Actuarial Profession

The Actuarial Profession An Introduction What is an Actuary? Is an Actuary a fortune teller? Is an Actuary a professional gambler? Doctrine of False Cause A false cause fallacy is a misidentification of the cause for an observed effect “Why do…”    People who have root canals get cancer more often People who attend the symphony live longer People who floss their teeth live longer Two Branches of Actuarial Science  Life & Health / Pension - Society of Actuaries : SOA - around 17,000 in United States  Property and Casualty (or Property / Liability) - Casualty Actuarial Society : CAS 3,425 in United States / 3,857 total P&C Lines of Business Examples Homeowners  Earthquake  Automobile  Mortgage  General Liability  Medical Malpractice  Workers’ Compensation  Products Liability  Reinsurance  Example Actuarial Problems - Pricing New Products - Price Classification - Modeling Catastrophes - Strategic Planning - Graphing Size of Loss Distributions - Establishing Loss Reserves - Solvency Monitoring - Rate Adequacy Studies - Trending and Development of Losses - Current Leveling of Premiums - Credibility Measures Pricing New Products Body Piercing Salon Insurance How would you price that? Where might a P&C actuary be hard pressed to find a job? Alabama Idaho Louisiana Montana Maine Oklahoma Nevada West Virginia Kentucky Arkansas Vermont Hawaii Mississippi North Dakota New Mexico Utah Alaska Wyoming International CAS Members Canada 246 China Bermuda 73 Mexico United Kingdom 31 South Korea Switzerland 22 Brazil Singapore Israel Taiwan Barbados (W.I.) Australia Cayman Islands France Italy Germany Japan Hong Kong South Africa Ireland Two Branches of Actuarial Science REVISITED CAS: Casualty Actuarial Society (Property & Casualty) 3,425 in United States / 3,857 total SOA: Society of Actuaries (Life & Health / Pension) around 17,000 in United States How I choose a path? In the CAS and SOA, Exam Parts 1, 2, & are the same CAS Exam = SOA Exam P CAS Exam = SOA Exam FM CAS Exam = SOA Exam C CAS Actuarial Examinations Associate Level Exams Exam Topic Probability Financial Mathematics Statistics and Actuarial Models Construction and Evaluation of Actuarial Models Introduction to P&C Insurance and Ratemaking Reserving, Insurance Accounting Principles, and Reinsurance Annual Statement, Taxation, Regulation (U.S or Canada) CAS Actuarial Examinations Fellowship Level Exams Exam Topic Investments and Financial Analysis Advanced Ratemaking, Rate of Return, and Individual Risk Rating Plans CAS and SOA Actuarial Examinations Exam “Probability” A General Probability B Univariate Probability Distributions: binomial, negative binomial, geometric, uniform, hypergeometric, Poisson, exponential, Pareto, normal, chi-square, beta, lognormal, gamma, and Weibull C Multivariate Probability Distributions CAS and SOA Actuarial Examinations Exam “Financial Mathematics” A Interest Theory B Finance Validation by Educational Experience (“VEE”) Applied Statistical Methods Corporate Finance Economics Skills and Personality Traits to succeed as an Actuary • • • • • • • • • • • Analytic thinking Problem solving Good common sense / “business” sense Facility with Mathematics Ability to explain complex ideas Organized, concise writer Determination Independence Disciplined study habits Tendency to start projects early Comfortable using computer programs like Excel, Access, Word, SAS The Changing Face of Actuaries In 2003, women held the presidency in three of the five professional organizations governing the field of actuarial science Pictured are: - Barbara Lautzenheiser, president of the American Academy of Actuaries (FSA 1969); - Mary Frances Miller, president of the Casualty Actuarial Society (FCAS 1988); and - Margaret Tiller Sherwood, president of the Conference of Consulting Actuaries (FCAS 1982, ASA 1984) The International Association of Black Actuaries IABA’s 2002 Annual Meeting Membership in IABA is growing 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 – $175 exam fee reimbursed, up to two times ($350)  Visit the website www.BeAnActuary.org Minority Programs: Scholarship applications, exam fee reimbursement forms, internships, and more Write this down! The CAS Website: www.casact.org DETAIL OF EXAMS: Admissions 2006 Syllabus of Basic Education CAS Basic Education Summary ABOUT THE PROFESSION: www.BeAnActuary.org INTERNSHIPS: www.BeAnActuary.org/find/atp.cfm VALIDATION BY EDUCATIONAL EXPERIENCE (VEE): Admissions 2006 Syllabus of Basic Education Validation by Educational Experience CURRENT TOPICS: Continuing Education Meeting and Seminar Handouts View the Chronological List The End