Presentation on theme: "What is an Actuary? n An Actuarys job is to calculate expected Insurance Losses. n An Actuary also applies mathematical, analytical, and business skills."— Presentation transcript:
What is an Actuary? n An Actuarys job is to calculate expected Insurance Losses. n An Actuary also applies mathematical, analytical, and business skills to help solve a variety of financial problems.
Most Common Areas Where Actuaries Work n Insurance Industry u Casualty Actuaries -Property (home) and casualty (car) F Insurance and Reinsurance u Life Actuaries - Life and annuities n Employee Benefit Industry u Pension Actuaries – Defined Pension Plans u Health Actuaries – Health Insurance u Social Security n Financial Industry u Banks, investing, risk management
Where do Actuaries Work? n Insurance and Reinsurance companies n Consulting firms n Government insurance departments n Colleges and universities n Banks and investment firms n Large corporations n Public accounting firms n Anywhere else
What do the different Actuarial specialties do n Casualty – Project expected claims for auto, homeowners, medical malpractice, Directors & Offices, General Liability n Life – Predict Death Rates, use force of Mortality and interest to price products n Pensions – Make sure pension plans are properly funded. Interpret Tax Laws to make sure plans are in compliance.
Typical Casualty Actuarial Projects n RATEMAKING - Conducting studies of insurance rates, such as for autos or homes. n RESERVING - Estimating the amount of money to be set aside for insurance claims that have not been paid. n NEW PRODUCT DEVELOPMENT - Calculating a fair price for a new insurance product. n Participating in various aspects of corporate planning, such as mergers and acquisitions. n Forecasting the impact of catastrophes like hurricanes and earthquakes. n Implementing and monitoring investment programs.
Jobs Rated Almanac n Actuaries have one of the top jobs in America, according to the 1999 Jobs Rated Almanac. Best Jobs 1. Web Site Manager 2. Actuary n 2002 Almanac Best Jobs 1. Biologist 2. Actuary n Ranking is based on six criteria: Income, Outlook, Security, Stress, Environment, and Physical Demands.
Jobs Rated Almanac n Income - Starting salaries range from $41,000 to $53,000 n Outlook - Low unemployment rate, high rate of growth, salary increase, and promotion. n Stress - While the exam process is a source of stress, the overall job satisfaction is high. n Environment - Although actuaries frequently choose to work longer, the normal work week is about 40 hours. Offices are generally comfortable and pleasant. n Physical Demands - There may be some travel, but actuaries spend most of their time working in their home office.
$$ Salary Information $$ n Employers give merit increases to actuaries as they gain experience. n Employers frequently give increases to actuaries as they pass examinations. This can be in form of bonus or percentage raise. n Some companies also offer cash bonuses, salary increases and/or promotions for each professional designation achieved.
$$ Earning Potential $$ No. of Exams Range 1 $41,000 - $53, ACAS $65,000 - $215,000 FCAS $95,000 – $360,000+ Compensation may vary significantly according to years of experience, geographic region, and responsibilities. Compensation may vary significantly according to years of experience, geographic region, and responsibilities.
Career Outlook for Actuaries n Employment growth for consulting actuaries is expected to be faster than employment growth of actuaries in insurance carriers. n The development of new financial tools like Dynamic Financial Analysis has increased the demand for actuaries. n The growing ability to model catastrophic risks such as hurricanes and earthquakes will increase the demand for actuaries. n 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? n Specialized math knowledge u Calculus, statistics, probability n Keen analytical, project management and problem solving skills n Good business sense u Finance, accounting, economics n Solid communication skills (oral & written) n Strong computer skills n Common Sense
2 Types of Actuaries n Business Actuary – Works with underwriters, brokers, management n Back Room Actuary – Develops models and programming for use by the business actuaries and other management
Computer Skills Needed n Typing and Data Entry n Excel and Lotus Spreadsheets n Visual Basic programming for Excel n Word Processing n Database – SQL n Mainframe programming – not as much but good to know the logic of computer programming n SAS – at large companies with large databases.
Courses to Take n Calculus n Statistics and Probability n Typing n Accounting n Management Science – Operations Research n Economics n Stochastic Simulation n Visual Basic Programming n Business Law
How to Become an Actuary n Casualty actuaries in the U.S. and Canada achieve professional status by passing a set of examinations administered by the Casualty Actuarial Society n Examinations are held twice yearly in the Spring and Fall at various cities in the United States, Canada, and other countries around the world. n Completion of Exam Parts 1-7, and attendance of the CAS Course on Professionalism satisfy requirements as an Associate of the CAS (ACAS). n 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 n On-Campus Recruiting n Send Resume to Personnel Departments at target companies n Recruiters – Not usual for entry level n Do internship n Networking – get to know some actuaries
Advice to Students Who Want to be Actuaries n Develop disciplined study habits. n Take a well-rounded curriculum. n Sharpen your communication skills. n Take actuarial exams while in school - the sooner you start, the sooner you will finish.
Exams n Currently 9 exams for FCAS designation n Only 30% of students taking an exam will pass n Graded on curve. n Requires 500 to 600 hours of studying to pass n Courses are available but are really just a review of what you already should have studied. n Average time to pass all exams – 10 years
Where to find more information – Casualty Actuarial Society – Society of Actuaries (life & health) – American Academy of Actuaries