actuaries in the U.S. and Canada achieve professional status by passing a set of examinations administered by the Casualty Actuarial Society • Examinations are held twice yearly in the Spring and Fall at various cities in the United States, Canada, and other countries around the world. • Completion of Exam Parts 1-7, and attendance of the CAS Course on Professionalism satisfy requirements as an Associate of the CAS (ACAS). • Completion of all 9 Exam Parts is required to become a Fellow of the CAS (FCAS), the highest mark of distinction a CAS member can achieve.

16. How to get an Interview • On-Campus Recruiting • Send Resume to Personnel Departments at target companies • Recruiters – Not usual for entry level • Do internship • Networking – get to know some actuaries

17. Advice to Students Who Want to be Actuaries • Develop disciplined study habits. • Take a well-rounded curriculum. • Sharpen your communication skills. • Take actuarial exams while in school - the sooner you start, the sooner you will finish.

18. Exams • Currently 9 exams for FCAS designation • Only 30% of students taking an exam will pass • Graded on curve. • Requires 500 to 600 hours of studying to pass • Courses are available but are really just a review of what you already should have studied. • Average time to pass all exams – 10 years

19. Where to find more information www.BeAnActuary.org www.casact.org – Casualty Actuarial Society www.soa.org – Society of Actuaries (life & health) www.actuary.org – American Academy of Actuaries