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
Actuaries -Property (home) and casualty
Insurance and Reinsurance
Actuaries - Life and annuities
Employee Benefit Industry
Actuaries – Defined Pension Plans Health Actuaries – Health Insurance Social Security
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 earthquakes. 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 office.
$$ Salary Information $$
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 1 7 - ACAS FCAS Range
$41,000 - $53,000 $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 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.
What Skills are Needed to be an Actuary?
Specialized math knowledge
Keen analytical, project management and problem solving skills Good business sense
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
Calculus Statistics and Probability Typing Accounting Management Science – Operations Research Economics 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
www.BeAnActuary.org www.casact.org – Casualty Actuarial Society www.soa.org – Society of Actuaries (life & health) www.actuary.org – American Academy of Actuaries