HOW ACTUARIES SEE THE WORLD

WHAT IS AN ACTUARY?

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PART SUPER-HERO. PART FORTUNE-TELLER.
PART TRUSTED ADVISOR.

ACTUARIES ARE EXPERTS IN:

• Evaluating the likelihood of future events—using numbers,

not crystal balls.

• Designing creative ways to reduce the likelihood of

undesirable events.

• Decreasing the impact of undesirable events that do occur.

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WHAT DO ACTUARIES DO?

WE MANAGE RISK

•Actuaries use a combination of strong analytical skills,

business knowledge, and understanding of human
behavior to manage today's complex risks facing our
society.

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 WHAT DOES RISK
HAVE TO DO WITH IT?

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THE FUTURE IS UNCERTAIN AND
FULL OF RISK.

WHAT IS RISK?

• Risk is the chance that an undesirable

event will occur, but risk is also opportunity.
That's where we come in.

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YOUR TURN!
It’s your turn to
be the actuary.
Try your hand at
forecasting the
future with these
sample problems.

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AUTO PRICING 101
BACKGROUND:
•ABC Insurance Company
insures 1,000 eighteen year old
drivers.
•Assume 300 of the 1,000 have
accidents within a year.
•Assume the average repair
cost for each accident is $500.
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QUESTION: WHAT IS THE
MINIMUM PREMIUM THAT
ABC SHOULD CHARGE
AN 18-YEAR OLD FOR A 1-
YEAR CAR INSURANCE
POLICY?
AUTO PRICING
AUTO PRICING101 101

SOLUTION:
•At a minimum, the total CHALLENGE: SHOULD
premiums collected must equal ABC CHARGE MORE THAN
the total cost of the accidents. THIS PREMIUM? IF SO,
•Estimated cost of the WHY?
accidents:
300 × $500 = $150,000
•Minimum premium for each
driver:
$150,000 ÷ 1,000 = $150

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AUTO PRICING
AUTO PRICING101 101

BACKGROUND:
•Assume 400 of the drivers are QUESTION: WHAT
males and 600 are females. PREMIUM SHOULD BE
•Assume 200 out of 300 of CHARGED FOR THE
accidents will involve males, MALES AND THE
and the remaining 100 FEMALES? SHOULD IT BE
accidents will involve females. THE SAME?

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AUTO PRICING 101

SOLUTION:
•Total males’ premium: THE MALE’S PREMIUM
200 accidents × $500 per SHOULD BE THREE TIMES
accident = $100,000 THE FEMALE’S
•Each male’s premium: PREMIUMS!
$100,000 ÷ 400 males =
$250
•Total females’ premium:
100 accidents × $500 per
accident = $50,000
•Each female’s premium:
$50,000 ÷ 600 females =
$83.33
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WHY DID YOU WHAT’S GREAT
BECOME AN ABOUT THE
ACTUARY? PROFESSION?

LIFE AS AN
ACTUARY…
WHAT IT’S LIKE …
WHERE DO
ACTUARIES
WORK?

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NOT JUST INSURANCE.

Although insurance companies can’t function without actuaries,

that’s not the only place you’ll find us.

• Consulting
• The Government
• Rating bureaus
• Colleges and universities
• Banks and investment firms
• Public accounting firms

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WHAT’S GREAT ABOUT THE PROFESSION?

TOP-RANKED JOB

•No matter the source, actuary is consistently rated as one of the

best jobs. US News and World Report, the Jobs Rated Almanac,
CNN Money, and others all agree.

GREAT SALARY

•Actuaries are well compensated. Experienced fellows have the

potential to earn from $150,000 to $250,000 (USD) annually, and
many actuaries earn more than that.
•Actuaries earn while they learn. An entry level actuary with 1-2
exams passed will bring in a starting salary of $45-$65,000 (USD)
depending on region.

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WHAT’S GREAT ABOUT THE PROFESSION?

JOB SECURITY:

•Actuaries enjoy certainty in uncertain times. We're always in

demand as the world confronts risk.

LIFE IN BALANCE:

•More than a fulfilling career, being an actuary allows you to

maintain a low-stress, highly sought-after work/life balance.

MAKE AN IMPACT:

•Actuaries manage today's complex risks facing our society.

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WHERE WILL I LIVE?

CAS SOA
GEOGRAPHIC REGION MEMBERSHIP (%) MEMBERSHIP (%)

United States
WHAT 84.6
IS AN ACTUARY 68.6

Canada 8.6 17.6

International members 6.8 13.8

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WHERE WILL I LIVE?

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WHY DID YOU BECOME AN ACTUARY?

• How I found out about the profession

• Why I became an actuary

• What I like best about being an actuary

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LET’S COVER SOME
BASICS…

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HOW DO I GET STARTED?

If you want to be an actuary, start preparing now!

• Follow a college preparatory curriculum of high school classes.

• Take math classes every year.

• Take advantage of Advanced Placement (AP) and advanced

courses such as statistics and calculus.
• Enroll in computer science courses to develop your computer skills.

• Explore colleges and universities that offer actuarial science

curriculum.

• Look into scholarship opportunities.

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WHAT ABOUT COLLEGE?

• Among the college majors you might choose: actuarial science,

math, statistics, economics, business and finance.

• Your equation for success should include the following courses:

- finance
- microeconomics and macroeconomics
- calculus
- linear algebra
- calculus-based probability and statistics
- actuarial science courses, as available
- computer science courses
- business courses, such as marketing
- communication courses, such as speech, business writing and
technical writing

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HOW DO I STAND OUT?

While you’re hitting the books, don’t forget to

• Apply for scholarships. There are a number of scholarships open

exclusively to actuarial students.

• Look for internship opportunities. An internship will give you a head

start on an actuarial career with relevant work experience.

• Get involved with your actuarial or math club, if your school has one.

• Talk to an actuary.

• Start taking exams!

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DIVERSITY
PROGRAMS…

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TO DO THIS, WE ACTIVELY SUPPORT:

• Summer actuarial programs for high school students so students

can get comfortable with the profession.

• Reimbursements for qualified minority students who pass either

of their first two exams.

• Opportunities for those who want more guidance on what it

takes to be a professional in today’s economy.

• Scholarship opportunities are available from the Actuarial

Foundation and other organizations.

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FIND OUT MORE…

Follow us:
QUESTIONS?

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