Casualty Actuaries of the Southeast
(CASE)
Fall 2005 Meeting
Monday, October 10, 2005
Atlanta, GA
Sally Ezra, Partner
D.W. Simpson & Company
Global Actuarial Recruitment
Changes in the Uses of Technology are
Changing Demand in the Marketplace
Drivers behind the increase in the
demand :
Cheap Computer Power
 Cheap Storage Capacity

Source: Strategic Research, IBM
Most mathematical algorithms have
always existed (more or less), but it is the
affordability of the technology that is
allowing advances to be made now.
- From the Press Uses of Emerging Technologies
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According to research firm Conning, 92 percent of the largest U.S.
insurers look at credit scores to determine whether to write new
policies.
http://www.business2.com/b2/web/articles/0,17863,1103386,00.html
Source: Business 2.0, Finding Riches in a Mine of Credit Data, by Matthew Maier, October, 2005

"Two years ago, when we brought up the subject of predictive
modeling to an insurance CEO, his eyes would glaze over," says Dax
Craig, president, CEO and founder of Valen Technologies Inc., a
Denver-based provider of risk-based predictive modeling and analysis
tools to the property/casualty market.
"But in a short amount of time, there's been a sea change with
insurers about understanding the value of predictive modeling," he
adds….”a dynamic predictive modeling solution offers a high level of
transparency, and gives insurers a reason for not only how-but why-a
risk is high or low. When insurers see this, adoption goes way up.“
http://www.insurancenetworking.com/protected/article.cfm?articleId=2984&pb=ros
Source: Insurance NetworkingNews, Analyze This, By Steve Dwyer, Senior Editor, February 1, 2005
- From the Press Uses of Emerging Technologies (cont.)

Computing grids are software engines that pool together and
manage resources from isolated systems to form a new type of lowcost supercomputer. In spite of their usefulness, grids remained the
plaything of researchers for many years. But now, in 2005, grids
have finally come of age and are becoming increasingly
commercialized.
http://www.betanews.com/article/Interview_The_Future_in_Grid_Computing/1109004118
Source: BetaNews, Interview: The Future in Grid Computing, By David Worthington, February 21, 2005
More about grids:

Nationwide is running numerically intensive actuarial calculations on
50 desktops instead of on a single server. In doing so, the company
has cut computation time on one process from 36 days to 26 hours.
http://www.computerworld.com/industrytopics/financial/story/0,10801,95800,00.html
Source: Computer World, Sidebar: Making the Case, Patrick Thibodeau, September 13, 2004
Supply and Demand: An Overview
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In rough terms, nearly 80% of the P&C jobs we have are
traditional pricing, reserving, personal lines, commercial
lines, consulting, reinsurance jobs
20% of our P&C jobs are looking for some level of
experience working with technology that can still be
considered emerging
In rough terms, again, around 90% of our P&C candidates
have more/less traditional actuarial skills; many of those
skills were considered non-traditional, but are considered
more mainstream now
10% of our P&C candidates have experience with emerging
technologies, and 30% of those candidates are not
interested in continuing with exams
Excerpts from emails our firm has
received over the past 2 weeks:

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Ideally, the candidate will be familiar with predictive modeling
techniques to identify profitable niches within the small commercial
marketplace.
Predictive Modeling: someone with consulting or insurance company
experience who has both a handle on the underlying statistical theory and
experience with practical implementation issues.

Do you know any candidates with RMS modeling skills? They do not have
to be actuaries. Please let me know if you know any who are looking.

We are looking for someone who can be in front of customers and has a
dynamic personality. Someone who is enthusiastic and passionate.

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Candidates should have very strong experience with current data mining
technologies (structured and unstructured data) and methodologies and/or
algorithm development/analytic skills.
Our internal capital allocation model has become cumbersome, and we
need someone who has both the ability to develop the models and also to
work on an interdisciplinary team to determine how to go about it. This
person cannot be a backroom actuary.
Skills in Demand, 2005
MODELING
MODELING
MODELING
GLM
Cat Modeling
ERM
Generalized Linear Modeling (GLM)
European, UK and Australian companies
using Predictive Modeling since early to
mid 1990’s. Became a predominately
requested skill in the US only about 2
years ago
 Personal Lines Carriers – A lot of data
available
 Commercial Lines Carriers – Only when
significant amounts of useful data are
available

Software Developers and Consultants
 Developers, Modelers, Users

Catastrophe Modeling
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Mega Cats such as Hurricane Andrew, and man made Mega
Cats, i.e., 9-11
The 2004 hurricane season brought CAT Modeling skills
back in spotlight; Katrina had an immediate impact immediate increase in demand
Who is using Cat Modeling tools?
Who is looking to add actuaries in the pursuit of modeling
Cats? All primary carriers, reinsurers, consultants, brokers,
and to a lesser degree, the modeling agencies / providers
What Cat Modeling package experience are we seeing in
demand? RMS, AIR, and Equecat
Enterprise-Wide Risk Management

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DFA – Then and Now
Began as a P&C focused tool, but has been more
widely used by life insurance companies
S&P – has just announced it will be implementing
ERM to assist in analyzing companies’ financial
stability
Insurance companies are using ERM and Capital
Allocation Models limber enough to model their
company (enterprise) a specific book, or even an
individual account or line of business
ERM skills in demand
Overall Impact on Hiring
 Shortage
of skills in these emerging,
non-traditional markets
 How
to hire a candidate with strong
modeling skills in today’s market
where demand considerably
outweighs supply
How To Increase The Flow of
Candidates
Ask yourself:
– What is the true minimum years of experience with
___________ I need?
– What soft skills do I need?
– What are my absolute minimums if the candidate is
perfect in other ways and has a true passion for the
work?
– Can my company transfer a visa or do a TN Visa?
– Am I being realistic? Does this candidate exist?
What’s Hot?
 Any
Modeling Experience
 Client
facing, internal & external
 Developers (fear of being typecast as a programmer
should no longer exist)
 Ability
teams
to work with multi-disciplinary
Skills Always in Demand:

Able to discuss very technical matters to non-actuaries and to people at all
levels of experience and understanding

Being a business savvy actuary – must be multidimensional rather than
just technical

Strong exam passing record

Solid work history and career progression

Strong software skills

Strong software skills

Work independently and lead projects; effective follow-through skills

Team player with a strong work ethic
Conclusions
Questions?
Sally Ezra, Partner
D.W. Simpson & Company
Global Actuarial Recruitment
www.dwsimpson.com
sally.ezra@dwsimpson.com
800-837-8338 ext. 234