Vault Guide To Actuarial Careers (2007)
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ACTUA
CAREE
GUDE
VAULT GUIDE TO
ACTUARIAL
CAREERS
3M | A.T. Kearney | ABN Amro | AOL Time Warner | AT&T | AXA | Abbott Laboratories
| Accenture | Adobe Systems | Advanced Micro Devices | Agilent Technologies | Alcoa
Inc. | Allen & Overy | Allstate | Altria Group | American Airlines | American Electric
Power | American Express | American International Group | American Management
Systems | Apple Computer | Applied Materials | Apria Healthcare Group | AstraZeneca
Automatic Data Processing | BDO Seidman | BP | Bain & Company | Bank One | Bank of
America | Bank of New York | Baxter | Bayer | BMW | Bear Stearns | BearingPoint
BellSouth | Berkshire Hathaway | Bertelsmann | Best Buy | Bloomberg | Boeing | Booz
Allen | Borders | Boston Consulting Group | Bristol-Myers Squibb | Broadview
International| Brown Brothers Harriman | Buck Consultants| CDI Corp.| CIBC World
Markets | CIGNA | CSX Corp| CVS Corporation | Campbell Soup Company| Cap Gemin
Ernst & Young| Capital One | Cargill| | Charles Schwab | ChevronTexaco Corp. | Chiquita
Brands International | Chubb Group | Cisco Systems | Citigroup | Clear Channel | Clifford
Chance LLP | Clorox Company | Coca-Cola Company | Colgate-Palmolive | Comcast
Comerica | Commerce BanCorp | Computer Associates | Computer Sciences
Corporation | ConAgra | Conde Nast | Conseco | Continental Airlines | Corning
Corporate Executive Board | Covington & Burling | Cox Communications | Credit Suisse
First Boston | D.E. Shaw | Davis Polk & Wardwell | Dean & Company | Dell Computer
Deloitte & Touche | Deloitte Consulting | Delphi Corporation | Deutsche Bank | Dewey
Ballantine | DiamondCluster International | Digitas | Dimension Data | Dow Chemical
Dow Jones | Dresdner Kleinwort Wasserstein | Duracell | Dynegy Inc. | EarthLink
Eastman Kodak | Eddie Bauer | Edgar, Dunn & Company | El Paso Corporation
Electronic Data Systems | Eli Lilly | Entergy Corporation | Enterprise Rent-A-Car | Ernst
& Young | Exxon Mobil | FCB Worldwide | Fannie Mae | FedEx Corporation | Federa
Reserve Bank of New York | Fidelity Investments | First Data Corporation | FleetBoston
Financial | Ford Foundation | Ford Motor Company | GE Capital | Gabelli Asset
Management | Gallup Organization | Gannett Company | Gap Inc | Gartner | Gateway
Genentech | General Electric Company | General Mills | General Motors | Genzyme
Georgia-Pacific | GlaxoSmithKline | Goldman Sachs | Goodyear Tire & Rubber | Grant
Thornton LLP | Guardian Life Insurance | HCA | HSBC | Hale and Dorr | Halliburton
Hallmark | Hart InterCivic | Hartford Financial Services Group | Haverstick Consulting
Hearst Corporation | Hertz Corporation | Hewitt Associates | Hewlett-Packard | Home
Depot | Honeywell | Houlihan Lokey Howard & Zukin | Household International | IBM
IKON Office Solutions | ITT Industries | Ingram Industries | Integral | Intel | Internationa
Paper Company | Interpublic Group of Companies | Intuit | Irwin Financial | J. Walter
Thompson | J.C. Penney | J.P. Morgan Chase | Janney Montgomery Scott | Janus
Capital | John Hancock Financial | Johnson & Johnson | Johnson Controls | KLA-Tencor
Corporation | Kaiser Foundation Health Plan | Keane | Kellogg Company | Ketchum
Kimberly-Clark Corporation | King & Spalding | Kinko's | Kraft Foods | Kroger | Kurt
Salmon Associates | L.E.K. Consulting | Latham & Watkins | Lazard | Lehman Brothers
Lockheed Martin | Logica | Lowe's Companies | Lucent Technologies | MBI | MBNA
Manpower | Marakon Associates | Marathon Oil | Marriott | Mars & Company | McCannErickson | McDermott, Will & Emery | McGraw-Hill | McKesson | McKinsey & Company
| Merck & Co. | Merrill Lynch | Metropolitan Life | Micron Technology | Microsoft | Miller
Brewing | Monitor Group | Monsanto | Morgan Stanley | Motorola | NBC | Nestle | Newel
Rubbermaid | Nortel Networks | Northrop Grumman | Northwestern Mutual Financia
Network | Novell | O'Melveny & Myers | Ogilvy & Mather | Oracle | Orrick, Herrington &
Sutcliffe | PA Consulting | PNC Financial Services | PPG Industries | PRTM | PacifiCare
Health Systems | PeopleSoft | PepsiCo | Pfizer
| Pillsbury Winthrop | Pitney
Go| Pharmacia
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Bowes | Preston Gates & Ellis | PricewaterhouseCoopers | Principal Financial Group
Procter & Gamble Company | Proskauer Rose | Prudential Financial | Prudentia
Securities | Putnam Investments | Qwest Communications | R.R. Donnelley & Sons
Workplace culture
Compensation
Hours
Diversity
Hiring process
ACTUA
CAREE
GUDE
VAULT GUIDE TO
ACTUARIAL
CAREERS
DEREK LOOSVELT
AND THE STAFF OF VAULT
ACKNOWLEDGMENTS
We are extremely grateful to Vaults entire staff for all their help in the editorial,
production and marketing processes. Vault also would like to acknowledge the
support of our investors, clients, employees, family, and friends. Thank you!
page viii
Table of Contents
INTRODUCTION
THE SCOOP
The Lowdown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
A Brief History of Actuaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
Actuaries Today . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
The Actuarial Societies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
Industry Trends
19
Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
Pension Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
Financial Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
Government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
Corporate America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
Career Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
Rising Up the Ladder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
GETTING HIRED
27
Where to Start
29
Personality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
Undergraduate Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
Graduate Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37
Internships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
45
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ON THE JOB
Career Decisions
59
61
Lifestyle
67
Salary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .67
A Word on Diversity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .69
Other Pros and Cons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70
FIRM PROFILES
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APPENDIX
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Introduction
Sometimes bad things happen. Now and then, good things happen, too. And
one could make the case that people-and companies-spend most of their time
trying to avoid the bad and maximize the good. Some people even do that for
a living, and in todays complex business environment, actuaries are the
masters of identifying, mitigating and minimizing risk.
Once primarily working in the insurance industry, actuaries are now found
throughout corporate America, helping executives make intelligent and
informed financial decisions. In addition to helping insurers mitigate the
chances of losses, actuaries weigh risk in pension funds, stock and bond
portfolios and even hedge funds.
And the actuarys role has moved beyond the financial industry. Companies
dealing in commodities, such as oil conglomerates or mining concerns, use
actuaries to help weigh the risks and rewards of new exploration or current
pricing strategies. And nearly any company can now employ an actuary to
help determine and alleviate risks for any business venture-launching a new
product, perhaps, or expanding production facilities.
Its inaccurate to say that actuaries hate risk. Theyll be the first to tell you
that risk is an inherent part of doing business-an inherent part of life, reallyand that their job isnt to avoid risk. Instead, they face risk head on, weighing
the chances of any given eventuality and coming up with solutions to take
advantage of the good possible outcomes and minimize the fallout from the
bad.
An actuarial career is one of the most creative options a statistician,
economist or mathematician can have. We are the academics in the business
world, says Ron Gebhardtsbauer, senior pension fellow at the American
Academy of Actuaries. Yes, a strong mathematics background is necessary,
but applying those skills to real-life situations is a creative challenge.
Actuaries are required to think beyond the narrow constraints of numbers or
business plans to ferret out unforeseen risk and plan for it. The combination
of out-of-the-box thinking and scientific analysis makes actuarial careers
some of the most challenging in the business world.
Theyre also among the most rewarding jobs out there. Salaries right out of
college range from $40,000 to $50,000, and by the time youre finished
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taking all of the necessary licensing exams and have some experience,
$150,000 to $250,000 salaries arent uncommon.
An actuarial career demands diligence and hard work. In addition to college
and university experience, the Society of Actuaries and the Casualty Actuarial
Society-the two main organizations within the profession-offer a series of
exams, which many employers require. There are no less than seven exams
for actuaries to become associates of the CAS, and another two for full
fellowship. The SOA has a point-based system of courses and exams, but the
result is the same. Be prepared to take a lot of tests throughout the early part
of your career, even before you receive your bachelors degree.
As an actuary, youll be weighing in on major decisions every day, and your
analyses will be used by top decision makers in the financial world. To say
that the actuarys work can make or break a company isnt the massive
overstatement one would think. When companies venture into unknown
territory, its the actuary that helps navigate a path.
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Well also discuss the basic and ongoing education for actuaries, and how you
can prepare for a career as an actuary. Finally, well tell you about real
actuaries throughout the nation and the different roles they play.
Actuarial careers are widely regarded as some of the best in America. This
book will show you how to get there.
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ACTUA
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THE SCOOP
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Actuaries and
Actuarial Science
CHAPTER 1
How about a career in a growth industry, with long-term security and welldefined performance metrics? Throw in immense intellectual challenges, the
opportunity to work with some of the brightest minds and most powerful
companies in the business world, and even the chance to climb to the top
ranks of American executives. Oh, and lets add one of the best base salaries
in the American workplace and consistent rankings in a variety of best jobs
in America surveys.
Interested? Welcome to a career in actuarial science.
The Lowdown
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lane? If so, what kind of cars? The difference between swerving into the path
of a Toyota Camry and an 18-wheeler is profound. And what about the cars
behind the car in front of which the pedestrian stepped out? What if the
person hit by the car is thrown into the other lane? Or the sidewalk? As you
can see, one simple (and admittedly macabre) action has a million possible
outcomes, and a million possible risks involved. Of course, in this case,
having the pedestrian not walk into the street mitigates all of those risk
factors.
The above example consists of one variablewhether the pedestrian takes
the wrong step off a curb. Now ponder how an actuary might manage risk
within a life insurance company with two million policyholders. The life
expectancy of one person takes into account hundreds of variables, including
eating habits, smoking, drinking, where the person lives, what he or she does
for a living, family life, number of children, pets, family history of illness
the list goes on. Then multiply that by two million, and finally ask yourself
the big question: How much should each person pay each month so that the
company can fulfill its payout obligations to each and every one of them at
the end of their lives, whenever that might be?
Answering that question is at the very core of what actuaries do. Through
advanced probability models and statistical analysis, actuaries make the
assumptions needed to ensure that insurance policies, pensions and other
financial programs meet their obligations and, ideally, make a profit for the
companies running them.
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From the fall of Rome, however, it took mathematics and business theory more
than 1,000 years to get to the point wherein they could be advanced further.
Edmund Halley was best known for discovering of the comet that now bears his
name. However, he also helped found modern actuarial science. In 1693,
Halley made a study of the population in the German town of Breslau. Through
careful recording of births, deaths and the aging population, Halley compiled a
mortality table. That bit of mathematics, using probability theories developed
just a few decades before, allowed Halley to accurately predict the likelihood of
a given person dying in any given year.
That, in essence, is the very foundation of the life insurance industry. By the
ability to predict life expectancy, Halley was able to determine how much to
charge a given person in premiums to cover burial costs. A generation later,
English mathematician James Dodson created an entire framework for the
creation of a mutual life insurance company, but died in 1757five years
before the Society for Equitable Assurances for Lives and Survivorship was
founded in London. The term actuary was coined in London in 1762 by the
Equitable, which first used scientifically calculated premium rates. The term,
which referred to the Equitables chief executive, had previously only been
used in church courts in reference to those who recorded the acts of the
court. (Equitable Life continues to this daythough a pension crisis in 2000
nearly caused the company to collapse.)
