Be An Actuary A Career Without Boundaries
About an Actuarial Career
Presented By:
Brought to
You By:
Rob Curry, FCAS
ISO
Phone: 201-469-2674 email: rcurry@ISO.com
Brought to You By:
Overview
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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?
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
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
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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
Typical Actuarial Projects
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Life Insurance: Designing and pricing life
insurance products
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Property & Casualty: Estimating the cost of
personal auto or homeowners insurance in a
particular area.
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Impact of AIDS on mortality tables
Global Warming Impact
Health Benefits: Setting HMO premium rates.
Retirement Systems: Pricing the cost of
increasing retirement benefits
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
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?
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
Jobs Rated Almanac
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Actuary was rated the #2 job in America,
according to the 2002 Jobs Rated Almanac.
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#1 Biologist
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#2 ACTUARY
#3 Financial Planner
#4 Computer Systems Analyst
#5 Accountant
#6 Software Engineer
#7 Meteorologist
#8 Paralegal Assistant
#9 Statistician
#10 Astronomer
Jobs Rated Almanac (cont.)
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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
Salary Information
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Starting salaries of
$41,000 - $52,000
(with one exam and no experience)
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Merit increases
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Examination increases
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E.g. $2,500 per exam at ISO
Increases for professional
designations
Source: D.W. Simpson & Company, Inc., 2006 Salary Survey
Earning Potential
Average Actuarial Salaries
$250,000
$200,000
1 Exam
4 Exams
7 Exams
Fellow
$150,000
$100,000
$50,000
$0
0.0 - 4.5
4.6 - 9.5
9.6 - 14.5
14.6 +
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
Career Outlook for Actuaries
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Employment growth for consulting actuaries
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Development of new financial tools
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Growing ability to model risks
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Data Mining/GLM/Neural Nets
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Growth in the health services industry
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Growth in risk management
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 )-:
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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
What Skills are Needed
to be an Actuary?
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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.
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.
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/educationredesign/edu-validation-by-educationalexperience.aspx
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
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
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
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.
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…
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