The Actuarial Path Aaron Stonacek, fsa, cfa November 2018 Thank you for the invitation to speak to you today about the actuarial profession and the SOA education system. <Introduce yourself and give a short summary of your background. There will be a section later for you to tell your story more completely.> Before we get started, I would like to start with a question…

What We’ll Cover… Me  You! What actuaries are… where you can find these people Exams (the new ones) Studying Internship-hunting Q&A Goal of today >>> to give you a critical view of the actuarial profession so you can take informed steps in your future actuarial/ non-actuarial lives Many actuaries work in the area of traditional insurance risks. This includes work in the area of: Health Design Health Savings Accounts Design and manage Reimbursement vs. Indemnity Life Design and price life insurance products Design and manage investment strategies Develop mortality tables Property/Casualty Estimate funds needed for unpaid insurance claims Design catastrophe insurance coverage Model retention changes Pension/Retirement Design Social Security funding Design 401k (US) or group RRSP (Canada) vs. employer-sponsored pension plan Design pension and benefits plans In fact, actuaries were the first professionals to manage risk and model financial implications based on the likelihood of future scenarios. Traditionally, actuaries have and continue to hold positions in the insurance industry in a number of specialties including: health, life, property and casualty. In the insurance industry, an actuary might calculate how much a company would charge for a new type of car, homeowners or health insurance. Or an actuary might calculate how much damage an earthquake, hurricane or a terrorist attack could cause.

What is… AN ACTUARY Most of you are actuarial students, so for me to start with this question may seem a bit puzzling. I’m interested in hearing your answers. ASK THE QUESTION – SO WHAT IS AN ACTUARY? After you get a few answers, give them your elevator speech on what an actuary is/does. Today’s actuaries are involved in more industries than ever before- expanding beyond insurance to new fields like broader financial services.

Actuaries… Analyze, measure, convert and manage risk into opportunity Use mathematical and statistical analytical skills, financial theory, business knowledge and an understanding of human behavior Develop and validate financial models to guide decision making Are creative problem solvers who see the “whole picture” So what do actuaries do? Well, you know that actuaries are business professionals who analyze and convert financial risk into opportunity using mathematics, statistics and financial theory. As a profession we are well known for our strong analytical skills, business knowledge and an understanding of human behavior that help us to provide solutions that turn risk into opportunity. This definition is a good overview of what actuaries “Do”– however, like I said before, the profession is being redefined and today’s actuaries are using these skills in new ways.

Traditional Opportunities Health Insurance Life Insurance Property/Casualty Insurance Pension/Retirement Many actuaries work in the area of traditional insurance risks. This includes work in the area of: Health Design Health Savings Accounts Design and manage Reimbursement vs. Indemnity Life Design and price life insurance products Design and manage investment strategies Develop mortality tables Property/Casualty Estimate funds needed for unpaid insurance claims Design catastrophe insurance coverage Model retention changes Pension/Retirement Design Social Security funding Design 401k (US) or group RRSP (Canada) vs. employer-sponsored pension plan Design pension and benefits plans In fact, actuaries were the first professionals to manage risk and model financial implications based on the likelihood of future scenarios. Traditionally, actuaries have and continue to hold positions in the insurance industry in a number of specialties including: health, life, property and casualty. In the insurance industry, an actuary might calculate how much a company would charge for a new type of car, homeowners or health insurance. Or an actuary might calculate how much damage an earthquake, hurricane or a terrorist attack could cause. Investments

Traditional Roles – Life Insurance Valuation/ Reserving Pricing Product Development/ Management Asset Liability Management (ALM) Enterprise Risk Management (ERM) Consulting Assumption review, model transformation, audit Many actuaries work in the area of traditional insurance risks. This includes work in the area of: Health Design Health Savings Accounts Design and manage Reimbursement vs. Indemnity Life Design and price life insurance products Design and manage investment strategies Develop mortality tables Property/Casualty Estimate funds needed for unpaid insurance claims Design catastrophe insurance coverage Model retention changes Pension/Retirement Design Social Security funding Design 401k (US) or group RRSP (Canada) vs. employer-sponsored pension plan Design pension and benefits plans In fact, actuaries were the first professionals to manage risk and model financial implications based on the likelihood of future scenarios. Traditionally, actuaries have and continue to hold positions in the insurance industry in a number of specialties including: health, life, property and casualty. In the insurance industry, an actuary might calculate how much a company would charge for a new type of car, homeowners or health insurance. Or an actuary might calculate how much damage an earthquake, hurricane or a terrorist attack could cause.

The Education Pathway

Three Designations/Credentials Associate of the Society of Actuaries Chartered Enterprise Risk Analyst Fellow of the Society of Actuaries The Society of Actuaries offers three designations/credentials

Associate of the SOA (ASA) Your focus as you begin to take exams should be on the ASA pathway. Start with either exam P (Probability) or FM (Financial Mathematics) depending on the coursework you have taken at school. Aim to pass two exams before graduation. Curriculum changes took place as of July 1, 2018. Key reasons for the changes include: Provide a greater balance between long- and short-term actuarial mathematics Increased knowledge of statistics New Predictive Analytics component