Modern actuaries
Life insurance companies thrived in London, and by the dawn of the 19th
Century, they had taken root in Englands former colonies. According to the
Society of Actuaries, the first actuary active in the nascent U.S. was Jacob
Shoemaker of Philadelphia, who in 1809 helped found the Pennsylvania
Company for Insurances on Lives and Granting Annuities. Other companies
followed, and the first mutual life insurance companies formed in the 1840s
through the creation of Mutual Life of New York and the New England Mutual
of Boston. It was also around the time when the first independent consulting
actuary in the U.S., John F. Entz, began a career that spanned 32 years and paved
the way for the introduction of actuarial science into individual companies
through management of insurance policies and pensions.
The forerunner of modern actuarial societiesand thus modern actuary
sciencewas created on April 26, 1889, at the end of a two-day meeting at
New York Citys Astor House. The new Actuarial Society of America was the
latest in a long line of failed attempts at organizing the nations actuaries, but
this time egos were put in check and mutual respect thrived. Indeed, the
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actuarial industry showed early signs of diversity with the ASAs inclusion of
its first female associate, Emma Warren Cushman of Boston, in 1895. The
societys examination system, which has grown into a full series of industryaccepted educational and qualification tools, was first implemented in 1896,
with the first Fellow of the Actuarial Society of America accepted in 1900.
Technological advances
The introduction of early computers in the 1950s was a blessing for actuaries,
and as assessors of risks and benefits, they were naturally quick to recognize
the potentialthe SOA hosted an International Congress of Actuaries in 1957
specifically to discuss electronic data processing. The SOA and CAS also
began working together to update their examinations to take computing
advances into account, which, of course, has continued to the present day.
As the tools improved, so did the challenges. In addition to insurance (life,
casualty, property, health and newer variations), actuaries were increasingly
used to predict the needs of pension plans. New and, some say, controversial
accounting systems adopted by the insurance industry in the 1970s left many
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actuaries with far more important roles in ensuring those companies had
proper reserves. And, of course, inflation and economic turmoil through the
1970s left the entire business world, let alone actuaries, gasping for air.
Sharply increasing life spans, starting in the 1970s and continuing through today,
have challenged actuaries in the insurance and pension businesses. Insurers and,
especially, pension funds managed to ride the dot-com wave of the 1990s,
building up their reserves through timely investment in the stock market.
Thanks to the hard work and foresight of their actuaries, most were diversified
enough to avoid the subsequent crash, though a few certainly struggled as Alan
Greenspans irrational exuberance warnings went unheeded.
In the new century, actuaries have seen numerous new opportunities. As stocks
crashed, hedge funds became less about hedging and more about seeking profits
wherever possibleand actuaries have been increasingly used to analyze the
risk-reward potential of a massive number of new investment ploys. Enrons
collapse certainly signaled the importance of actuaries throughout the financial
sector as more complex transactions take place. (Of course, in that case, the
actuaries were mostly kept in the darktheres only so much anyone can do if
they dont know whats going on!) The corporate accounting scandals have also
prompted many reforms, most notably the Sarbanes-Oxley corporate
governance law, and actuaries have been at the forefront of determining the risk
mitigation and management requirements for thousands of companies.
Actuaries Today
Today, actuarial careers have grown well beyond the insurance industry, though
insurers remain a major employer of actuaries and also help further the thinking
behind actuarial science. Pension funds, another traditional standby for actuarial
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careers, are evolving and giving actuaries new challenges and opportunities.
Actuaries are also finding new directions elsewhere in the finance sector, some
at traditional Wall Street firms as well as hedge funds. Other corporations, ones
not necessarily involved in finance, often employ actuaries, either on a
consulting basis or full time, to help make important business decisions. And
governments at the federal, state and even local levels are finding actuaries an
important piece of their budget and planning processes.
Outside finance, however, theres a variety of risks and rewards that can be
measured by actuaries. These can be as simple as running numbers on vendor
bids and their potential services, or as complex as determining whether a
product line will be profitable.
Heres a look at the most popular career choices for actuaries today:
The insurance industry wouldnt be a reality without actuarial science and its
practitioners. The calculation of risk versus benefit is core to ensuring a
profitable insurance business. The near-constant change in regulations and
requirements for the industry means theres plenty of work for actuaries. In
addition, many insurers are entering other financial fields to boost profits, so
actuaries are often deployed to ensure these annuities, savings programs and
other instruments fulfill the companys fiduciary duties to the customer and
still turn a profitall while adhering to insurance company regulations and
the actuarial code of professional conduct.
The challenges for actuaries in insurance continue to evolve. The introduction
of a new automobile model can result in many weeks of actuarial work as the
safety and performance features of the cars are studiedeven the automakers
targeted sales demographics make a difference. In health and life insurance,
medical breakthroughs alter not only the equation of life expectancies, but also
the companies cost structures. The reason health insurers sometimes cannot pay
for experimental treatments is because the insurers actuaries feel it wouldnt be
able to cover the costs of everyone wanting the treatment.
Actuaries working in insurance tend to specialize quickly, and often know as
much about what theyre insuring as they do about actuarial science itself. An
actuary working for a health insurer develops a good working knowledge of
medicine and pharmaceuticals, while an actuary working on policies for
cargo ships develops a keen awareness of how the shipping industry works.
The more the actuary learns, the better he or she is at the job. However, that
also makes transitioning to different actuarial fields more difficult as the
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actuary becomes known for his or her insights. Its a good thing I like health
insurance, one actuary quipped. Otherwise, if I tried to find another job,
Id have a hard time branching out.
MetLife remains one of the largest and best-known life insurers in the world,
while St. Pauls Travelers Group, a stitched-together conglomerate of various
insurers, remains a force in casualty insurance, like Allstate Corp. and State
Farm. HMOs such as HealthSouth and UnitedHealth Group are some of the
largest employers of actuaries in the health insurance industry.
Pension funds
With the rise of 401(k) plans over the past 25 years, Americas pension plans
are quickly going the way of the dinosaurs. Employers favor 401(k) plans
because, in essence, its up to the individual employee to maintain the plan
and build toward his or her retirement, and the employer does not have to
guarantee a set payment once the employee retires. In essence, 401(k) plans
take the money that would have gone into a pension and gives it to the
employee to invest and manage.
For actuaries specialized in pension plans, that can sound like a death knell
for their careers. However, there is still plenty of opportunity for pension
plan actuaries. For one, most government workers still receive pensions, and
that likely will remain the case for at least another generation. Federal, state
and local workers all have pensions that need to be managed by actuaries so
that the funds performance can ensure regular payments through the
employees retirement years. And even as corporations wind down their
pension plans, actuaries are needed to ensure that the fund can still pay its
retirees the promised benefits before it is closed.
A pension fund, of course, needs to ensure that it will have enough money on
hand to pay all of the benefits it owes. Thus, pension funds measure the riskreward of every investment they make. No fund would pile into a single upand-coming stock, no matter how good it lookedtheres always a chance
the fund could lose everything. Thus, a fund will be more conservative,
investing in bonds and other fixed-income instruments with less risk and
stable returns. The actuary weighs that risk and return every day.
The federal government and most state governments offer pensions for their
workers. The California and New York public-sector pension funds are two
of the biggest and most active in the country. As major shareholders in a
variety of public companies, they often use their stake as a bully pulpit to
push for better corporate governanceand ideally, boost share prices.
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Working for a pension fund doesnt have the specialization trap that
working for an insurer can bring. Indeed, many pension actuaries make
successful transitions into the broader financial services industry.
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Expansion always brings financial risks, and actuaries can help any kind of
company mitigate those. Whether its a new branch outlet, a new product line
or even simply increased or decreased production, actuarial projections can
give a company critical insights into its potential moves.
Few companies outside the financial sectors employ full-time actuaries not
connected with their human resources or benefits departments. In these
cases, consulting actuaries are called in to render advice. At smaller
companies, the HR actuary might even do double duty, assessing the risk of
a potential move while administering insurance policies, for example.
Government entitlement plans are a lot like pension plans in the way actuaries
manage risk, though working for the government certainly poses a unique
challenge. For example, actuaries have been at the forefront of warning calls
regarding the solvency of Social Security. The math here, of course, is
depressingly simple: baby boomers are getting older and are living longer. Baby
boomers also outnumber the next generationthe ones paying into the Social
Security program. More benefits plus fewer incoming dollars equals a
serious problem. The actuaries managing Social Security have their jobs cut out
for them.
Actuaries are also used throughout government programs. Medicare and
Medicaid have similar structures, as do a variety of housing and grant programs.
Actuaries are even used by the Department of Defense to help project risks in
deployment and the costs associated with those risks. And the Treasury
Department has a staff of actuaries to project tax income for the budgeting
offices of the various federal agencies. Local and state governments use
actuaries in a similar manner.
Outside of government, actuaries have had successful careers in a variety of
nonprofit environments. College endowments, for example, are run by
money managers, but its the actuaries who tell the money managers how
much they need to make and how much risk they can take on in order to do
so. And nonprofits have insurance programs and activity risks much like any
corporation would. Consulting actuaries can find work here as well.
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Membership
Actuaries are generally members of one or the other, though a few actuaries
that transition to or from casualty or property insurance work find themselves
members of both at some point in their careers. Their testing regimes are
similar, and they use the same tests in a handful of instances when measuring
basic actuarial science knowledge amongst their members.
Most actuaries aspire to become fellows of one of the two societies. The title
is recognition of their hard work and continuing education in the field, and
fellows are seen as leaders in the industry. The vast majority of working
actuaries are at least associates of either the SOA or the CAS, which means
theyve completed a basic testing program and are considered fully capable
of handling most actuarial work.
Membership at any level requires testing and, of course, membership fees. But
the benefits of membership include access to extensive research and studies
within the field and many opportunities to network with peers. Both societies
run conferences, job boards and outreach programs that are immensely useful to
actuaries just starting out, and both societies have incredibly detailed and useful
web sites for those interested in learning more about the field.
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I think the societies are pretty good at making sure were well trained and
able to handle anything, says one associate. That said, you get out of them
what you put in. At times, you have to put in quite a bit more. When it comes
to networking and research, that sort of thing, you have to sift through a lot
to get what youre after.
Well discuss the societies, and especially the testing programs, later on in
this guide.
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Industry Trends
CHAPTER 2
Actuarial science is ever-evolving, as is the role of the actuary in modern
business. Actuaries are constantly being called upon to apply their skills to a
wide variety of tasks, both within their core fields of insurance and pension
management, and in other areas of business. Heres a look at the recent trends
for actuaries in different businesses:
Insurance
The insurance industry is undergoing an incredible sea change, as companies
find themselves part of larger financial conglomerates. Insurers have been put
in the uncomfortable positions of having to answer to noninsurance
professionals. Top-level executive posts, once the domain of actuaries
responsible for maintaining solid coverage plans, are now going to
professional executives focused on solidifying shareholder value, costcontainment and bottom-line results. Some actuaries report dictums from on
high that pressure them into altering their models for better results. A few fear
that its only a matter of time before insurers find themselves in a financial jam
from an unforeseen occurrence that was not properly modeled.
Improvements
Yet the technology and actuarial science behind it continues to improve.
Better computing power lets actuaries model more variables in any give risk
profile, allowing for more accurate projections. Actuarial science is still
based on assumptions, but now those assumptions can be thoroughly vetted
and explored to a point unheard of just a few years ago. For now, the
improvements in thinking and technology have allowed actuaries to meet the
demands of their corporate leaders without sacrificing fiduciary values.
Again, however, the pressure on insurance companies to perform for
shareholders remains a top concern.
That pressure may lead insurers to be taken private in the coming years.
