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Be An Actuary A Career Without Boundaries

Learn about the actuarial career and how it offers opportunities in diverse industries. Discover the skills needed, job outlook, and earning potential in this high-demand profession.

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Be An Actuary A Career Without Boundaries

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  1. Be An ActuaryA Career Without Boundaries About an Actuarial Career Brought to You By: Presented By: Rob Curry, FCAS ISO Phone: 201-469-2674 email: rcurry@ISO.com Brought to You By:

  2. Overview • My Background • What is an Actuary? • Where do Actuaries work? • What do Actuaries do? • Why become an Actuary? • What is the career outlook? • What skills and talents are needed? • How can you become an Actuary?

  3. Background • Rutgers Grad • BS Math • How did I find out about the profession • Fellow of CAS • ISO • Property/Casualty • Not an insurance company • Provide data and analytics to insurance industry • www.iso.com

  4. What is an Actuary?An Actuary is a person who: • Analyzes, manages and measures the financial implications of future risk. • Develops and validates financial models to guide decision making. • Typically an actuary uses data from the past to predict the future • Driving a car by looking in the rear view mirror • Need to quantify how the future will be different from the past • Impact of large increases in price of gas on auto insurance costs

  5. Most Common Industries Where Actuaries Work • Insurance Industry • Property (home) and casualty (auto) • 4,000 actuaries • Life and annuities • 18,000 actuaries • Employee Benefit Industry • Retirement benefits • Health benefits • Social Security • Financial Services Industry • Banks, investing, risk management • Mergers & Acquisitions

  6. Typical Actuarial Projects • Life Insurance: Designing and pricing life insurance products • Impact of AIDS on mortality tables • Property & Casualty: Estimating the cost of personal auto or homeowners insurance in a particular area. • Global Warming Impact • Health Benefits: Setting HMO premium rates. • Retirement Systems: Pricing the cost of increasing retirement benefits

  7. Interesting Actuarial Problems • Property/Casualty Actuary • Automobile Insurance and Credit Scores • Catastrophe Insurance Coverage – wildfires, hurricanes, earthquakes, etc. • How to account for population shifts or rare events

  8. Example of an Actuarial Problem • IPOD Insurance • What are some factors that you would consider for deciding what to charge for IPOD insurance • Same Price for everyone? • Why not? • Does location matter? • What do you think you are getting by buying IPOD insurance?

  9. Why Become an Actuary? • Use your math expertise to solve real world problems • High earning potential • No cost of graduate school – “learn while you earn” • Typically given paid time off to study for exams • Advance by examinations – no “glass ceiling” • Skills are highly transferable to other industries and job responsibilities • Newsworthy projects • High demand – less sensitive to economic cycles • Job security; need expected to grow • Overall, a highly ranked profession

  10. Jobs Rated Almanac • Actuary was rated the #2 job in America, according to the 2002 Jobs Rated Almanac. • #1 Biologist • - #2ACTUARY • - #3 Financial Planner • - #4 Computer Systems Analyst • - #5 Accountant • - #6 Software Engineer • - #7 Meteorologist • - #8 Paralegal Assistant • - #9 Statistician • - #10 Astronomer

  11. Jobs Rated Almanac (cont.) • Actuary has been rated as one of the top five jobs in each of the six editions published since 1988. • Actuary has received the #1 job rating twice! • Ranking is based on 6 factors: Income, Outlook, Stress, Environment, Physical Demands and Security

  12. Salary Information • Starting salaries of $41,000 - $52,000 (with one exam and no experience) • Merit increases • Examination increases • E.g. $2,500 per exam at ISO • Increases for professional designations Source: D.W. Simpson & Company, Inc., 2006 Salary Survey

  13. Earning Potential Average Actuarial Salaries Years of Experience Note: Compensation may vary significantly according to years of experience, geographic region and responsibilities. Source: D.W. Simpson & Company, Inc., 2006 Salary Survey

