You Can Be an Actuary! Jarrett Cabell, FCAS Kezia Charles, ASA, EA Presented By Jarrett Cabell, FCAS Kezia Charles, ASA, EA

Overview Introduction What does the future hold for you? (Prospects / Risks) What is an actuary? What do actuaries do? Where do actuaries work? What skills are needed to become an actuary? How do I become an actuary? What is the current and future career outlook for actuaries? Conclusion (Advice, Helpful Links, Q&A)

Overview Introduction What does the future hold for you? (Prospects / Risks) What is an actuary? What do actuaries do? Where do actuaries work? What skills are needed to become an actuary? How do I become an actuary? What is the current and future career outlook for actuaries? Conclusion (Advice, Helpful Links, Q&A)

Introduction Kezia Charles, ASA, EA Jarrett Cabell, FCAS Henderson County High School (KY) Washington University in St. Louis (Mathematics, ’06) Allstate (since July ‘09); Zurich North America (3 years) Work in Property & Casualty sector (“P&C”) Kezia Charles, ASA, EA St Joseph’s Convent (POS, Trinidad) MIT (Mathematics, ’04) Watson Wyatt/Towers Watson (2004 – Present) Work in Pension Consulting

Overview Introduction What does the future hold? (Prospects / Risks) What is an actuary? What do actuaries do? Where do actuaries work? What skills are needed to become an actuary? How do I become an actuary? What is the current and future career outlook for actuaries? Conclusion (Advice, Helpful Links, Q&A)

What Does the Future Hold? Prospects (“Desirables”) Health & Wellness Successful Careers Homes & Neighborhoods Vacation Retirement in Jamaica Identify prospects

What Can Thwart Your Future? Risks (“Undesirables”) Illness (injuries, disability) Insecurity (job layoffs, financial burdens) Accidents Man-made (home, auto, work place) Acts of nature (earthquake, hurricane, tornado) Crime (theft, arson, murder, terrorism) Death Accidents – (auto, home, earthquake, hurricane, tornado)

Overview Introduction What does the future hold for you? (Prospects / Risks) What is an actuary? What do actuaries do? Where do actuaries work? What skills are needed to become an actuary? How do I become an actuary? What is the current and future career outlook for actuaries? Conclusion (Advice, Helpful Links, Q&A)

What is an actuary? An actuary: Analyzes, manages, and measures the financial implications of future risk Develops financial models to guide decision making Serves as the analytical backbone of our society’s financial security programs (i.e., insurance, Social Security, pensions)

What do actuaries do? Evaluate likelihood of future events Forecast potential impact of catastrophes Calculate expected lifetime of retiree receiving pension benefits Design creative ways to reduce the likelihood of undesirable events Life insurance policy, annuity Promote safety (e.g., seat belts) Decrease the impact of undesirable events that do occur Death benefits Retirement benefits Indemnity benefits Use example of Avian (Bird) Flu.

What do actuaries do? Participate in corporate planning Mergers & Acquisitions Evaluate investment programs Help insurance companies: Calculate rates for new insurance products Forecast and interpret underwriting results Maintain databases uniquely suited for the analysis of pricing issues

Where do actuaries work? Actuaries are largely employed by insurance companies and consulting firms, specializing in the following areas: Life, Annuities, and Mutual Funds Health Pensions Property & Casualty

Life, Annuities, and Mutual Funds 1) Life Insurance Offers several term and permanent insurance products to provide death benefit protection to its customers. 2) Annuities Fixed and variable annuity products allow customers to make a lump-sum payment or series of payments today in return for periodic payments beginning immediately or in the future. 3) Mutual Funds A mutual fund pools the assets of multiple investors and purchases securities to achieve a common, pre-defined goal. With its pooled assets, mutual funds provide advantages that an individual investor would not be able to receive. Source: http://www.thehartford.com

Source: http://www.aetna.com Health 1) Individual Offers Medicare and other health products to individuals, families, and sole proprietors. 2) Employers Offers administration services, Health Benefit and Health Insurance Plans incorporating managed medical, pharmacy and dental care services and other valuable resources and products based on employer size. An example: Small Group – 2 to 50 employees Middle Market – 51 to 3000 employees National Accounts – 3001+ employees Source: http://www.aetna.com

Source: http://wikipedia.org Pensions Provide steady income, typically in the form of a guaranteed annuity, to a retired or disabled employee under pre-determined legal and/or contractual terms. Plans can be divided into two broad types: 1) Defined benefit plans - incorporate the employee's pay, years of employment, age at retirement, and other factors in calculating the benefit. 2) Defined contribution plans - such as a 401(k) plan or 403(b) plan, in which the employee elects to defer some amount of his/her salary into the plan and bears the investment risk. Source: http://wikipedia.org