Private equity emerged as a major acquisition force in the markets in 2006,
and the lure of going private is enticing for many public companies tired of
quarter-to-quarter performance measures without being able to take a chance
on growth. GEICO and General Re, for example, benefit from being part of
Berkshire Hathaway Inc.while publicly traded, Warren Buffetts
investment vehicle insulates these major insurers from the demands of
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Challenges
Insurers may also continue to explore merging with other major financial
companies, though Citigroups failed experiment with the Travelers Group
may prove a deterrent. Citicorp and Travelers merged in 1998, but it became
apparent within a few years that the insurance exposure meant a risk to the
overall companys profits. Investors in insurance companies, after all, know
that a disaster like Hurricane Katrina could severely harm profits. Citigroup
decided to divest its insurance underwriting businesses. It first sold Travelers
Property and Casualty to the St. Paul Group in 2004, which formed the St.
Paul Travelers Companies. The following year, Citigroup sold its life
insurance underwriting arm to MetLife. Citigroup still sells insurance under
the Travelers umbrella, but no longer underwrites the policies. Indeed,
most major financial corporations will sell insuranceas long as someone
else is underwriting it.
Insurance wasnt something we were prepared to do, one Citigroup
executive said after the divestitures. A money center bank like us, were a
profit machine. Good times and bad, we can make money on it. Insurance
isnt like that. Theres only so much risk you can mitigate, and a major
disaster isnt something that you can easily deal with.
The insurance sector remains the top employer of actuaries, and we will
discuss insurance in more detail later on in this book.
Pension Funds
Private pension plans
More and more, pensions are seen as a burden on corporations and their
shareholders, and more companies are struggling under the weight of
generous plans from a generation ago. The airline industry, in particular,
shows how a pension plan can weigh heavily on companies already
struggling in other areas. The Pension Benefit Guaranty Corporation, a
federally created agency that takes over struggling plans, helps protect
pensions from corporate cutbacks and bankruptcies that threaten the benefits
of more than 44 million people. Sadly, some pensioners never receive the full
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benefits promised them, but the PBGC does salvage many plans that
Americans rely on for their retirement.
Most plans, however, are ended by employers without having to resort to
PBGC protections, though the PBGC does have oversight when a company
ends a pension plan. Corporations simply say that employees hired after a
certain date will no longer enjoy pension benefits. In the vast majority of
cases, the money instead goes into a 401(k) account. That frees the company
from the cost of not only maintaining a pension plan, but also any risks
associated with higher-than-expected payouts for employees. Once a
company decides to end a plan, it is required, in most cases, to provide
benefits to workers who have already paid into the plan. Sometimes,
pensioners will receive full benefits, and actuaries will be involved in making
sure the plan is well invested to provide those benefits for a generation to
come. Other times, the plan ends, no new money is received and pension
benefits are frozen at a given amount for each worker, based on seniority and
payments into the plan. Again, those plans will continue to exist, under the
oversight of actuaries, until all benefits are paid.
Wrapping up a pension plan is a massive challenge for actuaries. Many have
been put into the position of defining what their fellow employees will
receive, or even if the plan must be handed over to the PBGC under duress
due to the burden of payment on the company. Private pension plans are on
their way out, and actuaries must shepherd them out of existence over the
next 50 years while protecting as much of the benefits as possible.
Government pensions
Government pension plans, on the other hand, remain a key attraction for
employees, and few of these have been phased out. Some feel its only a
matter of time before local, state and even the federal governments move to
replace defined-benefit plans with defined-contribution plans like 401(k)s.
However, until that time, government pension plans remain the biggest
employer of actuaries in this field.
Currently, government pension plans are becoming far more active as
shareholders in corporations, and their operations are becoming far more
complex. CalPERS, the California Employees Retirement System, provides
retirement and health benefits to 1.5 million families, and generated an
estimated $30 billion in revenue in 2004 and 2005. It has used its financial
muscle to stand up for workers rights in a number of corporate shareholder
battles, and is also invested in a wider variety of vehicles beyond stocks and
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bonds. CalPERS and other pension plans have increasingly looked to hedge
funds for returns, and recently CalPERS announced it was looking to invest
in China. This can provide an immense challenge for actuaries seeking to
define the risks associated with these investmentsall while ensuring
benefits for an aging population.
Financial Services
At first glance, Wall Street appears to be far less risk-adverse than it was just
a few years ago. The rise of hedge funds can be accountable to some extent.
They were initially designed as hedges against drops in the markethence
the name. The funds were created to provide total positive returns in all kinds
of market environments, from raging bull markets to outright depression. Yet
in recent years, hedge funds have taken the promise of absolute returns to a
new level. They now invest in nearly anythingcommodities, currency,
credit instruments, real estate, distressed companies and, of course, stocks
and bondsin order to generate monster returns for their clients.
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Government
Increasingly, theres been a call by politicians and others to start running the
government as a business. While one could argue that fiscal conservatism has
fallen by the wayside, theres still a movement within government, at every
level, to contain costs, analyze risk and find ways to mitigate potential risks.
As weve discussed, entitlement plans are the immediate beneficiaries of the
application of actuarial science. But other areas of government are
increasingly using actuaries as well.
Hurricane Katrina
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Corporate America
Actuarial consulting firms receive increasing calls for their expertise in a
wide range of areas. Weve already discussed a few business planning
examples, but risk mitigation for existing businesses is becoming
increasingly important throughout the corporate world.
Corporations are sitting on the largest cash reserves in history, while their
appetite for risk remains at its lowest levels in history. Thus, they arent
necessarily investing heavily in new businesses. Instead, they are offering
cash dividends to shareholders and repurchasing their own shares in order to
increase share prices.
Yet actuaries are already working with some companies to better invest that
free cash to maximize value and minimize the tax risks associated with
keeping so much cash on hand. In many ways, these cash reserves are
becoming mini-hedge funds. Microsoft even has an investment team,
including an actuary, to manage the cash it has accumulated through the
years.
Companies also hire independent or consulting actuaries to help manage a
variety of activities. Certainly, consulting actuaries can help a company
manage its insurance policies. They can identify risk areas and develop
mitigation plans in current activities. They can even help in product launches
by identifying potential markets, looking at the risk new production would
have on current product lines, and even in pricing new products to best take
advantage of current consumer trends.
Career Trends
As you may have surmised by now, actuarial work is a growing, evolving and
exciting field. Its a core part of the insurance and pension industries, and is
becoming indispensable in government and throughout corporate America.
And as befits an increasingly critical skill set the pay is quite good.
Benefits
Actuaries are constantly rated as having some of the best jobs in America
with regard to not only salary, but also the hours, the lifestyle and relevance
to the world at large. Starting actuaries can expect salaries up to $60,000 per
year right out of college, while established actuaries can pull in up to
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Demand
Demand for actuaries remains high, not only for their increased visibility in
the business world, but also because of their high level of education and
training. Becoming an actuary requires a very good knowledge of advanced
mathematics, as well as the creativity to apply mathematics in unique ways
depending on the situation. That combination makes good actuaries hard to
findwhich only bodes well for the job seeker with the appropriate skills,
creativity and certifications.
The one drawback in this career is that, for highly motivated people, actuaries
tend to level off at a certain point. Most actuaries live very comfortable lives,
but even at insurance companies and the like, there are only so many top
spots. The expansion of actuarial work into highly lucrative industries, such
as hedge funds and investment banks, has alleviated this situation somewhat.
And consulting actuaries can do quite well working for themselves, charging
a premium for their servicesthough the hours are certainly longer.
Still, there are few complaints from actuaries. There arent many 9-to-5 desk
jobs that pay as well as actuarial work, and the intellectual challenge is
immense. And there are few areas in advanced mathematics where you can
make an immediate difference in peoples livesthis is one of them.
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ACTUA
CAREE
GUIDE
GETTING HIRED
Chapter 3: Where to Start
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Where to Start
CHAPTER 3
The actuarial field can be very compelling and attractive. There's intellectual
stimulation, the security of knowing you're in demand, and the pay is very
good. Yet few people can meet the exacting specifications of this kind of
work. That's not to say that you can't, or shouldn't, try. But you will need an
exceptionally keen and flexible mind and very good training to make it as an
actuary.
Personality
It would be easyand wrongto write off actuaries as cubicle-bound
mathematicians sporting pocket protectors, walled off on the lower levels of
the corporate headquarters. It would also be misleading to picture them as
financial oracles, charting the course of corporate America through their aweinspiring risk assessments that somehow border on wizardry.
The answer is somewhere in between. Actuaries do need to have a keen
analytical mind. Most have a penchant for problem solving and logic that
leads them to advanced mathematics. Not only must they be able to use
advanced calculus and probability theories to produce resultsthey really
have to enjoy it.
Yet there's the other side of the brain to consider. Mathematics, problem
solving and analytical skills need to be applied creatively. It's impossible to
think of every contingency, even when computing a basic life table for an
insurance company. But the actuary must be able to come up with
possibilities that can't easily be quantified.
For instance, the pharmaceutical industry has long worked on a "fat pill" that
would reduce obesity without resorting to diet and exercise. An actuary
working for a life insurance or health insurance company would follow
developments in this area closely, and be prepared for the day when such a
pill was ready for public consumption. After all, obesity is a leading cause of
all kinds of cardiovascular problems. The actuary would have to use creative
thinking, combined with extensive research, to forecast the impact this pill
would have on life expectancy, death rates due to heart disease and,
ultimately, the premiums customers would pay for their life insurance.
Actuaries must also be good communicators. What's the use of creating a risk
analysis for a major corporate venture if you can't easily explain it? The
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analysis and creativity involved must be finalized into a product that the
company, its customers and even the general public must be able to
understand. Good writing skills are important, as are the social skills needed
to navigate relationships between yourself and your superiors, your
customers and even the top executives in corporate America.
Personality types
Actuaries are generally driven people. That can be said for many in the
financial sector, but don't confuse drive with overt ambition. While many are
ambitious, an actuary's primary drive is to solve the problem, whether it's a
mathematical equation or a larger analysis of corporate risk with regard to the
upcoming hurricane season. Their drive focuses on the task at hand, and
many derive a great deal of personal and professional satisfaction simply in a
job well done. Given that most of these tasks would cause the average person
to walk away with a migraine, actuaries have reason to be proud.
Undergraduate Education
The backbone of your future career in the actuarial field is your education.
There are certainly many fields an English or political science major can shift
to after college, thanks to the broad liberal arts education they receive.
Actuarial work is not one of those fields. You will need a thorough
understanding of advanced mathematics just to get through the first of many
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actuarial exams ahead of you, and advancement in your career will depend on
your continuing education not only in mathematics and actuarial science, but
also economics, finance and even hard sciences such as biology.
Successful actuaries are some of the most well-educated, trained and tested
people in white-collar America. And it all starts with your undergraduate
degree.
Undergraduate work
If you haven't yet attended college and obtained your bachelor's degree, you
can participate in the growing number actuarial science programs at the
undergraduate level in the U.S. and Canada. These majors (or, in some cases,
concentrations within an economics or business major) will give you a firm
foundation not only in the necessary mathematics, but in distinct actuarial
principles and their application in the business world.
The best programs cover all the information contained on the first two
Society of Actuaries/Casualty Actuarial Society examsin a handful of
cases, you may even earn college credit for passing the tests, or may need to
pass the two exams to graduate. They also cover up to 12 semester hours of
material that can be found on the third and fourth society exams. These
programs can truly give you a leg up as you begin your actuarial career. A
bachelor's degree in actuarial science and success in the first two exams will
put you in the top tier of candidates for any entry-level job in the actuarial
field. (Bear in mind it's probably unwise to try to tackle the second pair of
exams before graduating from college and getting some real-world
experience, unless your collegiate adviser thinks you're ready for the
challenge.)
Where to go
U.S.News & World Report's 2007 rankings of America's Best Colleges notes
that undergraduate actuarial programs and/or business programs catering to
would-be actuaries generally tend to go hand-in-hand with the best business
schools. The top two in the survey are the University of Pennsylvania's
Wharton School of Business and the University of Michigan.
The following is a list of universities with majors or concentrations in
actuarial science that the Society of Actuaries believes gives students an
advanced undergraduate education in the field.
