Be An Actuary A Career Without Boundaries About an Actuarial Career Brought Presented to You By: By: Laura McSweeney Brought to You By: Overview        What is an Actuary? Where Actuaries work? What Actuaries do? Why become an Actuary? What is the career outlook? What skills and talents are needed? How can you become an Actuary? What is an Actuary? An Actuary is a person who: ■ ■ Analyzes, manages and measures the financial implications of future risk Develops and validates financial models to guide decision making Where Actuaries Work? ■ ■ ■ ■ ■ ■ ■ ■ Insurance companies Consulting firms Government insurance departments Banks and investment firms Large corporations Public accounting firms Colleges and universities Anywhere risk management is needed Most Common Industries Where Actuaries Work ■ Insurance Industry ◆ Property (auto) ◆ Life and (home) and casualty annuities ■ Employee Benefit Industry ◆ Retirement benefits ◆ Health benefits ◆ Social Security ■ Financial Services Industry ◆ Banks, investing, risk management ◆ Mergers & Acquisitions Typical Actuarial Projects ■ ■ ■ ■ ■ Life Insurance: Designing and pricing life insurance products Property & Casualty: Estimating the amount of money to be set aside for insurance claims that have not been paid Health Benefits: Setting HMO premium rates Retirement Systems: Pricing the cost of increasing retirement benefits Finance & Investments: Portfolio diversification studies Interesting Actuarial Problems ■ Property/Casualty Actuary ◆ Automobile Insurance and Credit Scores ◆ Catastrophe Insurance Coverage – hurricanes, earthquakes, etc ◆ Modeling retention changes for large corporations Interesting Actuarial Problems ■ Health Actuary ◆ $10 co-pay vs $25 co-pay for prescription drugs ◆ HMO vs Large Deductibles (Health Savings Accounts) ◆ National Prescription Drug Plan Interesting Actuarial Problems ■ Pension Actuary ◆ Social Security Funding ◆ Employer-Sponsored Pension Plan vs 401K ◆ 2% x years of service vs 1.5% x years of Service – Pension Benefits Why Become an Actuary? ■ High earning potential ■ No cost of graduate school – “learn while you earn” ■ Advance by examinations – no “glass ceiling” ■ Skills are highly transferable to other industries and job responsibilities ■ Newsworthy projects ■ Potential for travel as a consultant or a 9to-5 job with little or no travel as a nonconsultant ■ High demand – less sensitive to economic cycles ■ Job security; need expected to grow ■ Overall, a highly ranked profession Jobs Rated Almanac ■ ■ ■ Actuary was rated the #1 job in America, according to the Wall Street Journal (2010), #2 in 2012, #4 in 2014 The Examiner (2009) and CNN Money (2012) claim that actuaries one of the top fields to be in during a recession Ranking is based on factors: Income, Outlook, Stress, Environment, Physical Demands and Security Salary Information ■ Starting salaries of $41,000 - $52,000 (with one exam and no experience) ■ Merit increases ■ Examination increases ■ Increases for professional designations Source: D.W Simpson & Company, Inc., 2006 Salary Survey Earning Potential Average Actuarial Salaries Years of Experience Note: Compensation may vary significantly according to years of experience, geographic region and r Source: D.W Simpson & Company, Inc., 2006 Salary Survey Disadvantages of the Career ■ Difficulty of the examination process ■ Frustrating, yet challenging problems ■ Narrow field with high degree of specialization ■ Confinement to an office (nonconsultant) ■ Travel and long hours (consultant) What Skills are Needed to be an Actuary? ■ ■ ■ ■ ■ Knowledge of math and finance Computer skills Keen analytical, project management and problem solving skills Solid communication skills (oral & written) Good business sense What Talents are Needed to be an Actuary? ■ Motivation ■ Creativity ■ Independence ■ Ability to work with others How to Become an Actuary ■ Like a doctor or lawyer, an actuary achieves professional status by passing examinations to prove a certain level of knowledge ■ Actuarial examinations are administered by the Casualty Actuarial Society (CAS) and Society of Actuaries (SOA) Three of the first four exams are administered jointly ■ Examinations are held twice a year (1/P – four times/year) ■ Two professional designations exist for each organization: ◆ Associate (either ASA or ACAS) ◆ Fellow (either FSA or FCAS) ■ You can earn while you learn - employers support actuarial trainees taking exams by providing exam study time on the job Preliminary Education Structure ■ Prerequisites ◆ Calculus ◆ Linear Algebra ■ Validation by Educational Experience (VEE) VEE credits are obtained through college courses, standardized exams, approved educational experiences, and transitional exams for:  Applied Statistical Methods: EC 380 (Econometrics) w/ prereq EC 278 (Statistics) [or MA351/352 with permission of chair]  Corporate Finance: FI 101 (Intro to Finance) w/ prereq AC 11, EC 11, EC 12 and FI 215 (Financial Management)  Economics: EC11 (Micro) and EC12 (Macro) Preliminary Education Structure ■ Preliminary Examinations ◆ Joint Exam 1/P: Probability ◆ Joint Exam 2/FM: Financial Mathematics ■ In addition to the preliminary education, each society has additional requirements to achieve professional designations Advice for Students Who Want to be Actuaries ■ Develop disciplined study habits ■ Acquire a well-rounded curriculum, including classes approved for VEE credit ■ Sharpen your communication and general business skills ■ Take actuarial exams while in school - the sooner you start, the sooner you will finish ■ Find an actuarial internship Advancing Diversity ■ Minority Students: ◆ African American, Latino, or Native American ■ Scholarships for Minority Students ◆ Individual awards of $500 - $3,000, annually ◆ Demonstrated performance and commitment ■ Exam Fee Reimbursement for Minority Students ◆ Reimbursed for successfully passing Exam P/1 and/or FM/2 ■ Visit the website www.BeAnActuary.org Minority Programs: Scholarship applications, exam fee reimbursement forms, internships, and more Questions and Answers To learn more about the actuarial profession, exams, and internships, visit BeAnActuary.org Casualty Actuarial Society www.casact.org Advice ■ Some past students recommended the online seminars offered through The Infinite Actuary (theinfiniteactuary.com) and/or study materials from Actex (actexmadriver.com) Video Info: ■ Exam Process ■ Actuary basics ■ Info about being an Actuary