New Exams… Investment and Financial Markets (IFM) Mean-Variance Portfolio Theory, Asset Pricing Models, Market Efficiency, Investment Analysis, Capital Structure Forwards/ Futures/ Options, Binomial Pricing Models, Black- Scholes/ Greeks, Risk Management Statistics for Risk Modeling (SRM) Linear Models, Time Series Models, Principal Component Analysis, Decision Trees, Cluster Analysis Predictive Analytics (PA) Exam/ “Project” Five-hour “project” requiring analysis of a data set in the context of a business problem and submission of a report Use of Rstudio to complete Many actuaries work in the area of traditional insurance risks. This includes work in the area of: Health Design Health Savings Accounts Design and manage Reimbursement vs. Indemnity Life Design and price life insurance products Design and manage investment strategies Develop mortality tables Property/Casualty Estimate funds needed for unpaid insurance claims Design catastrophe insurance coverage Model retention changes Pension/Retirement Design Social Security funding Design 401k (US) or group RRSP (Canada) vs. employer-sponsored pension plan Design pension and benefits plans In fact, actuaries were the first professionals to manage risk and model financial implications based on the likelihood of future scenarios. Traditionally, actuaries have and continue to hold positions in the insurance industry in a number of specialties including: health, life, property and casualty. In the insurance industry, an actuary might calculate how much a company would charge for a new type of car, homeowners or health insurance. Or an actuary might calculate how much damage an earthquake, hurricane or a terrorist attack could cause.

The SIX specialty tracks of FSA Corporate Finance & Enterprise Risk Management Quantitative Finance & Investment Individual Life & Annuities Retirement Benefits Group & Health General Insurance (Property/Casualty) After you complete your ASA, you’ll choose a specialty track for your Fellowship level exams. The SOA offers six tracks to choose from. Your choice will likely be driven by your employer or the type of work you are doing when you reach this point. So, while it’s good to learn about the different tracks, this is not a decision you need to make now.

Getting Hired as an Actuary In closing I would like to share with you some additional resources the SOA has available.

Business Skills (Experience) What Employers Value Actuarial Credentials (Exams) Critical Business Skills (Experience) Employer research shows us that employers value actuaries’ rigorous training and credentials, but are also looking for someone who has critical business skills, this includes: Thinking outside the box Research Communication Presentation skills Leadership Flexibility Project management Vision Result-driven Team players Integrity Reliability Depends on the level: For some skills, it takes time to practice For entry-level, possess two of these skill sets will be valuable in addition to the basic skills Ability to communicate clearly and effectively

General Tips/ Advice Be Diligent Be Patient Expand your skillset Studying, interviewing, job-searching Be Patient Studying, interviewing, job-searching, within jobs Expand your skillset Coding, tutoring, communication and networking Don’t be afraid to veer “off-track” Many actuaries work in the area of traditional insurance risks. This includes work in the area of: Health Design Health Savings Accounts Design and manage Reimbursement vs. Indemnity Life Design and price life insurance products Design and manage investment strategies Develop mortality tables Property/Casualty Estimate funds needed for unpaid insurance claims Design catastrophe insurance coverage Model retention changes Pension/Retirement Design Social Security funding Design 401k (US) or group RRSP (Canada) vs. employer-sponsored pension plan Design pension and benefits plans In fact, actuaries were the first professionals to manage risk and model financial implications based on the likelihood of future scenarios. Traditionally, actuaries have and continue to hold positions in the insurance industry in a number of specialties including: health, life, property and casualty. In the insurance industry, an actuary might calculate how much a company would charge for a new type of car, homeowners or health insurance. Or an actuary might calculate how much damage an earthquake, hurricane or a terrorist attack could cause.

Resources In closing I would like to share with you some additional resources the SOA has available.

Learn more… ActuarialBookstore.com SOA.org BeAnActuary.org Here are some web resources for more information… SOA.org Beanactuary.org BeAnActuary.org ActuarialOutpost.com

SOA Candidate Connect Events E-newsletter Stand-alone and at larger SOA meetings E-newsletter Subscribe: http://soa.org/candidateconnect/ Sponsorship of other student events Midwest Actuarial Student Conference Actuarial Student National Association (ASNA) convention and case competition Gamma Iota Sigma (GIS) conference Candidate Connect is an important way the SOA connects with candidates and students. The candidate connect program does the following: Holds regular regional events and events at larger SOA meetings Publishes an e-newsletter twice a month. Anyone can subscribe. Sponsors other student meetings

Candidate Connect Community The Candidate Connect Community is an online forum to connect with other candidates, get announcements and learn more about SOA resources etc. Connect with other students from around the world!

SOA Sections Professional Interest Groups Section Benefits: Networking opportunities Professional development Newsletters on industry trends Podcasts Online discussion forums Research opportunities About SOA Sections The Society of Actuaries sponsors 20 professional interest groups, known as sections, which are formed around common business topics or specific areas of actuarial practice. Unlike the overall organization, you do not need to be an SOA member to join a section. In fact, in most cases, you don’t even need to be a practicing actuary—and you can join more than one section. Each section has a mission statement and adheres to the SOA professional interest section bylaws. Section Benefits Being a section member comes with benefits that include networking opportunities, professional development, newsletters, podcasts and online discussion forums. Learn more. Sections produce relevant content each year, including: More than 40 webcasts More than 300 meeting sessions More than 50 podcasts Numerous seminars and boot camps As a member of any of these knowledge communities, you’ll have a chance to participate in the following ways.  Network: Interact with fellow professionals with similar interests and challenges.  Share Information: Communicate what you already know to fellow section members and promote interesting discussions on emerging issues. Publications: Read about trends in section and Society publications and contribute articles to section newsletters, websites and other publications.  Professional Education: Participate in a variety of educational forums focused on today's most relevant and pressing challenges. Create section-sponsored sessions at events and industry seminars. Contribute ideas to better define the basic and continuing education needs of actuaries.  Research: Participate in research activities. Dive into research that provides you with new insights, information or tools to enhance and improve your work. (*NOTE: You do have to be an SOA Member to take part in elections and serve on a council, but otherwise, you don’t need to be a member to join!)

Questions?