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United States
Abilene Christian University
Ball State University
Boston University
Bowling Green State University
Bradley University
Brigham Young University
Bryant University
Butler University
Central Connecticut State University
Central Missouri State University
Central Washington University
Columbia University
DePaul University
Drake University
East Tennessee State University
Florida State University
George Mason University
Georgia State University
Illinois State University
Indiana UniversitySouth Bend
Lebanon Valley College
Maryville University of St. Louis
Middle Tennessee State University
New Jersey Institute
New York University Stern School of Business
Northern Arizona University
Northwestern College (Iowa)
Ohio State University, The
Ohio University
Oregon State University
Otterbein College
Penn State University
Purdue University
Queens College of City University of New York
Rider University
Robert Morris University
Roosevelt University
Southern Illinois UniversityEdwardsville
St. John's University (College of Insurance)
SUNY University at Albany
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Temple University
Towson University
University of Akron
University of California at Santa Barbara
University of Central Florida, The
University of Connecticut
University of Evansville
University of Illinois at Urbana-Champaign
University of Iowa, The
University of Louisville
University of Michigan
University of Minnesota, The
University of NebraskaLincoln, The
University of North Carolina at Chapel Hill, The
University of North Carolina at Charlotte, The
University of Northern Iowa, The
University of South Carolina, The
University of St. Thomas
University of Texas at Austin, The
University of Pennsylvania, The Wharton School
University of WisconsinEau Claire
University of WisconsinMadison
University of WisconsinMilwaukee
University of WisconsinWhitewater
Utah State University
Washburn University
Worcester Polytechnic Institute
Canada
Concordia University, Montreal
Laval University, School of Actuarial Science
Simon Fraser University
Universit de Montral
Universit du Qubec Montral
University of Alberta
University of Calgary, The
University of Manitoba
University of Regina
University of Toronto
University of Waterloo
University of Western Ontario
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York University
Mexico
Instituto Tecnolgico Autnomo de Mxico
Universidad Anhuac
Europe
City University, London
University of Lausanne, Switzerland
Asia
Peking University, Beijing, PRC
Africa
United States
Arizona State University
Auburn University
Baruch College
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Where to Start
Baylor University
Bellarmine University
Beloit College
Benedictine University
Bentley College
Binghamton University
Brooklyn College
California Polytechnic State University
Canisius College
Case Western Reserve University
Central Michigan University
Clemson University
The College of New Jersey
Colorado State University
Concordia University (Seward, Nebraska)
Doane College
Elizabethtown College
Grand Valley State University
Harvey Mudd College
Howard University
Indiana State University
Indiana University Northwest
IUPUI (Indiana UniversityPurdue University Indianapolis)
Iowa State University
Kansas State University
Le Moyne College
Long Island UniversityC.W. Post Campus
Louisiana State UniversityShreveport
Luther College
Marist College
Memorial University of Newfoundland
Miami University
Michigan Technological University
Niagara University
Northwestern College (Iowa)
Pittsburg State University
Portland State University
Randolph-Macon College
Richard Stockton College of New Jersey, The
Rochester Institute of Technology
Siena College
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Where to Start
Canada
University of Windsor
Whether you decide to concentrate or major in actuarial science, or focus on
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Graduate Education
There are three routes to think about if you're considering graduate school for
actuarial science. The first, put simply, is not to go. Some companies in this
field feel there's no better classroom than real-world actuarial work. Major
insurers and other employers have a variety of entry-level programs that can
assist you in gaining your footing and taking on increasingly difficult work.
Most employers will also sponsor your advanced coursework and exams
some will even require success before giving you greater positions of
responsibility, or even keeping you employed!
The second and third routes lead to graduate school. On the one hand, you
may wish to continue your studies in actuarial science in order to obtain a
master's or even PhD in actuarial science. The master's degree is welcomed
by many employers, while the PhD has more application in heavy-duty
academic researchthere's more call for doctorate-holders in academia than
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Some employers will aid you if you want to go to grad school, or you may
opt to head directly for grad school after your undergrad work is complete.
For those seeking higher levels of actuarial work, a few years in the working
world will help shape your abilities and steer you toward specialties you
might not otherwise consider. For those who see actuarial knowledge as a
counterbalance for a more general career as a corporate executive, the
working world may be put off for a year or two while you get your master's
degreebut it would be best if you kept up with your actuarial exams.
Employers will expect to see you further your actuarial knowledge and
abilities through the SOA/CAS testing regime regardless.
Graduate programs
There are, of course, hundreds of MBA programs around the country, some
of which include actuarial concentrations. If you wish to go the MBA route,
there are plenty of resources that can assist you in choosing the right program.
However, if you wish to forgo the MBA and work toward a master's of
science (or even PhD) in actuarial science, the Society of Actuaries has
deemed the following programs as some of the most challenging in the
country. These schools offer research-intensive Master of Science and PhD
programs in actuarial science, business, risk management, statistics, finance
and insurance. According to the SOA, these degree programs cover all of the
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topics on the first four SOA/CAS exams, and also include at least six
semester hours of advanced work. These programs also focus on unique
research, usually in applying actuarial science in different ways to modern
business issues.
Of the top business schools in the United States, only oneThe Wharton
School at the University of Pennsylvaniaoffers actuarial science, according
to U.S.News & World Report's America's Best Grad Schools 2007 survey.
The business schools at Temple University and Georgia State University also
received positive mention in the survey.
United States
Boston University
Florida State University
Georgia State University
Illinois State University
Middle Tennessee State University
Penn State University
Temple University
University of Central Florida, The
University of Connecticut
University of Illinois at Urbana-Champaign
University of Iowa, The
University of Pennsylvania, The Wharton School
University of WisconsinMadison
Canada
Concordia University, Montreal
Laval University, School of Actuarial Science
Simon Fraser University
Universit de Montral
University of Calgary, The
University of Toronto
University of Waterloo
University of Western Ontario, The
Europe
City University, London
ISFA, University of Lyon
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United States
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Canada
Simon Fraser University
Mexico
Instituto Tecnolgico Autnomo de Mxico
Universidad Anhuac
Internships
Internships are becoming increasingly important to undergraduates as they
prepare for their Bachelor of Science degree. Most major insurers offer paid
summer actuarial internship programs, though the requirements are stringent.
Most students likely will only be able to manage one summer internship,
between junior and senior year, though ambitious sophomores with superior
skills may find themselves qualifying before their junior yearand have the
opportunity for two internship programs.
That will be rare, however, given the requirements most companies have. A
minimum grade point average of 3.2 to 3.4 is mandatory for most programs.
Advanced mathematical courses are a must. And many programs now require
students to have passed the first SOA/CAS examwhich places most
candidates squarely in the junior-senior timeframe. Don't feel bad if you're not
one of the handfuls of sophomores to qualify for these programsfew are.
That said, it's not overstating the matter to say that a summer internship is key
to the start of your actuarial career. Most major insurers offer such programs,
and although competition is intense, you should be able to land one
somewhere. If your school has a solid actuarial science or business
undergraduate program, your career counseling office should be able to assist
you. A visit to the SOA or CAS web pages may also prove fruitful.
Undergraduate internships
Most undergraduate internships at major companies are paid. You'll receive
a good-sized stipend and/or salary, and housing will either be provided
outright or you'll receive an additional stipend. After a day or two of
introductions, you'll be given a project and expected to produce results.
You'll have a mentor, of course, either an associate in your department or a
graduate student. You'll also have opportunities for classroom-like work and
discussions on advanced actuarial theories, and you'll meet with top actuaries
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within the company. In some cases, you'll have a lunch or discussion with Clevel executives. Many internships also offer social events, whether they're
part of the company's overall social schedule or specific to you and your
fellow interns. You'll be given the chance to mingle with your peers and
network with top-flight actuaries.
Needless to say, the many benefits far outweigh any drawbacks. For
undergraduates, again, this is a must. Not only will you walk away with
school credit and a paycheck, but also with contacts who may speak highly of
you when it comes time for the job huntor may even provide a job for you
once you graduate.
Graduate internships
For graduate students, internships can also be useful in gaining experience
and furthering your career. If you've gone straight into graduate school from
undergrad and have yet to work full time in the field, then a graduate-level
internship is just as critical as an undergraduate experience. For grad
students, these are either summer or full-semester internships with a great
deal more emphasis on performance in a job situation than classroom work
and social activities. You'll still need to maintain a high GPA, and in addition,
you'll need to have successfully passed the first two, if not three, SOA/CAS
exams. You'll also need to make a case as to why a particular graduate
internship program dovetails with your current research. In some cases, it
may be up to you, in cooperation with your adviser and your school's career
center, to contact firms directly to set up internship programsespecially if
you're looking for experience outside the traditional insurers. Investment
banks and hedge funds, for instance, could provide outstanding experiences
for a graduate student in actuarial science, though few have a structured
internship program specifically aimed at this career track. Some
communication and lobbying on your part could nonetheless win you a spot
at a fund or firm over the summer.
If you've worked for a company for a few years before deciding to get your
degree, a work-study program may not be ideal, especially if you're trying to
juggle your graduate studies with a part- or full-time job as is. For actuaries,
the real-world work environment is critical to learning, so if you already have
a few years under your belt, you'll be more attractive to potential employers
than someone straight out of academia with two summers of experience.
Some graduate schools may also give you credit for your work experience,
though that varies widely from school to school, and also depends heavily on
the type of work you were doing previously.
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Procter & Gamble Company | Proskauer Rose | Prudential Financial | Prudentia
Securities | Putnam Investments | Qwest Communications | R.R. Donnelley & Sons
Workplace culture
Compensation
Hours
Diversity
Hiring process
Exam 1/P
Exam 1/P, required by both the SOA and CAS, is a basic test of the candidate's
knowledge of probability mathematics and its use in quantitative analysis of risk.
Its a three-hour, multiple-choice test that nonetheless requires an undergraduatelevel knowledge of probability theories, calculus and, at the very least, a basic
idea of how it might be used in real-world business setting.
Each
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Of these policyholders, 3,000 are young, 4,600 are male and 7,000 are
married. The policyholders can also be classified as 1,320 young males,
3,010 married males and 1,400 young married persons. Finally, 600 of
the policyholders are young married males. How many of the companys
policyholders are young, female and single?
(A) 280
(B) 423
(C) 486
(D) 880
(E) 896
2) A blood test indicates the presence of a particular disease 95 percent of
the time when the disease is actually present. The same test indicates the
presence of the disease 0.5 percent of the time when the disease is not
present, and 1 percent of the population actually has the disease.
Calculate the probability that a person has the disease given that the test
indicates the presence of the disease.
(A) 0.324
(B) 0.657
(C) 0.945
(D) 0.950
(E) 0.995
3) An investment account earns an annual interest rate R that follows a
uniform distribution on the interval (0.04, 0.08). The value of a $10,000
initial investment in this account after one year is given by V=10,000eR.
Determine the cumulative distribution function, F(v), of V for values of v
that satisfy 0<F(v)<1.
v 10,000
(A) 10,000e / -10,408
425
(B) 25e /
v 10,000
(C)
- 0.04
v-10,408
10,833-10,408
(D) 25
v
(E) 25[1n(v/10,000)-0.04]
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Exam 2/FM
Exam 2/FM (the FM stands for financial mathematics) tests the exam takers
knowledge of the application of mathematics in finance. Both actuarial societies
require this exam, and most employers will want to see it successfully completed
before hiring you. Before taking this test, you should know the fundamental
concepts of financial mathematics and how those concepts are applied in
calculating present and accumulated values for various streams of cash flows as
a basis for future use in areas such as valuation, budgeting, reserves and other
basic corporate accounting functions.
The three main areas tested in this exam are:
Definitions of key terms in financial mathematics. These include inflation,
rates of interest (and variations thereof), term structure of interest rates,
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equivalent measures of interest, future value, current value, net present value,
and stocks, bonds and other investment instruments. You should not only be
able to define the term, but know how it applies to a given situation and
provide the proper equations for it.
