Consider a Career as an Actuary Presenter 1, XYZ Insurance Company Presenter 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

Agenda The Actuarial Profession Characteristics of actuaries Why Become an Actuary? Steps to become an Actuary Wrap-up and Questions

Agenda The Actuarial Profession

Math Related Professions ACTUARY Engineer Computer systems analyst Economist Statistician

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 Government Others – where quantifying risk is needed (management consultants, investment firms)

Desirable Skills for Actuaries Good analytical and problem solving skills Strong computer skills Good business acumen 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

Agenda 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

Agenda The Actuarial Profession Characteristics of actuaries Why Become an Actuary?

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) 1. Mathematician 2. Actuary 3. Statistician 4. Biologist 5. Software Engineer Ranking of 200 professions Factors of evaluation: Stress, Work Environment, Physical Demands, Income and Outlook

Employment Statistics (U.S.) Source: U.S. Bureau of Labor Statistics Growth Employment Category % Food and beverage serving7,442,000993, % Accountants and auditors1,274,000226, % Physicians and Surgeons633,00090, % Lawyers761,00084, % Athletes, coaches, umpires18,0003, % Actuaries18,0004, %

Financial Rewards Wisconsin School of Business Undergraduate Starting Salaries ( academic year) Credentialed actuaries with years of experience can make in excess of $100,000 a year Source: WSOB salary survey, DW Simpson salary survey MajorAverage 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

Agenda The Actuarial Profession Characteristics of actuaries Why Become an Actuary? 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 industry professionals Unique opportunities to interact and learn about the industry Structured learning events, informal lunches, social events

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

Agenda The Actuarial Profession Characteristics of actuaries Why Become an Actuary? How do I become an Actuary? Wrap-up and Questions

Actuarial Web Resources Be an Actuary: Society of Actuaries: Casualty Actuarial Society: Actuarial Foundation:

UW-Madison Resources UW-Madison Faculty Contact: Kirk Peter UW-Madison Actuarial Science, Risk Management and Insurance Department: UW-Madison Actuarial Club:

XYZ Insurance Resources XYZ Homepage: XYZ.com XYZ Actuarial Contact: Presenter 1

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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 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 = 1/365 n 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 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