Source: http://www.travelers.com Property & Casualty 1) Business Insurance Offers a broad array of property and casualty insurance and insurance-related services to its clients, which range from small “Main Street” businesses to Fortune 100 corporations.  2) Personal Insurance Offers a broad array of property casualty insurance products to individual customers such as Auto, Homeowners, etc… 3) Financial, Professional & International Insurance Includes surety and financial liability coverages, as well as property and casualty products that are primarily marketed on an international basis. Source: http://www.travelers.com

What Skills are Needed to Become an Actuary? Keen analytical, project management, and problem-solving skills Good business acumen Excellent communication skills (oral and written) Solid computer skills (Microsoft Office) Strong work ethic (especially for the exam process!) Motivation Creativity Independence Ability to collaborate effectively with others

Overview Introduction What does the future hold for you? (Prospects / Risks) What is an actuary? What do actuaries do? Where do actuaries work? What skills are needed to become an actuary? How do I become an actuary? What is the current and future career outlook for actuaries? Conclusion (Advice, Helpful Links, Q&A)

How do I become an actuary? Professional designation is achieved by passing a series of examinations Actuarial examinations are administered by the Casualty Actuarial Society (CAS) and the Society of Actuaries (SOA) Examinations are held multiple times a year Two levels of membership in each organization: Associate (ACAS or ASA) Fellow (FCAS or FSA) You work AND take exams!

Actuarial Student Programs To prepare you for success in completing the series of professional exams, most companies offer the following benefits: 100 to 140 paid study hours per exam sitting Reimbursement for exam registration fees, study materials, and a preparatory exam seminar Time off on exam days and the day prior to each exam Receive rewards for each exam you pass!

What do the exams cover? Preliminary Exams Joint exams (for which both societies give credit) P/1: Probability FM/2: Financial Mathematics MFE/3F: Financial Economics C/4: Actuarial Models SOA’s MLC (Life Contingencies) vs. CAS’s 3L (Life Contingencies & Statistics)

How to Prepare for Exams Set up a study schedule Go through the syllabus The syllabus for each exam is on the SOA/CAS website Be sure that you have covered all the material before the exam Get a study manual (e.g. ASM, Actex) Exam Seminars

How to Prepare for Exams Take practice exams Study groups Know your study style Do you study better in mornings or evenings? Can you study for long blocks of time or would shorter blocks on more days work better?

What do the exams cover? Upper-Level Exams: Vary by discipline: SOA: Retirement Benefits; Group & Health Design & Pricing; Individual Life & Annuities; Investments CAS: Introduction to P&C Insurance/Pricing; Reserving; Accounting/Annual Statement; Advanced Financial Management; Advanced Pricing

Exam Statistics See next page

Exam Statistics

Overview Introduction What does the future hold for you? (Prospects / Risks) What is an actuary? What do actuaries do? Where do actuaries work? What skills are needed to become an actuary? How do I become an actuary? What is the current and future career outlook for actuaries? Conclusion (Advice, Helpful Links, Q&A)

Salary Information Starting salaries of $46,000-$65,000 (passed one exam, 0 - 0.5 years experience) Merit-based increases (contingent upon workplace performance) Exam passing increases Increases upon achievement of professional designations Source: D.W. Simpson & Company Website: http://www.dwsimpson.com/salary.html

Salary Survey Preface to the forthcoming salary survey slides: These figures serve as a general range and average of various compensation levels These figures are base salaries only and do not figure in bonuses or annual incentives Last Updated: October 2009 http://www.dwsimpson.com/salary.html

Life / Health Actuary 0-0.5 yrs 0.5- 2.5- 4.5- 6.5- 9.5- 14.5- 19.5+   (excl. sign-on) 2.5 yrs 4.5 yrs 6.5 yrs 9.5 yrs 14.5 yrs* 19.5 yrs* yrs* 1 course 46-62 51-66 55-72 2 courses 49-67 60-77 64-82 3 courses 52-69 57-76 63-83 67-88 (MLC+MFE=1) 4 courses 54-71 61-83 67-89 72-96 75-103 5 courses 65-88 80-108 84-118 (or 4 + FAP I) ASA 73-98 78-108 88-119 93-132 98-146 109-234 115-252+ 7 courses 95-137 8 courses 105-147 FSA 95-148 101-158 110-174 127-220 144-324 149-341+ Life/Health/Pension combined-CEO/CFO/CIO/COO/Pres.-10th-90th% N/A TBD data points - from 2009 SEC Def 14A filings

Pension Actuary 0-0.5 yrs 0.5- 2.5- 4.5- 6.5- 9.5- 14.5- 19.5+   (excl. sign-on) 2.5 yrs 4.5 yrs 6.5 yrs 9.5 yrs 14.5 yrs* 19.5 yrs* yrs* 1 course 47-62 51-64 55-70 2 courses 53-66 60-76 63-81 3 courses 53-70 58-72 63-85 66-91 72-95 (MLC+MFE=1) 4 courses 55-73 61-79 68-90 73-100 78-106 5 courses 67-88 71-94 76-104 80-112 (or 4 + FAP I) ASA 68-91 74-99 81-111 85-117 103-155 123-237 140-258+ 7 courses 89-129 8 courses 103-144 FSA 97-134 108-163 133-205 147-321 150-344+ Life/Health/Pension combined-CEO/CFO/CIO/COO/Pres.-10th-90th% N/A TBD data points - from 2009 SEC Def 14A filings