Key procedures of financial mathematics. This includes determining
equivalent measures of interest, discounting, accumulating, determining yield
rates, estimating the rate of return on a fund and amortization. These
procedures will be applied to a variety of real-world examples, from
corporate accounting to mutual fund returns.
Definitions of key terms of modern financial analysis. While likely more
intuitive at this stage, youll be required to have a basic grasp of yield curves,
spot rates, forward rates, duration, convexity, immunization and short sales.
Youll be asked to manage basic computations dealing with these concepts.
In other words, while Exam 1/P tested your grasp of advanced mathematics and
probability, this is more of a test of your financial knowledge and your ability to
apply your mathematical skills to the business world. Undergraduate courses in
financial mathematics will be critical to your success on this test. Note that this
test does not require you to apply probability mechanics to real-world business
situations. That will come in a later course and exam.
The CAS calls this Exam 2, while the SOA uses the FM acronym.
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Portfolio
Rates (in %)
y+5
i1
1992
8.25
8.25
8.4
8.5
8.5
8.35
1993
8.5
8.7
8.75
8.9
8.6
1994
9.1
9.1
9.2
8.85
1995
9.1
9.2
9.3
9.4
9.1
1996
9.25
9.35
9.5
9.55
9.6
9.35
1997
9.5
9.5
9.6
9.7
9.7
1998
10
10
9.9
9.8
1999
10
9.8
9.7
2000
9.5
9.5
2001
9.0
i2
i3
i4
i5
(A) P>Q>R
(B) P>R>Q
(C) Q>P>R
(D) R >P>Q
(E) R>Q>P
3) A perpetuity-immediate pays $100 per year. Immediately after the
fifth payment, the perpetuity is exchanged for a 25-year annuityimmediate that will pay X at the end of the first year. Each subsequent
annual payment will be 8 percent greater than the preceding payment.
The annual effective rate of interest is 8 percent. Calculate X.
(A) $54
(B) $64
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(C) $74
(D) $84
(E) $94
4) David can receive one of the following two payment streams: (i) $100
at time 0, $200 at time n, and $300 at time 2n (ii) $600 at time 10.
At an annual effective interest rate of i, the present values of the two
streams are equal. Given vn = 0.76, determine i.
(A) 3.5 percent
(B) 4.0 percent
(C) 4.5 percent
(D) 5.0 percent
(E) 5.5 percent
5) Jose and Chris each sell a different stock short for the same price. For
each investor, the margin requirement is 50 percent and interest on the
margin debt is paid at an annual effective rate of 6 percent. Each
investor buys back his stock one year later at a price of $760. Joses stock
paid a dividend of $32 at the end of the year while Chris stock paid no
dividends. During the one-year period, Chris return on the short sale is
i, which is twice the return earned by Jose. Calculate i.
(A) 12 percent
(B) 16 percent
(C) 18 percent
(D) 20 percent
(E) 24 percent
Exam M
Exam M, administered solely by the SOA for SOA associateship, is a four-hour,
multiple-choice exam on basic actuarial models. The exam tests both your
knowledge of the theoretical basis of actuarial models as well as the application
of those models to insurance and other financial risk. This assumes you have the
knowledge of probability mathematics that allowed you to pass Exam 1/P.
Youll need thorough understanding of calculus, probability and interest theory.
Youll have to understand the basic meaning of the term model in an actuarial
context, as well as how and why models are used. Youll also need to know their
limits and how the results of using these models can help to make business
decisions.
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As you enter this test, youll be given a variety of tables to use in answering these
questions. Theyll include values for the standard normal distribution,
illustrative life tables and abridged inventories of discrete and continuous
probability distributions. These tables are commonly used in study materials
obtainable from the SOA, but dont bring your own tables with youtheyll be
taken at the door. If you have your own shortcuts or notes that you commonly
use with these tools, try to have them memorized, and then write them on the
tables provided before you start answering questions.
Exam M will be the first real test of your actuarial science skills. Youll be
expected to use survival and severity models, frequency models, compound
(aggregate) models and life contingencies. Youll also need to apply these
models to a variety of real-life insurance problems.
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(E) 90 percent
3) Insurance agent Hunt N. Quotum will receive no annual bonus if the
ratio of incurred losses to earned premiums for his book of business is 60
percent or more for the year. If the ratio is less than 60 percent,
Quotums bonus will be a percentage of his earned premium equal to 15
percent of the difference between his ratio and 60 percent. His annual
earned premium is $800,000. Incurred losses are distributed according
to the Pareto distribution, with = $500,000 and = 2. Calculate the
expected value of Quotums bonus.
(A) $13,000
(B) $17,000
(C) $24,000
(D) $29,000
(E) $35,000
4) A fund is established by collecting an amount P from each of 100
independent lives at age 70. The fund will pay the following benefits:
$10, payable at the end of the year of death, for those who die before age
72, or
P, payable at age 72, to those who survive.
You are given: Mortality follows the Illustrative Life Table. (i) i = 0.08
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Using the normal approximation for the aggregate number of eggs released,
determine the least number of whole hours the dam should be left open so
the probability that 10,000 eggs will be released is greater than 95 percent.
(A) 20
(B) 23
(C) 26
(D) 29
(E) 32
Exam 4/C
Exam 4/C, the CAS and SOA names for the exam, respectively, covers the
construction and evaluation of actuarial models. This is a four-hour, multiplechoice examination that tests your ability not to simply use established
actuarial models (as covered in Exam M), but your skill in selecting or even
creating your own models and applying them to real-world situations.
This exam will require you to analyze business data, find or create a suitable
model to solve a problem, and provide some measures of confidence for
decisions based on the modeled data. In other words, this test will have you
put your money where your model is.
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Number of Policies
32
26
12
Total
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(iii) The number of policies surrendered at the end of each policy year
was observed to be:
1 at the end of the first policy year
2 at the end of the second policy year
3 at the end of the third policy year
n at the end of the nth policy year
(iv) The Nelson-Aalen empirical estimate of the cumulative distribution
function at time n, F(n), is 0.542.
What is the value of n?
(A) 8
(B) 9
(C) 10
(D) 11
(E) 12
4) You observe the following five ground-up claims from a data set that
is truncated from below at 100: 125 150 165 175 250
You fit a ground-up exponential distribution using maximum likelihood
estimation.
Determine the mean of the fitted distribution.
(A) 73
(B) 100
(C) 125
(D) 156
(E) 173
5) A survival study gave (1.63, 2.55) as the 95 percent linear confidence
interval for the cumulative hazard function H(t0). Calculate the 95
percent log-transformed confidence interval for H(t0).
(A) (0.49, 0.94)
(B) (0.84, 3.34)
(C) (1.58, 2.60)
(D) (1.68, 2.50)
(E) (1.68, 2.60)
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Options. The options trade is where actuaries can make a real impact. Be
prepared to discuss puts and calls, swaps, forwards, interest rate caps and
no-arbitrage pricing models. Also be prepared to determine the value of
cash flow streams with embedded options.
The application of interest rate risk management and effective duration. Be
prepared to discuss immunization in this context, as well as compute an
effective duration measure using option-adjusted spread analysis.
Principles of asset liability management, and how they can be applied to
portfolio construction and management for institutional investors. Be
prepared for real-world applications.
As you can see, you need to really know the workings of our capital markets. If
you've not really touched on this material beforesay, because you've spent the
vast majority of your time in insurancemake sure you take the course from the
SOA and read all of the suggested materials. If there's training or hands-on
experience you can get from your company, take it.
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Of course, this isn't a necessary course for associateship or fellowship in the SOA,
but it proves that you've expanded your skill set beyond "traditional" actuarial
applications and into the financial markets. As traditional insurance companies
diversify both their offerings and their business mix, this exam becomes more
critical for the extension of your career into the upper echelons of the field.
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'
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ACTUA
CAREE
GUIDE
ON THE JOB
Chapter 6: Career Decisions
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Career Decisions
CHAPTER 6
Your career as an actuary can take many forms, as previously discussed. The
role of actuaries has grown well beyond insurance and pension industries.
Actuaries are a growing, dynamic force in the business world. Thats not to
say that the life of a working actuary is glamorous. Few actuaries are
managing Trump-style deals, leading companies or saving corporations from
financial ruin. Of course, few businesspeople in general do that anyway.
Being an actuary means, for the most part, a 9-to-5 office job. As your
expertise and responsibilities grow, that may change somewhat, just as any
job advancement would alter ones lifestyle. But in the end, youll go in, have
meetings, define goals, crunch numbers, write reports and implement your
work, then come home. Maybe youll do some catch-up at the end of the day
with e-mail or some work-related reading.
Office drone, you say? Hardly. Youre going to be dealing with very
important issues that not only affect the company you work for, but the
thousands, even millions, of customers of that company and its competitors.
Your hard work can save billions of dollars, affect peoples jobs, and help
others prepare for and mitigate the worst risks that can befall a company.
Not bad for a mathematician, right? said one pension actuary whos
currently working to make sure that a major corporations now-closed
pension fund can still pay off its surviving beneficiaries. Ive got 15,000 or
so people who will need this fund, maybe for the next 30 years. Without this
fund, they have nothing. Its nice to feel like youre helping people.
And dont pooh-pooh the 9-to-5 thing, either. Youll work hard, but youll
also have the opportunity to have a lifesomething quite rare in the business
world. Furthermore, your expertise, training and certifications all mean that
youll earn a very comfortable salary. Youll start in the $50,000 annual
salary range, and make 10 times that in a surprisingly short amount of time.
Starting Out
Congratulations! Youre out of school and have landed your first actuarial
job. Youre making $50,000, maybe a little more, and youve probably got
some money to help move too, maybe even a signing bonus. Not bad for
someone in their early 20s! Now its time to get to work.
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In the early part of your career, you can expect to work hard. Yes, we just
said actuarial work is a 9-to-5 job, and it is once youre established. But
right now, youve got to prove yourself to your new employer and study hard
for your next SOA or CAS exam. Ive been an actuary for six years, and Im
still studying, said one consulting actuary. It never ends. Your bosses will
want you to keep going, keep studying, keep taking the tests.
Testing
Thankfully, your employer will likely help you with the testing you need.
Large corporations, especially insurers, will often have their own study
courses. Indeed, the biggest insurers around, like MetLife and Aetna, will
often have college graduates spending 50 percent or more of their time in the
classroom, getting ready for the next exam.
Youll generally be expected to tackle a CAS/SOA exam every year to two
years, depending on your ratio of work to study time. Smaller companies will
have you doing real actuarial work and learning on the job, so youll not be
testing as much. Others, again mostly larger companies, will want you to
have six to seven exams under your belt before youll be free of the classroom
and ready for more responsibility.
Early to rise
Either way, you can expect your salary to climb as each year passes and, more
importantly, with each exam you pass. At most companies, passing another
exam not only means a boost in your base pay, but likely a bonus on top of
that, and more responsibility in your day-to-day job.
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major. The third and fourth require not only math, but a strong business sense
as well. By the time youre on your sixth or seventh, youve either been
around actuarial science for years or have an advanced degree in
mathematics, business and/or actuarial science.
And at some point, you simply just might not get it any longer. The first two
I passed easily, the third took me two tries, the fourth took three tries, one
insurance industry actuary says. The fifth three times so far. And at this
point, Im on my own for a fourth try. Indeed, companies will teach and
train and prep you only so longthree times seems to be standard. If for all
your hard work and study, you simply cant pass a given exam after three
times, then the company likely wont sponsor you for a fourth.
You can certainly try other exams, though after the fourth they tend to build
upon one another and increase in difficulty. You can also take the test on your
own. Going to graduate school for advanced actuarial science or mathematics
work is another option, with hopes of gaining enough experience and
knowledge for a better shot at a test.
Or it may just be that youve hit the wall. As the difficulty of the actuarial
exams increases, it becomes something akin to art rather than science, and youll
need to creatively apply the most cutting-edge theoretical mathematics to the
problems posed. That kind of work isnt for everyone, and it may not be for you.
