What is an Actuary

1
What is an Actuary?

• An Actuarys 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 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 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 and earthquakes 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