Rising in the Actuarial Profession through the CAS

March 4, 2014 Ron Wilkins

Outline

What is an Actuary? Why be an Actuary?

What skills are needed to be an Actuary?

How do you become an Actuary?

What do Property/Casualty Actuaries do?

How can I find out more?

Outline

What is an Actuary? Why be an Actuary?

What skills are needed to be an Actuary?

How do you become an Actuary?

What do Property/Casualty Actuaries do?

How can I find out more?

What is an Actuary?

A business professional who deals with the financial impact of risk and uncertainty Analyzes, manages and measures the financial implications of future risk Develops and validates models and communicate results to guide decision making

Areas of Work

Insurance Industry – Property and casualty (P/C) – Life and annuities Employee Benefit Industry – Retirement benefits – Health benefits Financial Services Industry – Banks, investments, risk management – Mergers & Acquisitions Government – Social Security – Regulation of insurance companies

Outline

What is an Actuary? Why be an Actuary?

What skills are needed to be an Actuary?

How do you become an Actuary?

What do Property/Casualty Actuaries do?

How can I find out more?

Why be an Actuary?

Advance by examinations Advancement opportunities expand throughout career Variety of avenues to choose High demand – less sensitive to economic cycles Interesting problems to solve A highly ranked profession – Actuary is rated the #1 job in America, according to a

2013 CareerCast.com report

.

What makes the Casualty Actuarial Society different?

Tangibles – Depth of training – Salaries – Employment opportunities Intangibles – Focus – Culture and sense of community – Spirit of volunteerism – Core Values

CAS Core Values

Collaboration Collegiality Community Creativity/Intellectual Curiosity Excellence Integrity Professionalism Practical Applications

Outline

What is an Actuary? Why be an Actuary?

What skills are needed to be an Actuary?

How do you become an Actuary?

What do Property/Casualty Actuaries do?

How can I find out more?

What Skills are Needed?

Keen analytical, project management and problem solving skills Good business sense Solid communication skills (oral & written) Strong computer skills Knowledge of math and finance

Actuarial Skill Set: A Question of Balance

Technical Competence – Ability to apply casualty actuarial techniques – Synthesis skills – Critical thinking/informed judgment Ability to communicate effectively – Relevance: A business perspective – Articulate judgments, assumptions, limitations – Audience may vary – Sr. Management vs. Peers Business sense

Outline

What is an Actuary? Why be an Actuary?

What skills are needed to be an Actuary?

How do you become an Actuary?

What do Property/Casualty Actuaries do?

How can I find out more?

Becoming an ACAS

Validation by Educational Experience (VEE) – credit for college coursework: – Applied Statistical Methods – Corporate Finance – Economics Two CAS Online Courses: – Risk Management and Insurance Operations – Insurance Accounting, Coverage Analysis, Insurance Law, and Insurance Regulation Written Examinations Course on Professionalism

Becoming an ACAS (cont.)

Written Exams – Exam 1/P—Probability – Exam 2/FM—Financial Mathematics – Exam 3F/MFE—Models for Financial Economics – Exam 3L—Models for Life Contingencies and Statistics – Exam 4/C—Construction and Evaluation of Actuarial Models – Exam 5—Basic Techniques for Ratemaking and Estimating Claim Liabilities – Exam 6—Regulation and Financial Reporting (Nation Specific) • Actuarial Institute of Chinese Taipei • Canada • United States

Study Benefits and other info

Paid Study Time (100 – 120 hours per exam is not uncommon) Raises or bonuses for each exam passed.

Company pays for exam materials, seminars, exam fees, etc.

An internship can be a very helpful way to explore the profession.

Outline

What is an Actuary? Why be an Actuary?

What skills are needed to be an Actuary?

How do you become an Actuary?

What do Property/Casualty Actuaries do?

How can I find out more?

Sample of Work Areas for P&C Actuaries

Ratemaking Loss Reserving Modeling Capital Adequacy Reinsurance Evaluation Enterprise Risk Management

Ratemaking/Pricing

Are current rates meeting our objectives?

Are some classes performing better/worse than others?

(Auto) How do driving patterns influence risk of loss?

How does an insured’s loss experience influence its premium?

Loss Reserving

What is Company’s unpaid claim liability as of 12/31/12? (Best estimate; Central estimate) What is the probability distribution of unpaid claims as of 12/31/12?

Capital Adequacy

How adequate is Company Surplus to respond to adverse results (e.g., loss reserves higher than estimate)?

How much capital is required to support different types of business?

Reinsurance

(Insurer) What are risk/reward trade offs related to different reinsurance structures?

(Reinsurer) Pricing and reserving issues, but with much less data.

Outline

What is an Actuary? Why be an Actuary?

What skills are needed to be an Actuary?

How do you become an Actuary?

What do Property/Casualty Actuaries do?

How can I find out more?

Introducing…

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join online today at

www.CASstudentcentral.org

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Student Central Online Community

Stay connected!

Future Focus blog shares insights, tips and perspectives from practicing casualty actuaries, university professors, students and others.

CAS member directory will give you a sense of how far and wide, broad and deep our network is.

View and connect with other student members Invitations to networking events Access to free webinars 26

Resources

CAS www.casact.org

CAS Student Central www.CASstudentcentral.org

Be An Actuary www.BeAnActuary.org

American Academy of Actuaries www.actuary.org

Feel free to contact me: – [email protected]

Some background info about me…

Binghamton University, Class of 2000, Bachelor of Science, Mathematics Yale University, Class of 2002, Master of Arts, Statistics First actuarial employment: 2002 Completed exam process (FCAS): 2006 Hired by Partner Re: 2007 Current Position: vice president managing research projects related to capital modeling, reserving, and risk management in the company’s Connecticut office.

Appendix: CAS Demographics

A Growing Society

Fellows Associates Affiliates Total

Nov 2003 Nov 2013

2,503 1,318 26 3,847 4,230 1,812 20 6,062

A Global Society

2013 Geographic Distribution

United States 5,152 Hong Kong Canada Bermuda United Kingdom China 521 110 53 51 Switzerland Singapore Germany Other 32 32 20 13 78

CAS Members by Employment Type

Employment Type Property/Casualty Insurance Consultants Other Reinsurance Retired Organizations Serving the Insurance Industry Brokers & Agents Government Life & Accident, Health Academic Total 43% 16% 13% 10% 6% 6% 2% 2% 2% <1%

Source: Casualty Actuarial Society, December 2012

Casualty Actuarial Society 4350 North Fairfax Drive, Suite 250 Arlington, Virginia 22203 www.casact.org