That, of course, then begs the question, what happens to your career once you
hit the wall? A flip answer would be that you go into management. But like
many old business-world clichs, thats sometimes not far from the mark.
You may continue to gather experience at the level youve achieved, and
ultimately manage others doing what you do now. So if youve passed five
exams but not the sixth, and youre currently working on modeling potential
prescription usage patterns for a major health insurer, youll probably keep
doing that, and may ultimately manage your business unit.
To further that goal, you might decide to get your MBA or try other
management-track options. Perhaps youll find a position at a different firm
that has more management potential. Your own firm may encourage you to
take that tack in your career as well. Im glad I hit the wall on the tests.
They were awful. I hated them, says one pension industry actuary whos
now in a management position. Im managing the people who used to do
what I was doing while I was trying to pass the tests. Its more reviewing
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their work now, and its great. I may not do it forever, but the management
experience helps me with whatever I want to do next.
Sadly, some firms dont take hitting the wall as kindly. Few working
actuaries can name firms who have let people go, but in many larger
companies, hitting the wall in your testing regime is the effective end of your
career advancement. Of course, a cushy office job that pays $150,000 or so
is hardly a stalled career for many Americans. But actuaries are generally
more ambitious than that. Should this happen to you, a change of scenery will
likely do you and your career wonders.
Career Transitions
That change of scenery can take many forms. Many smaller companies
would love to get their hands on someone trained at a MetLife or
UnitedHealth. Their work isnt as esoteric as the top corporations can be.
Some actuaries who left the behemoth firms to work for smaller companies
say theyve found increased job satisfaction. Theyre more in control of their
work and careers, and they often rise through the ranks faster. They may not
be making as much as a New York City insurance actuary, but theres
something to be said for a fish finding a smaller pond to swim in.
Other options
Many consulting firms also hire straight from college, but theres a little more
flexibility there. The firm may bring in new clients that require a surge in
workers, or a client may have specific needs that arent yet covered
adequately by the firms in-house expertise.
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The government, federal or state, often does not have the training programs
necessary to bring actuaries along like corporate employers do. The pay,
while good, is generally less than that of the corporate world, but its a very
easy transition and the pressure to advance in SOA/CAS testing is less.
Theres also more opportunity to advance in the various financially-centered
departments of government as well.
Broader financial services companies are quickly coming to appreciate what
actuaries can do with risk mitigation. Whether an asset management firm is
developing a new investment product, a hedge fund or private equity firm is
pondering a major investment, or an investment bank is crunching the
numbers on alleged synergies between two would-be merger partners, the
actuary can have a front-and-center role. Few of these companies have fullblown hiring programs like the insurance and pension industries do, and thus
are great alternatives for actuaries seeking career transitions.
Likewise, the rest of corporate America will always have use for actuaries.
The roles certainly may vary from company to company. One company may
have you developing risk profiles and mitigation plans for store expansions
throughout the Northeast, while another may simply ask you to manage the
companys life and health insurance programs. Naturally, its the former
positions that offer the best opportunities for growth and challenging work.
Again, most of these companies dont hire actuaries out of college, so a move
here is far more likely for mid-career actuaries.
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actuaries can play a leadership role as comptrollers and even chief financial
officers.
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Lifestyle
CHAPTER 7
The most recent edition of the Jobs Rated Almanacwhich rates jobs by
salary, intellectual stimulation, opportunity for advancement, hours and jobrelated stresshad actuary in second place behind biologist. In fact, the
vast majority of job surveys also have actuarial careers at or near the top.
As actuaries well know, there are a lot of factors to consider when building a
career. Some actuaries are very business-oriented and can thrive under the
pressure cooker of Wall Street. Others may be more introverted and prefer to
simply let their work speak for itself. Either way, actuarial science provides
plenty of options and a great deal of choice in balancing lifestyles.
Actuarial careers are also generally quite secure. Demand for actuaries
remains strong and, despite the falloff in pension work, is only expected to
grow in the coming years. The job requires a deep knowledge of finance and
mathematics, and the certification process is strenuous. If you can manage
that, you wont have many problems finding and keeping a job.
Salary
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Insurance
Actuaries working for major insurers can expect to start in the $60,000 range.
In 10 years, with the completion of a full slate of actuarial exams and
Fellowship, that can top $300,000 or more. By the time you retire, that can
reach $500,000 or more a year, especially if you take a management or
executive track. Those few who can make it to the upper echelons of the
corporate world can pull in multimillion-dollar salaries, plus sizeable
bonuses.
Smaller insurers, of course, wont pay as much. Even so, $175,000 after a
decade of hard work and completion of all exams isnt unheard of. You may
have to move on to another firm to reach the top, but those who stay on can
expect to retire with a salary of $350,000 or more.
Government
Government actuaries and those employed by public pension funds tend to
make less and are governed by civil service law. Most federal government
actuaries can expect to start in the $50,000 to $60,000 range. Those with
some experience can quickly top $100,000 or more per year. In 10 to 15
years, its closer to $175,000 a year. The government isnt as obsessed with
SOA/CAS exam completion, eitheryou wont have to climb all the way up
to Fellowship to land a very comfortable job, and the work can be both broad
and challenging.
Consulting
Consulting firms vary widely in salaries. A small firm can experience feastor-famine times that tend to keep salaries small and bonuses always in flux
from small to amazing. Larger firms, such as Deloitte & Touche or Buck
Consultants, have steady salaries, regular bonuses and generally pay more. A
top consulting firm can have actuaries earning more than $100,000 in three or
four years, and rival the topmost insurance companies through your career.
Financial Services
Actuaries in the broader financial services industry tend to work the most
hours and have the most stress, but earn the best salaries. A Wall Street
investment bank or hedge fund will start most entry-level people at $80,000
or better, including base salary and annual bonuses. That can rise sharply
over time, depending on job performance and the companys fortunes. In 10
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Corporate America
Finally, actuaries working for corporate America can see the widest swing in
their potential earning power. Actuaries starting out in helping to manage a
companys insurance policies can earn just $40,000 a year. Those in growing
industries who are responsible for mitigating business risk across an entire
business can earn salaries rivaling those on Wall Street.
A Word on Diversity
The actuarial field isnt very diverse, but the SOA and CAS, along with most
major employers, have worked hard to change things. At the collegiate level, the
two actuarial societies offer undergraduate and graduate-level scholarships for
qualified minority studentscurrently limited to African-American, Native
American and Hispanic students. The amount of the scholarship depends on
merit and financial need, though students who have passed an actuarial exam can
qualify for an additional $500. More details on this program can be found online
at: www.beanactuary.org/minority/scholarship.cfm.
The societies also offer exam fee reimbursements for minority students
attempting the first actuarial test, Exam P/1. If the student passes the exam
in the first two tries, the societies will reimburse the $175 exam fee, for both
attempts if need be. If the student fails the first two times, theres no
reimbursement.
Mercer Human Resource Consulting also offers minority scholarships to
would-be actuaries, along with minority students majoring in mathematics,
economics, business, finance or liberal arts, amounting to up to $5,000 per
year per student. The recipient must accept a summer internship program
with Mercer and be involved with campus outreach on behalf of the company.
The recipient will also be expected, though not outright required, to take a
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position with Mercer after graduation. More details may be found at:
www.mercerhr.com/diversityscholarship.
The International Association of Black Actuaries also offers minority
scholarships to African-American students. Details can be found at:
www.blackactuaries.org/membership/ActuarialScholarshipsInfo/. The IABA
also conducts outreach to African-American schools and colleges, and works to
increase the visibility of African-American actuaries through conferences,
networking and policy papers.
In general, minority scholarship recipients can expect extensive contacts with
other minorities in the field and will have the opportunity to find and cultivate
potential mentors. As you progress further in your career, you may have the
opportunity to join the IABA and/or work with the SOA/CAS Joint
Committee on Diversity to bring additional focus to diversifying the field.
Pros
A great salary. Again, actuaries quickly rise to a level well beyond a
living wage. They can generally afford to live wherever they want
and fully support their families without any sort of real financial stress.
A good lifestyle. As previously mentioned, actuaries can essentially set
up the lifestyle theyd like, balancing reward and stress to their taste.
The hours are generally stable, and the benefits are good. Few ever face
layoffs or other unexpected career interruptions.
An intellectual challenge. If you already have a taste for mathematical
analysis, the job is rarely boring. Whether youre managing a pension
fund or building investment vehicles for a financial services firm, there
will always be challenges. And as you advance in skill, your employer
will eagerly put you to work on new things.
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Security. Actuaries are in demand. That means not only are most jobs
fairly secure, youll also be able to work with your employer on flextime, study time, vacations and other related matters.
Cons
Test pressure. Many employers really want to see their new hires become
full Fellows in about 10 years or so. Even with company-sponsored classes
and time off for studying, the first several years of your actuarial career can
seem like youre juggling advanced graduate work with a full-time job.
And you will be. While its not absolutely imperative for you to gain
Fellowship, your career will be effectively curtailed otherwise. Again,
being curtailed at a $200,000 base salary may not seem so bad to many
people. But it can be tough to see others advance. Theres just a ton of
pressure to get those tests done and out of the way, and nobody wants to hit
the wall and stall out, says one insurance actuary in her 20s. Ive already
seen some of the people I started with now stuck in a really boring job
because they couldnt get through the fourth exam. It creates a ton of
pressure. Once youre done and get Fellowship, it becomes a lot easier.
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Actuarial science and the insurance industry owe their existence to each
other, and the industry remains the top employer of actuaries in the business
world. Insurance provides some of the best training and best salaries for
actuaries. Its a demanding business, but can be rewarding in a variety of
ways.
The life and health insurance industries are the foremost employers of
actuaries. On the surface, the demands are very simplemake sure
policyholders are paying enough to cover the payouts necessary every day.
Naturally, its far more complicated than that. Changing demographics and a
steady stream of medical breakthroughs require insurance actuaries to
question their assumptions on an almost daily basis. They just recently
published a piece on hormone therapy, saying that women who stopped
taking it had a sharply decreased breast cancer risk, says a top-level actuary
at a major health insurance group. So we have to go in and change the
models in so many different ways. Our breast cancer models, our menopausal
models, our drug cost models, everything. That one finding had us adjusting
nearly everything we do.
As the baby boomer generation continues to age, there will be a continued
call for actuaries in the insurance industry to help develop strong policies and
insurance funds. This generation, in particular, is active like no other.
Theyre living longer, for example, but theyre also out playing sports,
exploring, traveling, etc., and their potential for other kinds of injuries,
diseases and mishaps is higher. Actuaries will remain busy in these fields for
decades.
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The property insurance industry is also hunkering down for change. The
onslaught of Hurricanes Katrina and Rita were a wake-up call for most
insurers, and the industry is now carefully modeling a much broader array of
potential disasters. Katrina was the big what-if scenario come to life, says
an actuary working on post-Katrina disaster models. It made us all look at
what we were doing. It wasnt enough.
Immense change, of course, brings opportunity. Insurance actuaries are being
challenged to think more broadly, to mitigate a wider variety of risk and to
help maximize company profits in a time of great uncertainty. Theres
perhaps more pressure in the insurance industry than there was just 20 years
ago but with it comes greater rewards. Not only are good actuaries in
higher demand, but the work will help save money, property and lives.
8:30 a.m.: I usually roll in the door right about now. We dont have to be there
until 9 a.m., but I need the time to check my e-mail, do a quick check of my work
from the night before and just get my head on straight before it all starts.
9 a.m.: My fellow classmates and I spend the morning in training classes.
Ive passed two of my SOA exams and Im aiming for the third. This is pretty
critical, too. Its the one that really dives deep into the insurance industry
models that everybody uses. Classes last all morning. We look at real-life
examples of models being used in the company right now, and some
interesting things that the actuaries here have come across in the work. A new
drug or surgical breakthrough can really have big implications for our
modeling. Its a lot about learning the science behind those breakthroughs,
for one, then estimating the section of our policy population thatll be
affected, and then figuring out how theyll be affected.
