Transcript Actuarial Science at UW

Consider a Career as an Actuary
Presenter 1, XYZ Insurance Company
Presenter 2, UW-Madison actuarial
student
About XYZ Insurance
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Headquartered in xxx, xx
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X,xxx employees worldwide, including xx actuaries
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Core business is yyyy
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Member of UW-Madison’s Actuarial Co-curricular
Learning Board
Agenda
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The Actuarial Profession
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Characteristics of actuaries
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Why Become an Actuary?
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Steps to become an Actuary
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Wrap-up and Questions
Agenda
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The Actuarial Profession
Math Related Professions
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ACTUARY
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Engineer
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Computer systems analyst
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Economist
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Statistician
What is an Actuary?
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Business professional with strong quantitative skills
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Problem solver with expertise in understanding and
managing financial risks
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Specialist who uses historical information and models
to help predict the future
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Expert in an area of practice (like a lawyer or doctor)
Actuarial Areas of Expertise
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Property & Casualty – expert in personal property
risks and risks associated with businesses
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Life & Health – expert in risks of illness, disability or
death
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Pension – expert in developing and analyzing
retirement programs
Where do Actuaries Work?
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Insurance companies
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Consulting firms
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Government
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Others – where quantifying risk is needed
(management consultants, investment firms)
Desirable Skills for Actuaries
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Good analytical and problem solving skills
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Strong computer skills
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Good business acumen
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Excellent communication and interpersonal skills
Actuarial Exercise
Automobile insurance: What variables do you think are
predictive of insurance claims for :
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Different drivers
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Different cars
Actuarial Exercise
Some of the predictive factors for auto insurance
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Driver : Age, Sex, Driving Record, Credit Report,
Grades (students), Residence (area you drive)
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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
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Pricing hurricane insurance
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Designing and pricing of health insurance programs
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Evaluating price and risks of potential business
acquisitions
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Designing and pricing life insurance
Agenda
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The Actuarial Profession
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Characteristics of actuaries
Diverse Roles of an Actuary
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Accountant - Financial Reporting Actuary
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Financial Analyst - Investment Actuary
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Sales - Marketing Actuary
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Management - Executive Actuary (CEO, CFO)
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Consultant - Consulting Actuary
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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
Agenda
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The Actuarial Profession
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Characteristics of actuaries
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Why Become an Actuary?
Interesting work
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Projects are diverse and the work is dynamic
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Use a broad range of your problem solving skills:
analytical, technical, & creative
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High level of job satisfaction
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Work individually and in teams to accomplish
objectives
Strong Job Market
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High demand profession
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Historically, more positions available than there are
actuaries
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Easy to get a job after college
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Many actuaries hold senior level executive positions
(CEO, CFO, Consulting Partner)
A Highly Rated Profession
Top 5 Professions by Jobsrated.com (2009)
1. Mathematician
2. Actuary
3. Statistician
4. Biologist
5. Software Engineer
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Ranking of 200 professions
Factors of evaluation: Stress, Work Environment,
Physical Demands, Income and Outlook
Employment Statistics (U.S.)
Employment Category
2006
Growth
Growth
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
Agenda
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The Actuarial Profession
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Characteristics of actuaries
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Why Become an Actuary?
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How do I become an Actuary?
What Can I Do Now?
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Take classes that prepare you for college
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Take math classes every year and take AP exams
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Take computer science courses
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Choose a university which will prepare you to
become an actuary
What to look for in a University?
UW-Madison
Offers degree in Actuarial Science
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In the school of business
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Offers Risk Management and Insurance major and classes
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Offers all actuarial courses every year
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Has an active student Actuarial club
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Produces a significant number of graduates each year
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Produces high quality graduates who are in demand by employers
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Connects to industry through advisory boards, campus speakers
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Employs at least one full-time credentialed actuary on faculty
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Actuarial Science specific career fair
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Close Connections to Industry
UW-Madison’s Actuarial Co-Curricular Learning Board
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Outside of the classroom learning opportunities with
industry professionals
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Unique opportunities to interact and learn about the
industry
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Structured learning events, informal lunches, social
events
Career Path of an Actuary
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One or more paid summer internships while in college
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Begin credentialing process while in college
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Find full time job after four year actuarial degree
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Finish credentialing process while being paid to work
Agenda
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The Actuarial Profession
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Characteristics of actuaries
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Why Become an Actuary?
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How do I become an Actuary?
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Wrap-up and Questions
Actuarial Web Resources
Be an Actuary: www.beanactuary.org
Society of Actuaries: www.soa.org
Casualty Actuarial Society:
www.casact.org
Actuarial Foundation:
www.actuarialfoundation.org
UW-Madison Resources
UW-Madison Faculty Contact: Kirk Peter
[email protected]
UW-Madison Actuarial Science, Risk Management and
Insurance Department: www.bus.wisc.edu/asrmi
UW-Madison Actuarial Club: http://actclub.rso.wisc.edu
XYZ Insurance Resources
XYZ Homepage: XYZ.com
XYZ Actuarial Contact: Presenter 1
[email protected]
 END
OF
PRESENTATION
Actuaries at XYZ Insurance
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Highly visible positions
Rotation program to give our actuaries broad
experiences
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
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Hole-in-one insurance for a charity golf outing
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Grand prize if someone hits a hole in one
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What information would you want to know to
correctly price this policy
Actuarial Exercise
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Number of golfers
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Quality of the golfers
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Difficulty of hole
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Value of the prize/Number of prizes
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Validation of hole in one