Property & Casualty Actuary 0-0.5 yrs 0.5- 2.5- 4.5- 6.5- 9.5- 14.5- 19.5+   (excl. sign-on) 2.5 yrs 4.5 yrs 6.5 yrs 9.5 yrs 14.5 yrs* 19.5 yrs* yrs* 1 exam 48-65 51-66 55-72 2 exams 51-68 60-77 65-82 3 exams 53-70 57-77 66-84 69-89 73-100 4 exams 57-74 62-84 69-92 75-99 75-109 93-138 5 exams 65-89 73-104 80-112 83-126 97-149 6 exams 71-94 80-113 87-124 97-140 110-170 ACAS 81-110 84-124 92-137 105-160 119-185 135-266 152-305+ 8 exams 91-133 104-155 111-174 134-224 FCAS 120-184 134-215 154-329 171-439 179-478+ CEO/CFO/COO/CIO/CRO/President - 10th-90th percentile N/A TBD data points - from 2009 SEC Def 14A filings

Career Outlook for Actuaries Expected growth of 21% from 2008-2018 Specific Areas of Growth Management Consulting; Financial Management: > 21% Insurance Industry: < 21% Other Areas of Growth Enterprise Risk Management Health Services Source: www.bls.gov

Overview Introduction What does the future hold for you? (Prospects / Risks) What is an actuary? What do actuaries do? What skills are needed to become an actuary? How do I become an actuary? What is the current and future career outlook for actuaries? Conclusion (Advice, Helpful Links, Q&A)

Advice to High School Students Who Want to be Actuaries Follow a college preparatory curriculum Take math classes every year Take advantage of advanced courses, such as calculus Enroll in computer science courses to develop your computer skills Explore colleges and universities that offer Actuarial Science curriculum Participate in math-based competitions such as Mathletes

Advice to College Students Who Want to be Actuaries Develop disciplined study habits Take a well-rounded curriculum There are people in the actuarial profession who majored in Music, Biology, etc., who were able to attain their designations. However, the majors that would better prepare you for this profession are: - Actuarial Science - Mathematics - Economics - Statistics - Finance Enhance your general business knowledge Sharpen your communication and presentation skills Take actuarial exams while you are in school – the sooner you start, the sooner you will finish!!!

Which Skills Can I Sharpen while in college . . . and How? Interpersonal Skills Speeches (e.g., Toastmasters) Involvement in college (or local) actuarial organizations (e.g., IABA!) Writing Skills Don’t immediately shy away from writing-intensive electives—they could help you in the long run! Technical Skills Microsoft Office (Excel, Word, Access, PowerPoint), VBA, SQL, SAS, C++

Which Skills Can I Sharpen while in college . . . and How? Current Events Wall Street Journal, New York Times, Insurance Journal, etc. should be helpful here Additional Resources Career Counselor, Academic Advisor, Math Professor People you meet here at the Annual Meeting IABA Mentors and Mentor Resources Recruiters

Top 10 Reasons to Consider Being an Actuary 10. You enjoy continually learning.   9. You want a professional title, but don’t want to be a doctor, lawyer, or accountant.   8. You want a career that is dynamic and challenging.   7. You want a career that you can control because advancement early in one’s career is largely exam-based.   6. You want a career with many opportunities that will provide you with skills that are transferable across multiple industries.   5. You want a career with superior job security through economic cycles.   4. You would like to “earn while you learn.”   3. You want to be able to choose among several job offers.   2. You are self-motivated, goal oriented, and have superior math aptitude and communication skills.   1. You want a highly competitive salary and excellent benefits.

Helpful Links To learn more, visit www.blackactuaries.org www.beanactuary.org www.casact.org www.soa.org

Questions? ???

A Brief History of the IABA Founded in 1992 as the National Association of Black Actuaries (NABA), the International Association of Black Actuaries (IABA) was created in recognition that blacks represented less than 1% of the actuarial profession in areas where the population of blacks is greater than 15% NABA was changed to IABA recognizing that two of its charter members, Daisy McFarlane-Coke and W. St. Elmo Whyte, are both from Jamaica

A Brief History of the IABA The issue of representation is critical because of its root causes: 1) lack of awareness among black children about the profession, 2) lack of support through the exam process, 3) lack of advocacy during career development, and 4) lack of role models for self visualization IABA exists to address this issue and its root causes.

A Brief History of the IABA IABA seeks to address the issue of representation through: 1. High School Awareness Programs, 2. Collegiate Scholarships and Professional Development Workshops, 3. Mentoring Programs 4. Professional Continuing Education Workshops (including the Annual Meeting), 5. Professional Networking and Relationship Building, 6. Exam Success Recognition, and 7. Exam Study, Resource, and Emotional Support