12:00 p.m.: Most of the time, were on our own for lunch. Every couple of
weeks, theyll bring in the head of this or that department, or even more
senior people, to talk about the firms direction and challenges. Most of the
time it doesnt really apply to what were doing, but its kind of nice to feel
that youre part of something bigger.
1:00 p.m.: We spend the next few hours doing exercises related to the test and
to the companys work. Sometimes its just sample questions, but other times
theyll bring in problems that the companys more senior folks are working
on, and well hash it out together and see what we come up with. Twice a
week, we work on longer-term assignments that will actually help the
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12:00 p.m.: Lunch. Ill head down with some colleagues to grab a bite.
Sometimes its a working lunch when were trying to nail down something on
deadline for a client.
1:00 p.m.: Ill be meeting with the team responsible for a given client or
clients to make sure things are going well. Well talk about any changes they
want to do within their plan. In some cases, its more about a timetable
theyve put in place to wrap up their plan and obligations to close it down.
Theres a lot more of that these days.
2:30 p.m.: Back on the phone again, but this time with a college student
looking to come to the firm to work for the summer. Im also in charge of our
recruitment program for our summer interns. We select 10 interns each year
to join us for the summer. Ideally, all 10 will come work for us after they
graduate. Most of the time its six or seven out of 10, but we aim for all 10.
We dont do a lot of outside hiring. We prefer to grow from within each year
with the interns.
4:00 p.m.: Im off back across the river to pick up my son. My bosses give
me really flexible hours, which is great. Im able to get him by 5:30 or so and
get home for dinner.
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9:00 p.m.: After dinner and family time or whatever, Im back working.
Thats the trade-off with my bosses for the shorter day in the office. I usually
put in a few hours, mostly reviewing the work my team has done that day.
11:00 p.m.: Around this time my brain stops working and Im off to bed.
Of course, banks and credit issuers have used actuarial models for years. The
credit scores used to measure individual creditworthiness were developed in
part through the hard work of actuaries. Everyone knows that a person in
debt will have a harder time managing more debt. But actuaries can look at
that debt and determine formulas for just how much debt a person can
manage, what kind of debt is appropriate and what interest rate is appropriate
for the bank to charge in order to mitigate the credit risk.
Actuaries are also being used by proprietary trading desks, mutual funds and
hedge funds to study potential trades for unforeseen risks and to help mitigate
the risks involved through hedging strategies. Whether the investment
involves stocks, bonds, currencies, commodities, even options and futures
strategies, theres always risk, and more and more, companies believe
actuaries can help minimize those risks. Investing is nearly always a gamble,
of course, but its wise for a gambler to know the odds and play the game to
the best of his or her ability. The actuaries in the financial services industries
do just that.
Actuaries are also called upon to help construct investment vehicles for sale
to institutional and public buyers. A major broker wont build a new hedging
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7:30 a.m.: I work for a major hedge fund, so Im in fairly early, since most
of the people I need to work with are busy trading and monitoring the market
between 9:30 and 4. I have a team of three other people, and together we run
risk profiles and mitigations for every investment imaginable, from equity
options to commodities and currencies. Talk about variablestheres any
number of ways you could play a given trade. We have to find the best one.
Usually the day starts slow, but once a week we have a breakfast strategy
meeting with the various trading heads to figure out possible moves. Thats
when I can chime in and help. Its still pretty new to the guys to have
actuaries on board, but were getting accepted pretty quickly. I ran a
comparison once based on our recommended move versus the move a 20year veteran trader ran. We wouldve improved the trade by 400 basis points.
They listen more now.
9:00 a.m.: By this time, whether Im in a meeting or just looking at the emails, I have a good sense of what the trades might be like today. Hedge
funds arent day traders by any stretch, though there are plenty of one-off
trades during the day that crop up for individual holdings. For those, Im not
needed. But now and then, someone will be thinking of a particularly
interesting move, and well try to quickly model that out.
9:30 a.m.: Trading begins and its off to the races. We dont do a lot of moves
right awaywe like to pick our spots. For me, it doesnt matter much what
the rest of the firms doing. My team and I are already modeling out a variety
of potential trades, and we add one or two more to the mix every day. We
figure out how much to put into one trade, what the best hedge is, and how
much to put into the hedge to mitigate the risk while maximizing the profit.
A really simple example would be reacting to a dip in oil prices. We believe
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oil isnt done, so if we see a dip, well buy crude futures. But well also short
ExxonMobil and get a short-term win, and a hedge that way, too. Of course,
well have already looked at a million other factors, from the winter weather
forecasts to OPEC production, before we recommend anything.
11:00 a.m.: One of the traders is ready to pull the trigger on a trade. We run
the latest models and get them over to the desk ASAP. She didnt go by the
letter of the modeling, but at least went with the spirit of the recommendation.
She bought a little less of the hedgea gut move, she told me. Well see
how it plays out over the next few weeks.
12:30 p.m.: Lunch is nearly always brought to everybody at the firmcant
afford the time away. Since they want someone from the team around at all
times, we eat at our desks, too.
2:00 p.m.: Ill often do a quick meeting with a trader on the floor when its
slow. This is a little late, but the markets behaving and he has the time. We
go over the model for a pretty complex currency swap hes contemplating.
The hedges dont quite work as well as he or I initially thought, and thus wed
be putting a bit more of our assets at risk than we initially thought. We come
up with a few more options, which I head back to research.
4:00 p.m.: Today was an uneventful day for equities, bonds, really pretty
much everything. That works for me. There are definitely days where the
market just goes in a random direction, and we have to redo a bunch of work
to take that into account.
4:30 p.m.: A quick meeting with most of the sections to go over the days
trades and their results, and to track investments in general. We talk about
when a good time might be to wind down an investment, pick up more, that
sort of thing. That gives me another set of numbers for the team to crunch.
6:00 p.m.: This is about when I usually leave, unless theres some really
pressing work ahead. When Amaranth lost all that money betting wrong on
the natural gas bubble last year, I spent a week of sleepless nights figuring out
our exposure, past and present, to determine our current risk. Turned out to
be not much, especially when it came to light that the trader was simply
betting wrong and not telling anyone. Thankfully, were better in our internal
controls than they were.
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Consulting Actuaries
Consulting firms are a fast-growing employer for actuaries. Whether solely
dedicated to actuarial work or broader financial consultants, these firms are
finding more roles for actuaries as corporate America outsources just about
everything except for core operations.
Thus, as noted previously, many companies have turned to consultants to help
run benefits programs and pensions. Thats the bread-and-butter work for
most consulting firms focused on actuarial work, and its similar to the
benefits and pension management work you can expect working in-house at
a pension fund, an insurance company or a nonfinancial corporation.
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Actuaries in Government
The government runs pension and benefit programs that dwarf the most
ambitious corporate setups imaginable and actuaries are at the heart of these
programs. Medicare, Medicaid, Social Security, Veterans Affairs, government
worker pension programs and benefitsmillions of Americans rely on
government actuaries so that their benefits and pensions will be there when they
need them. The federal government is one of the largest employers of actuaries,
and several large state governmentsNew York and California, in particular
have their own benefit programs and major retirement funds that require
actuarial work. It isnt glamorous work by any stretch, but its critical to the
functioning of government.
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9:00 a.m.: Im at my desk. Generally, I just check e-mail and then pick up
where I left off the day before on whatever Im doing. I work for the
Commerce Department. Right now, Im assigned to a team thats plotting
economic damage and recovery times for a variety of Gulf Coast hurricane
scenarios. That means if a hurricane strikes one city, whats the overall
effect? Does the town have refineries? If so, what could that mean for the
price of gas? How long would it take to pick up that lost capacity?
Ultimately, were going to have full risk profiles for most of the Gulf Coast
cities, and then update them regularly as they rebuild from Katrina and Rita.
10:30 a.m.: Conference call with state economic development officials in
Alabama. These are mostly information trades, where they tell us how things
are going, and we tell them a bit more about what we think will happen down
the road. We take their info and pop it right in the models.
12:00 p.m.: Weve taken to brown-bagging together in the boss office. Shes
good about not making the whole thing about work, but we definitely talk a
lot of shop.
1:00 p.m.: Back at it. We have a whole research department that we can call
on for the raw data that we need. And we can put in requests to other parts
of the government for more information. Sometimes thats as easy as picking
up the phone and getting an answer. But when were modeling recovery
times and need to get a sense of what the National Guard can do, the security
red tape takes months.
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3:30 p.m.: Status update with our section chief. We talk about how our
models are going, which ones are done, what findings need to be pushed
upstairs.
4:30 p.m.: A quick call to a contact I have over at British Petroleum to talk
about getting some more information about their refining activities in a given
place and how theyve hurricane-proofed since Katrina.
5:30 p.m.: That wraps it up for me and I head home. Ill occasionally bring
some work home to finish up if were nearing a reporting deadline.
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'
www.vault.com/finance
ACTUA
FIRM
PROFI
ACTUARIAL
FIRM
PROFILES
LOCATIONS
Offices in US, Canada & Mexico
THE STATS
Firm Type: Public Company
Chairman & CEO: Patrick S. (Pat) Baird
No. of Total Employees Firmwide:
14,015
EMPLOYMENT CONTACT
See career opportunities at
www.aegonins.com
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and analytical skills, initiative, attention to detail, and strong written and oral
communication skills; desire to work in a team environment; knowledge of MS
Excel or other spreadsheet applications; knowledge of at least one computer
programming language is beneficial and at least one SOA/CAS exam passed is
preferred.
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Aetna
151 Farmington Avenue
Hartford, CT 01656
Phone: (860) 273-0123
www.aetna.com
LOCATIONS
Hartford, CT (HQ)
Bluebell, PA
Middletown, CT
THE STATS
Firm Type: Public Company
Chairman: Ronald A. Williams
CEO: Ronald A. Williams
2005 Firm Revenue Worldwide:
$22.5 billion
2005 Firm Net Income Worldwide:
$1.6 billion
No. of Employees Firmwide: 30,299
EMPLOYMENT CONTACT
Caroline Wilke
Phone: (860) 273-0123
E-mail: [email protected]
www.Aetna.com/Working
Aetna recruits at Ivy League schools as well as public and private institutions. The
firm also recruits from actuarial science graduate programs, and finds candidates from
job postings on the company web site and actuarial recruiters.
What are the position titles for new hires coming out of undergrad? Out
of grad school?
Actuarial analyst.
Please describe the hiring process at your firm.
We utilize a combination of career fairs, information sessions and campus posting
boards to identify candidates. Both on-campus interviews and on-site interviews, using
competency-based interview questions, are conducted during the hiring process.
What are some of the requirements for jobs?
Candidates should demonstrate strong analytical, communication, technical and
leadership skills as well as an ability to successfully complete actuarial exams.
Previous internship or actuarial work experience are a plus. A 3.0 GPA or above is
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We are
Aetnas Actuarial Student Program educational benefits include companysponsored study time, paid review courses and study materials, paid exam
fees and professional society dues, on-site actuarial libraries and study rooms.
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populations, such as historically black colleges and universities and Hispanicserving institutions. In 2005, our executives participated as keynote speakers
at university events, worked directly with students as mentors, and conducted
mock employment interviews and resume reviews with them. We also work
closely with our employee networks, Aetna African-American Employee
Network, Aetna Hispanic Network and Asian-American Network, to
contribute to an inclusive environment.
Please describe any diversity hiring efforts in regards to gays and
lesbians.
We actively support Out & Equal Workplace Advocates and the National Gay
& Lesbian Chamber of Commerce. We also advertise in gay and lesbian
publications. We work closely with our employee network, Aetna Network
of Gay, Lesbian, Bisexual and Transgender Employees, to contribute to an
inclusive environment.
