Becoming an Actuary, and Associated Applications in Probability and Finance - PowerPoint PPT Presentation

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Becoming an Actuary, and Associated Applications in Probability and Finance

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  1. Becoming an Actuary, and Associated Applications in Probability and Finance ACMS Talk February 2, 2006 By Toby White

  2. Recent Press • Jack Nicholson portrays actuary in current film ‘About Schmidt’ • 2002 Job Almanac Rates Actuary #2 Career Overall behind Biologist • Actuary has been rated #1 more often than not over last several decades – why?

  3. Primary Attractions • Combines Math/Business Applications • Intellectual Challenge/Variety • Career Potential/Mobility • Salary/Benefits • Work Conditions/Environment

  4. Professional Designations • F.S.A. = Fellow in the Society of Actuaries (requires passing all 8 life/health exams) • A.S.A. = Associate in the Society of Acts. (requires passing the first 6 exams) • F.C.A.S./A.C.A.S. = Fellow/Associate in the Casualty Actuarial Society (about same as above, but property/casualty is focus)

  5. S.O.A. Exam System • The first 4 exams are mathematically - oriented, multiple choice exams (exam P-3 hrs., exam FM-2 hrs., exams M/C-4 hrs.) • 1/P: Probability (includes calculus) • 2/FM: Interest Theory/Mathematical Finance • 3/M: Risk Modelling / Life Contingencies • 4/C: Credibility, Loss Distributions, Survival Analysis, Construction of Models

  6. S.O.A. Exam System (part 2) • Courses 5,6, and 8 are primarily essay exams, testing knowledge of the insurance, banking, and financial services industries • Course 7 is an intensive project-oriented seminar, but has a pre-test to qualify • Professional Development and a Fellowship Admissions Course complete requirements

  7. Salary Structure • Starting Salaries around $45,000-$50,000 (and only requires undergraduate education) • Salary Increases by $5,000 per exam passed • New FSA Salary in $80,000-$100,000 range, depending on experience, company, and geographic living standard adjustments • Annual Bonuses can add 10-50% to base

  8. Main Actuarial Functions • Pricing / Setting Premiums • Product Creation / Development • Reserving / Solvency Provisions • Financial Reporting / Accounting • Consulting • Excecutive (C.E.O./C.F.O./V.P.,…)

  9. Specialty Tracks • Individual Life Insurance and Annuities • Group/Health Insurance and Managed Care • Pension/Retirement Funding • Finance • Investments • International

  10. Insurance v. Consulting • Insurance • Standard business hours (40 hrs/week) • More traditional corporate infrastructure • Work is of periodic nature, expertise developed • Consulting • Longer hours, but higher pay/bonuses • More travel; goal is to attain ‘principal/partner’ • Work is more variable, depends on client

  11. Geographic Opportunities • Jobs are heavily concentrated in financial centers, such as: • East coast (NYC, Boston, Hartford, Philly) • Midwest (Chicago, Minneapolis, Des Moines) • Consulting opportunities can be found in any of the 25-30 largest cities in the U.S. • Seattle insurance companies include Safeco (office in U-district) and Farmer’s Life

  12. Competing/Related Professions • C.F.A. = Certified Financial Analyst • C.F.P. = Certified Financial Planner • C.P.A. = Certified Public Accountant • M.B.A. = Master’s Business Administration • Trading (Wall Street / Chicago exchanges) • Academic (many schools have actuarial-training programs, and offer M.S. degrees)