actuarial science at UW Madison 2

Consider a Career as an ActuaryPresenter 1, XYZ Insurance CompanyPresenter 2, UW-Madison actuarial student... About XYZ Insurance  Headquartered in xxx, xx  X,xxx employees worldwide,

Consider a Career as an Actuary

Presenter 1, XYZ Insurance CompanyPresenter 2, UW-Madison actuarial student

About XYZ Insurance

 Headquartered in xxx, xx

 X,xxx employees worldwide, including xx actuaries

 Core business is yyyy

 Member of UW-Madison’s Actuarial Co-curricular

Learning Board

 The Actuarial Profession

 Characteristics of actuaries

 Steps to become an Actuary

 Wrap-up and Questions

 The Actuarial Profession

Math Related Professions

What is an Actuary?

 Business professional with strong quantitative skills

 Problem solver with expertise in understanding and

managing financial risks

 Specialist who uses historical information and models

to help predict the future

 Expert in an area of practice (like a lawyer or doctor)

Actuarial Areas of Expertise

 Property & Casualty – expert in personal property

risks and risks associated with businesses

 Life & Health – expert in risks of illness, disability or

death

 Pension – expert in developing and analyzing

retirement programs

Where do Actuaries Work?

 Insurance companies

 Consulting firms

 Others – where quantifying risk is needed

(management consultants, investment firms)

Desirable Skills for Actuaries

 Good analytical and problem solving skills

 Strong computer skills

 Excellent communication and interpersonal skills

Actuarial Exercise

Automobile insurance: What variables do you think are

predictive of insurance claims for :

 Different drivers

 Different cars

Actuarial Exercise

Some of the predictive factors for auto insurance

 Driver : Age, Sex, Driving Record, Credit Report, Grades

(students), Residence (area you drive)

 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

 Pricing hurricane insurance

 Designing and pricing of health insurance programs

 Evaluating price and risks of potential business

acquisitions

 Designing and pricing life insurance

 The Actuarial Profession

 Characteristics of actuaries

Diverse Roles of an Actuary

 Accountant - Financial Reporting Actuary

 Financial Analyst - Investment Actuary

 Sales - Marketing Actuary

 Management - Executive Actuary (CEO, CFO)

 Consultant - Consulting Actuary

 Product Manager – Product Development Actuary

Fits a broad range of strengths

Working with computers

Great mathematicians

Working in teams

Working with people

Great business skills

Working individually

Interesting work

 Projects are diverse and the work is dynamic

 Use a broad range of your problem solving skills:

analytical, technical, & creative

 High level of job satisfaction

 Work individually and in teams to accomplish

objectives

Strong Job Market

 High demand profession

 Historically, more positions available than there are

actuaries

 Easy to get a job after college

 Many actuaries hold senior level executive positions

(CEO, CFO, Consulting Partner)

A Highly Rated Profession

Top 5 Professions by Jobsrated.com (2009)

 Factors of evaluation: Stress, Work Environment,

Physical Demands, Income and Outlook

Employment Statistics (U.S.)

Source: U.S Bureau of Labor Statistics

Growth Growth Employment Category 2006 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: WSOB salary survey, DW Simpson salary survey

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

 The Actuarial Profession

 Characteristics of actuaries

 How do I become an Actuary?

What Can I Do Now?

 Take classes that prepare you for college

 Take math classes every year and take AP exams

 Take computer science courses

 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 

In the school of business Offers Risk Management and Insurance major and classes Offers all actuarial courses every year Has an active student Actuarial club Produces a significant number of graduates each year Produces high quality graduates who are in demand by employers Connects to industry through advisory boards, campus speakers Employs at least one full-time credentialed actuary on faculty Actuarial Science specific career fair 

Close Connections to Industry

UW-Madison’s Actuarial Co-Curricular Learning Board

 Outside of the classroom learning opportunities with

Career Path of an Actuary

 One or more paid summer internships while in college

 Begin credentialing process while in college

 Find full time job after four year actuarial degree

 Finish credentialing process while being paid to work

 The Actuarial Profession

 Characteristics of actuaries

 How do I become an Actuary?

 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

kpeter@bus.wisc.edu

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

presenter1@xyz.com

 END OF

PRESENTATION

Actuaries at XYZ Insurance

 Highly visible positions

 Rotation program to give our actuaries broad

experiences

 Unique community of professionals

 Many actuaries in senior leadership roles

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

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

 Hole-in-one insurance for a charity golf outing

 Grand prize if someone hits a hole in one

 What information would you want to know to

correctly price this policy

Actuarial Exercise

 Number of golfers

 Quality of the golfers

 Difficulty of hole

 Value of the prize/Number of prizes

 Validation of hole in one