Be An Actuary A Career Without Boundaries Presented By: Presented By: Your Information Here Brought to You By: Brought to You By: What is an actuary? An actuary uses math, statistics and finance to project uncertain future events. Some Actuarial Organizations American Society of Pension Professionals & Actuaries Salaries for Actuaries Based on Exams Passed and Years of Experience A Comparison of Salaries from Actuarial Recruiters (Salaries in $K) Years of Experience Aggregate Exams 1 to 5 10 years or 0 to 1 years 5-10 years years more 1 to 2 44-65 50-85 * * 3 to 4 50-80 55-90 70-125 * Near Associates (5 to 6) * 65-95 75-140 * Associates * 80-105 90-165 100-305 New Fellows * * 100-215 * Experienced Fellows * * 100-240 140-500+ Note: Compensation may vary significantly according to years of experience, geographic region and responsibilities. Source: Survey of Actuarial Recruiters, August 2010 issue of The Actuarial Review Sample Median Salaries Median Salary in 2006 by Occupation Bureau of Labor Statistics 100,000 80,000 60,000 40,000 20,000 - Benefits of Becoming an Actuary • High earnings potential • Graduate school is not required • Professional advancement through examinations • Earn while you learn • Variety of avenues to choose - P&C, Life, Investment, Risk Management Where do actuaries work? Most actuaries work within the insurance industry, although a growing number of actuaries work for: • Consulting Firms • Government • Banks and Investment Firms • Large Corporations (employee benefits & risk management) • Colleges and Universities • Courts (expert witness testimony) Anywhere risk is present! Benefits of Becoming an Actuary • Newsworthy projects, expert witness testimony • Demand for services protected to an extent from economic downturns – “Risk is Opportunity” • High Job security – a highly specialized occupation What is the career outlook? Employment of actuaries is expected to grow faster than average for all occupations through 2014 [ U.S. Department of Labor ] • The Consulting sector is growing • Expansion of retirement savings products • Risk of terrorism and growing level of catastrophes has increased the demand in property insurance • Continued growth in the health services industry • Current push within actuarial profession to view actuaries as experts in risk management field Among Top Ranked Jobs • In 2010, WSJ.com ranked actuaries at the number one position on its list of “200 Best and Worst Jobs.” • In 2008, CNN.com ranked the job of Associate Actuary at the number one position on it's list of "Ten Jobs that Pay $80,000 a Year." • Forbes.com recently reported on the top 200 best jobs for new college grads. Actuary was listed in the top 10 jobs, coming in at number eight. • The job actuary has also been rated the second-best job in the United States by the Jobs Rated Almanac (Sixth Edition, 2002). The popular reference book lists the actuarial profession above other highly regarded careers, such as accountant or attorney. Only "biologist" rated higher. CAS Membership SOA Membership UNIVERSITY, 228 INSURANCE ORG, 8,963 CONSULTING, 7,023 GOVERNMENT, OTHER, 3,207 470 BANK, 504 CAS & SOA Membership By State CAS Top States SOA Top States Illinois 433 New York 1,403 Connecticut 421 Illinois 1,222 New York 390 Connecticut 1,079 New Jersey 328 California 908 California 285 New Jersey 849 Pennsylvania 241 Pennsylvania 841 Massachusetts 190 Massachusetts 801 Ohio 160 Texas 743 Wisconsin 127 Minnesota 605 Texas 124 Georgia 559 Actuaries in Other Countries Total CAS and SOA Employment Outside U.S. Canada 3,936 Bermuda 150 Hong Kong 545 Singapore 83 China 399 Australia 77 Taiwan 236 Switzerland 65 United Other Kingdom 234 Countries 605 What do Actuaries do? Typical Actuarial Projects • Property and Casualty Insurance: estimate reserves for unpaid homeowner’s or auto insurance claims • Life Insurance: design and price life insurance coverage • Health Benefits: set levels of medical insurance premiums • Retirement Benefits: estimate the annual amount needed to provide for future pension benefits • Finance and Investments: asset/liability matching Sample Actuarial Problem – “Auto Pricing 101” #1 Background: • ABC Insurance Company insures 1,000 eighteen year old drivers. • Assume 300 of the 1,000 have accidents within a year. • Assume the average repair cost for each accident is $500. Question: What is the minimum premium that ABC should charge an 18-year old for a 1-year car insurance policy? Sample Actuarial Problem – “Auto Pricing 101” #1 Solution: • At a minimum, the total premiums collected must equal the total cost of the accidents. • Estimated cost of the accidents: 300 × $500 = $150,000 • Minimum premium for each driver: $150,000 ÷ 1,000 = $150 Challenge: Should ABC charge more than this premium? If so, why? Sample Actuarial Problem – “Auto Pricing 101” #2 Background • Assume 400 of the drivers are males and 600 are females. • Assume 200 out of 300 of accidents will involve males, and the remaining 100 accidents will involve females. Question: What premium should be charged for the males and the females? Should it be the same? Sample Actuarial Problem – “Auto Pricing 101” #2 • Total males’ premium: 200 accidents × $500 per accident = $100,000 • Each male’s premium: $100,000 ÷ 400 males = $250 • Total females’ premium: 100 accidents × $500 per accident = $50,000 • Each female’s premium: $50,000 ÷ 600 females = $83.33 The male’s premium should be THREE TIMES the female’s premiums! How do I become an actuary? What can help in High School? • Follow a college preparatory curriculum • Take math classes every year • Take advanced courses like calculus and statistics • Enroll in computer science courses to develop your computer skills • Take business classes High School Summer Actuarial Programs Illinois State University (Bloomington, Illinois) July 11- July 16 Application deadline: April 30th Howard University (Washington D.C.) June 20- July 10 Application deadline: April 16th Temple University (Philidelphia, PA) Typically a 6 week program Contact firstname.lastname@example.org for more information Resources for Minority Students Programs: • Mentoring • College Scholarships • Individual awards of $1,000 - $5,000, annually • Demonstrated performance and commitment • Exam fee reimbursement • Reimbursed for successfully passing exam P/1 and/or FM/2 • Internship opportunities • Visit www.BeAnActuary.org for more information What to do in College? • Plan a course load in mathematics, statistics, and actuarial science • Include business courses to broaden your options • Take courses in business writing and public speaking • Look for internship opportunities • Pass actuarial exams! Most entry level candidates now have 1-2 exams. College Advice (cont.) • Apply for an Actuarial Scholarship! • Check www.BeAnActuary.org for scholarship forms and additional information. Ways to Get Ahead • Develop disciplined study habits • Seek out an actuarial mentor or work with your advisor • Begin to explore resources available to you through professional organizations • Participate in a summer actuarial program • Think about your areas of interest There is growing diversity within the profession. In 2003, these three women held the presidency in three of the five professional organizations governing the field of actuarial science. The International Association of Black Actuaries is growing. IABA’s 2009 Annual Meeting Web Resources More about the actuarial profession: www.BeAnActuary.org The Casualty Actuarial Society: www.casact.org The Society of Actuaries: www.soa.org International Association of Black Actuaries www.blackactuaries.org Any questions?