Betsy Wellington's Actuarial Career Presentation #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.
Most Common Areas
Where Actuaries Work
Insurance Industry
 Casualty Actuaries
-Property (home) and casualty
Insurance and Reinsurance
 Life Actuaries
- Life and annuities
Employee Benefit Industry
– Defined Pension Plans
 Health Actuaries – Health Insurance
 Social Security
 Pension Actuaries
Financial Industry
 Banks,
investing, risk management
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
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.
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
Implementing and monitoring investment programs.
Jobs Rated Almanac
Actuaries have one of the top jobs in America, according to
the 1999 Jobs Rated Almanac.
Best Jobs
1. Web Site Manager
2. Actuary
2002 Almanac
Best Jobs
1. Biologist
2. Actuary
Ranking is based on six criteria: Income, Outlook,
Security, Stress, Environment, and Physical Demands.
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 normal work 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
$$ Salary Information $$
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.
$$ Earning Potential
No. of Exams
$41,000 - $53,000
7 - ACAS
$65,000 - $215,000
$95,000 – $360,000+
Compensation may vary significantly according to years
of experience, geographic region, and responsibilities.
Career Outlook for Actuaries
Employment growth for consulting actuaries is expected to
be faster than employment growth of actuaries in insurance
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 and earthquakes will increase the demand for
The expected growth in new programs in the health
services industry should provide better prospects for
What Skills are Needed
to be an Actuary?
Specialized math knowledge
 Calculus,
Keen analytical, project management and problem
solving skills
Good business sense
 Finance,
statistics, probability
accounting, economics
Solid communication skills (oral & written)
Strong computer skills
Common Sense
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
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.
Courses to Take
Statistics and Probability
Management Science – Operations Research
Stochastic Simulation
Visual Basic Programming
Business Law
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.
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
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.
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
Where to find more information – Casualty Actuarial Society – Society of Actuaries (life &
health) – American Academy of