Actuarial Science at UW-Madison by byrnetown71

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									Consider a Career as an Actuary

            Presenter 1, XYZ Insurance Company

            Presenter 2, UW-Madison actuarial
    About XYZ Insurance
   Headquartered in xxx, xx

   X,xxx employees worldwide, including xx actuaries

   Core business is yyyy

   Member of UW-Madison’s Actuarial Co-curricular
    Learning Board
   The Actuarial Profession

   Characteristics of actuaries

   Why Become an Actuary?

   Steps to become an Actuary

   Wrap-up and Questions
   The Actuarial Profession
    Math Related Professions

   Engineer

   Computer systems analyst

   Economist

   Statistician
What is an Actuary?
   Business professional with strong quantitative skills

   Problem solver with expertise in understanding and
    managing financial risks

   Specialist who uses historical information and models
    to help predict the future

   Expert in an area of practice (like a lawyer or doctor)
Actuarial Areas of Expertise
   Property & Casualty – expert in personal property
    risks and risks associated with businesses

   Life & Health – expert in risks of illness, disability or

   Pension – expert in developing and analyzing
    retirement programs
Where do Actuaries Work?
   Insurance companies

   Consulting firms

   Government

   Others – where quantifying risk is needed
    (management consultants, investment firms)
    Desirable Skills for Actuaries
   Good analytical and problem solving skills

   Strong computer skills

   Good business acumen

   Excellent communication and interpersonal skills
Actuarial Exercise

Automobile insurance: What variables do you think are
   predictive of insurance claims for :

   Different drivers

   Different cars
Actuarial Exercise
Some of the predictive factors for auto insurance

   Driver : Age, Sex, Driving Record, Credit Report,
    Grades (students), Residence (area you drive)

   Vehicle: Age, Make/Model, Value

Actuaries identify these predictive factors from a wealth
of policy data and quantify the expected impact
of each of these factors.
Types of Actuarial Projects
   Pricing hurricane insurance

   Designing and pricing of health insurance programs

   Evaluating price and risks of potential business

   Designing and pricing life insurance
   The Actuarial Profession

   Characteristics of actuaries
Diverse Roles of an Actuary
   Accountant - Financial Reporting Actuary

   Financial Analyst - Investment Actuary

   Sales - Marketing Actuary

   Management - Executive Actuary (CEO, CFO)

   Consultant - Consulting Actuary

   Product Manager – Product Development Actuary
     Fits a broad range of strengths

Working with computers    Working with people

Great mathematicians      Great business skills

Working in teams           Working individually
   The Actuarial Profession

   Characteristics of actuaries

   Why Become an Actuary?
Interesting work
   Projects are diverse and the work is dynamic

   Use a broad range of your problem solving skills:
    analytical, technical, & creative

   High level of job satisfaction

   Work individually and in teams to accomplish
Strong Job Market
   High demand profession

   Historically, more positions available than there are

   Easy to get a job after college

   Many actuaries hold senior level executive positions
    (CEO, CFO, Consulting Partner)
        A Highly Rated Profession
    Top 5 Professions by (2009)

    1. Mathematician
    2. Actuary
    3. Statistician
    4. Biologist
    5. Software Engineer

   Ranking of 200 professions
   Factors of evaluation: Stress, Work Environment,
    Physical Demands, Income and Outlook
        Employment Statistics (U.S.)

                                                        Growth      Growth
     Employment Category                   2006       2006 - 2016     %
     Food and beverage serving            7,442,000      993,000    13.3%
     Accountants and auditors             1,274,000      226,000    17.7%
     Physicians and Surgeons               633,000        90,000    14.2%
     Lawyers                               761,000        84,000    11.0%
     Athletes, coaches, umpires             18,000          3,400   18.9%
     Actuaries                              18,000          4,300   23.9%

Source: U.S. Bureau of Labor Statistics
Financial Rewards
    Wisconsin School of Business Undergraduate
    Starting Salaries (2007-2008 academic year)
Major                                          Average Starting Salary
Actuarial Science                                      $57,000
Finance, Investment & Banking                          $52,000
Real Estate & Urban Land Economics                     $51,500
Accounting                                             $49,800
Marketing                                              $46,200
Management & Human Resources                           $45,300

Credentialed actuaries with 5 -10 years of experience can make in
excess of $100,000 a year

Source: WSOB salary survey, DW Simpson salary survey
   The Actuarial Profession

   Characteristics of actuaries

   Why Become an Actuary?

   How do I become an Actuary?
    What Can I Do Now?

   Take classes that prepare you for college

   Take math classes every year and take AP exams

   Take computer science courses

   Choose a university which will prepare you to
    become an actuary
        What to look for in a University?
Offers degree in Actuarial Science                                     
In the school of business                                              
Offers Risk Management and Insurance major and classes                 
Offers all actuarial courses every year                                
Has an active student Actuarial club                                   
Produces a significant number of graduates each year                   
Produces high quality graduates who are in demand by employers         
Connects to industry through advisory boards, campus speakers          
Employs at least one full-time credentialed actuary on faculty         
Actuarial Science specific career fair                                 
    Close Connections to Industry
UW-Madison’s Actuarial Co-Curricular Learning Board

   Outside of the classroom learning opportunities with
    industry professionals

   Unique opportunities to interact and learn about the

   Structured learning events, informal lunches, social
    Career Path of an Actuary
   One or more paid summer internships while in college

   Begin credentialing process while in college

   Find full time job after four year actuarial degree

   Finish credentialing process while being paid to work
   The Actuarial Profession

   Characteristics of actuaries

   Why Become an Actuary?

   How do I become an Actuary?

   Wrap-up and Questions
Actuarial Web Resources
Be an Actuary:

Society of Actuaries:

Casualty Actuarial Society:

Actuarial Foundation:
UW-Madison Resources
UW-Madison Faculty Contact: Kirk Peter

UW-Madison Actuarial Science, Risk Management and
  Insurance Department:

UW-Madison Actuarial Club:
XYZ Insurance Resources
XYZ Homepage:

XYZ Actuarial Contact: Presenter 1
    Actuaries at XYZ Insurance
   Highly visible positions
   Rotation program to give our actuaries broad
   Unique community of professionals
   Many actuaries in senior leadership roles
   Other
Actuarial Exercise

How many people do you need to have in a room such
  that there is greater than a 50% probability of two
  people having the same birthdates?

A.) 12
B.) 23
C.) 87
D.) 182
   Actuarial Exercise

If you have N people in a room, the probability of all having
    unique birthdates =
1 x (364/365) x (363/365) x … (365 – (n-1))/365

= 1/365n x [365! / (365-n)!]

So, probability that at least two are the same is the
   complement (1 minus this quantity)

Group size is 23, chance that two people have
the same birthdate = 50.7%
Actuarial Exercise

Mr. Smith has two children. You already know that one
   of them is a girl; what's the probability that Mr.
   Smith has a son?

A.) 1/2
B.) 1/3
C.) 2/3
D.) 1/4
Actuarial Exercise

Answer: 2/3

   Options are: (G,B) (B,G) (G,G) or (B,B) Eliminate
   the final (B,B) as we know one is a girl. In 2 of the
   remaining 3 instances there is a boy.
Actuarial Exercise

   Hole-in-one insurance for a charity golf outing

   Grand prize if someone hits a hole in one

   What information would you want to know to
    correctly price this policy
Actuarial Exercise
   Number of golfers

   Quality of the golfers

   Difficulty of hole

   Value of the prize/Number of prizes

   Validation of hole in one

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