  14. Career Outlook for Actuaries • Employment growth for consulting actuaries • Development of new financial tools • Growing ability to model risks • Data Mining/GLM/Neural Nets • Growth in the health services industry • Growth in risk management

  15. Disadvantages of the Career • Difficulty of the examination process • Only about 40% pass ratio for each exam • Huge time commitment, 200+ hours per exam • Length of time to complete exams • 7-9 years • Some people never do )-: • Frustrating, yet challenging problems • Narrow field with high degree of specialization • Consolidation of Insurance Companies • May need to work several years on routine projects before you get the “sexy” ones

  16. What Skills are Needed to be an Actuary? • Knowledge of math and finance • Computer skills • Keen analytical, project management and problem solving skills • Solid communication skills (oral & written) • Good business sense • Ability to see and/or argue both sides of an issue.

  17. How to Become an Actuary • Like a doctor or lawyer, an actuary achieves professional status by passing examinations to prove a certain level of knowledge. • Actuarial examinations are administered by the Casualty Actuarial Society (CAS) and Society of Actuaries (SOA). Three of the first four exams are administered jointly. • Examinations are held twice a year (1/P – four times/year) • Two professional designations exist for each organization: • Associate (either ASA or ACAS) • Fellow (either FSA or FCAS) • You can earn while you learn - employers support actuarial trainees taking exams by providing exam study time on the job.

  18. Preliminary Education Structure • Prerequisites • Calculus • Linear Algebra • Validation by Educational Experience (VEE) • VEE credits are obtained through college courses (B- or higher), standardized exams and approved educational experiences for: • VEE- Applied Statistical Methods • VEE- Corporate Finance • VEE- Economics http://www.soa.org/education/education-redesign/edu-validation-by-educational-experience.aspx

  19. Preliminary Education Structure • Preliminary Examinations • Joint Exam 1/P: Probability • A. General Probability • B. Univariate Probability Distributions: binomial, negative binomial, geometric, uniform, hypergeometric,Poisson, exponential, Pareto, normal, chi-square, beta, lognormal, gamma, and Weibull • C. Multivariate Probability Distributions • Joint Exam 2/FM: Financial Mathematics • A. Interest Theory • B. Finance

  20. CAS Exams • In addition to the preliminary education, each society has additional requirements to achieve professional designations • CAS total of 9 Exams (1-7 for Associateship) • 3 – Statistics and Actuarial Models • Soon to be two separate exams (one part joint with SOA) • 4 Construction & Evaluation of Actuarial Models (Joint with SOA) • 5 – Intro to Property & Casualty Ratemaking • 6 – Reserving, Accounting, Reinsurance • 7 – Regulation, Taxation, Annual Statement • 8 – Investments and Financial Analysis • 9 – Advanced Ratemaking, Rate of Return

  21. Advice for Students Who Want to be Actuaries • Develop disciplined study habits. • Acquire a well-rounded curriculum, including classes approved for VEE credit. • Sharpen your communication and general business skills. • Take actuarial exams while in school - the sooner you start, the sooner you will finish. • Find an actuarial internship. • Familiarize yourself with Insurance Issues

  22. Advancing Diversity • Minority Students: • African American, Latino, or Native American • Scholarships for Minority Students • Individual awards of $500 - $3,000, annually • Demonstrated performance and commitment • Exam Fee Reimbursement for Minority Students • Reimbursed for successfully passing Exam P/1 and/or FM/2 • Visit the website www.BeAnActuary.org Minority Programs: Scholarship applications, exam fee reimbursement forms, internships, and more.

  23. Actuarial Jokes • Wanted to be an Accountant but… • How do you know that you are talking to an outgoing Actuary… • How many actuaries does it take to change a light bulb…

  24. Questions and Answers To learn more about the actuarial profession, exams, and internships, visit BeAnActuary.org Casualty Actuarial Society - www.casact.org Society of Actuaries - www.soa.org

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