Additional Comments
Please
visit
our
web
site
for
www.aetna.com/working/students/atp.html.
additional
information:
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THE STATS
LOCATIONS
Operations in Approximately
130 countries
EMPLOYMENT CONTACT
Matt Lenaghan
Phone: (713) 831-1388
E-mail: [email protected]
Career web site:
www.aigag.com/life/life.nsf/contents
/aboutus_careers
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Broadway shows as well as sporting and special events are available. Discount
packages for golf, skiing and accommodations are available at Stowe Mountain,
and the Orange County National Golf Center gives AIG employees discount
packages including accommodations, meals and daily golf. The NYC Museum
Discounts gives reduced rate or complimentary admission to a variety of New
York City museums for AIG employees, and the movie ticket discounts allows
discounted admission to selected movies and theaters. AIG vendors and
suppliers give retail discounts and access to special promotions.
Diversity
Please describe any diversity hiring efforts in regards to women,
minorities, and gays and lesbians.
One of AIGs objectives is to recruit, hire, train and promote to all job levels
the most qualified applicants without regard to race, color, religion, sex,
national origin, age, disability, military service, marital status or sexual
orientation. Compensation, benefits, transfers, company-sponsored training,
tuition assistance, social and recreation programs are administered without
regard to race, religion, color, sex, national origin, age, disability, military
service, marital status or sexual orientation.
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Allstate
2775 W. Sanders Rd., Suite F4
Northbrook, IL 60062
Phone: (847) 402-5600
Fax: (847) 326-7519
www.allstate.com
LOCATIONS
Operations in 49 US & Canada
THE STATS
Firm Type: Public Company
Chairman: Edward M. Liddy
CEO: Thomas J. Wilson II
2006 Firm Revenue Worldwide:
$35.8 billion
2006 Firm Net Income Worldwide:
$4.99 billion
No. of Employees Firmwide: 38,300
EMPLOYMENT CONTACT
See careers at www.allstate.com
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Other notable perks at Allstate include flexible work arrangements, child care
discounts tuition reimbursement and on-site banking service, on-site oil
changes, a vanpool program and a convenience center.
Diversity
Please describe any diversity hiring efforts in regards to women.
Women make up 42 percent of officials and managers at Allstate. Allstate has
been recognized numerous times by different organizations for its regard for
women employees. The firm was voted a 16-year award winner and Hall of
Fame inductee (1990, 1992 to 2006) as one of the 100 Best Companies for
Working Mothers by Working Mother magazine, one of the Best Companies
for Women of Color, also by Working Mother magazine (2004 to 2006),
among the Great Places for Black Women to Work by ESSENCE magazine
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(2003 to 2005) and a Top Company for Executive Women by the National
Association of Female Executives (2000 to 2001, 2005 and 2006).
Please describe any diversity hiring efforts in regards to minorities.
Allstate also has a commitment to hiring efforts for minorities, with
minorities constituting 20 percent of officials and managers. Allstate
Chairman and Chief Executive Officer Ed Liddy says Our competitive
advantage is our people and our people are diverse Diversity is a strength
and a strategy through which the company will continue to realize its growth
goals. Nothing less than an integrated diversity strategy will allow the
company to excel domestically and internationally.
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Aon Consulting
200 East Randolph
Chicago, IL 60601
Phone: (312)381-4800
Fax: (312) 381-0240
www.aon.com
THE STATS
Firm Type: Subsidiary of Aon
Corporation
Chairman: Donald C. (Don) Ingram
CEO: Andrew M. Appel
No. of Employees Firmwide: 46,000
LOCATIONS
500 offices in more than
120 countries
EMPLOYMENT CONTACT
www.aon.com/about/careers.jsp
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Diversity
Please describe any diversity hiring efforts in regards to women.
Aon offers generous maternity leave to its women employees.
Please describe any diversity hiring efforts in regards to minorities.
Aon celebrates the unique cultural and ideological attributes that make up
who we are as individuals and as a community. The firm has received many
honors in its regards to its minority employees. It scored a Good or B on
its Diversity Report Card from the LaSalle Street Project study and the 2005
Diamond Award from the National Association of African Americans in
Human Resources. Aon was also awarded the 2005 Employer of Choice
award by the Minority Corporate Counsel Association and received 2004
recognition by the International Association of Black Actuaries for its
contributions to the organization.
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LOCATION
Little Rock, AR (HQ)
THE STATS
Firm Type: Private Company
Chairman: Hayes McClerkin
CEO: Robert Shoptaw
No. of Offices Worldwide: 1
No. of Employees Firmwide: 3,000
No. of Actuarial Employees Firmwide:
27
EMPLOYMENT CONTACT
Samuel C. Vorderstrasse
Phone: (501) 378-2863
Fax: (501) 378-2984
E-mail:
[email protected]
www.arkansasbluecross.com/about/
jobopenings.aspx
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Rarely.
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AXA Financial
1290 Avenue of the Americas
New York, NY 10104
Phone: (212) 554-1234
www.axa-financial.com
LOCATIONS
Operations in North America,
Western Europe & the AsiaPacific region
THE STATS
Firm Type: Public Company
Chairman: Henri de Castries
CEO: Christopher M. (Kip) Condron
2005 Firm Net Income Worldwide:
$1.07 billion
No. of Employees Firmwide: 11,800
EMPLOYMENT CONTACT
See career opportunities at
www.axaonline.com.
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LOCATIONS
Boston, MA (HQ)
Six offices Statewide
THE STATS
Firm Type: Private Company
Chairman: William C. Van Faasen
CEO: Cleve Killingsworth
2005 Firm Revenue Worldwide:
$5 billion
2005 Firm Net Income Worldwide:
$265 million
No. of Employees Firmwide: 3,900
EMPLOYMENT CONTACT
Laura Horlitz
Phone: (617) 246-3426
Email: [email protected]
www.bluecrossma.com/careers
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Diversity
Please describe any diversity hiring efforts in regards to women,
minorities and gay and lesbians.
Blue Cross and Blue Shield of Massachusetts demonstrates an ongoing
commitment to building and retaining a diverse workforce. We partner with
key local, regional and national professional organizations and civic
associations to target professionals that can help us meet the needs of our
diverse membership, providers and other business partners. These
partnerships include but are not limited to: The Latino Professional Network;
Association of Latino Professionals in Finance & Accounting; The National
Black MBA; The National Hispanic MBA; National Association of Asian
American Professionals; Urban League of Eastern Massachusetts;
Massachusetts Rehabilitation Commission; Operation A.B.L.E.; and the New
England Regional Black Nurses Association.
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Additional Comments
The actuarial and analytic services department at Blue Cross and Blue Shield
of Massachusetts plays an integral role across the entire company in ensuring
profitable growth while continuing to put our members health first. The
department is responsible for a variety of traditional and nontraditional
actuarial functions including pricing, financial planning, reserving, financial
management of provider contracting and care management strategies, and
trend and medical expense informatics.
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Buck Consultants
1 Pennsylvania Plaza
New York, NY 10119-4798
Phone: (866) 355-6647
E-mail: [email protected]
www.buckconsultants.com
THE STATS
Firm Type: Independent Consulting
Subsidiary of Affiliated Computer
Services
Senior Managing Director: Jan Grude
No. of Employees Firmwide: 55,000
LOCATIONS
New York, NY (HQ)
More than 40 offices worldwide
EMPLOYMENT CONTACT
Patti McCaig
Phone: (201) 902-2536
E-mail:
[email protected]
See join our team at
www.buckconsultants.com
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Compensation
Please describe other monetary benefits.
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LOCATIONS
120 offices in 29 countries
THE STATS
Firm Type: Public Company
Chairman & CEO: John D. Finnegan
2006 Firm Revenue Worldwide: $12
billion
2006 Firm Net Income Worldwide:
$2.5 billion
No. of Employees Firmwide: 10,800
EMPLOYMENT CONTACT
See careers at www.chubb.com
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Compensation
Please describe other monetary benefits.
Benefits at Chubb, which are available after 30 days of employment, include
medical, dental, vision care, disability coverage, employee life insurance,
personal accident insurance, spending accounts, financial planning, business
travel accident insurance, paid time off, family leave (can take up to 12 weeks
unpaid), adoption assistance, WealthBuilding 401(k) plans and the commuter
benefits plan (pays for commuter expenses). A total rewards program called
ChubbChoice allows employees to choose their own plans to fit individual needs.
Diversity
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CIGNA
page 116
CIGNA Corporation
900 Cottage Grove Road, B-261
Hartford, CT 06152
Phone: (860) 226-4827
Fax: (860) 226-3003
www.cigna.com
LOCATIONS
100+worldwide
THE STATS
Firm Type: Public Company
CEO &Chairman: H. Edward Hanway
2005 Firm Revenue Worldwide:
$16.7 Billion
2005 Firm Net Income Worldwide:
$1.6 Billion
No. of Employees Firmwide: 28,000
EMPLOYMENT CONTACT
Brian Evanko, FSA
Phone: (860) 226-4827
Fax: (860) 226-3003
E-mail: [email protected]
careers.cigna.com/cignapage.aspx?
page=40
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Diversity
Please describe any diversity hiring efforts in regards to women.
Historically, 40 to 50 percent of our actuarial hires have been female. We
have flexible work arrangements available, and have received recognition
from Working Mother magazine.
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Additional Comments
CIGNA hires actuaries for the Hartford, Conn., and Philadelphia, Pa.,
locations. CIGNA currently has about 40 actuarial students in the
Connecticut office and about 20 actuarial students in the Pennsylvania office.
CIGNAs actuaries provide actuarial support to the following divisions and
product lines: group health care (CT), group life and disability (PA),
international (PA), reinsurance (CT), corporate actuarial (CT), investment
management (CT), corporate owned life insurance (CT) and settlement
annuities (CT).
CIGNAs actuarial executive development program is run by a full-time
dedicated resource, who is an FSA. The program director is a graduate of the
AEDP and is responsible for recruiting, job rotations, compensation and
ongoing governance.
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LOCATIONS
Operations in the US, Canada,
Europe, Asia-Pacific Region &
Argentina
THE STATS
Firm Type: Public Company
Chairman & CEO: Steven W.
Lilienthal
2005 Firm Net Income Worldwide:
$290 million
No. of Employees Firmwide: 10,100
EMPLOYMENT CONTACT
Go to careers at www.cna.com
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Diversity
CNA has taken many steps to make diversity a vital part of the way it does
business. It strives to ensure diverse talent at all levels, develop diversity
awareness at all levels and functions of employment, encourage all
employees to practice inclusion to ensure maximum employee engagement
and commitment, establish staffing practices, training and development
programs and employee benefits to attract a diverse workforce, develop
partnerships and contracts with minority, women-owned businesses,
exploring new and diverse markets, customers and distribution channels for
CNA products and services, understand global cultures, customers needs and
business practices and develop strategies to meet these needs and partner with
and investing in the diverse communities where CNA does business.
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Conseco, Inc.
11825 N. Pennsylvania Street
Carmel, IN 46032
Phone: (317) 817-6100
Fax: (317) 817-2847
www.conseco.com
LOCATIONS
Major offices in:
Carmel, IN
Chicago, IL
Philadelphia, PA
THE STATS
Firm Type: Public Company
Chairman: R. Glenn Hilliard
CEO: Mr. Claude James Prieur
2005 Firm Revenue Worldwide:
$4,326,500
2005 Firm Net Income Worldwide:
$324.9 million
No. of Employees Firmwide: 4,000
EMPLOYMENT CONTACT
www.conseco.com/wsc/careers/
careers.shtml
The firms web site extols the virtues of working for the company, noting if youre
looking for a career opportunity to learn, grow and be a part of a dynamic
organization, we believe you will find no better company than Conseco.
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LOCATIONS
98 US offices
THE STATS
Firm Type: Private Company
Chairman: Sharon Allen
CEO: James H. Quigley
2006 Firm Revenue Worldwide: For
the fiscal year ending May 31, 2006,
Deloitte and Touche USA LLP and its
subsidiaries recorded $8.77 billion in
revenues
No. of Employees Firmwide: 37,118
Deloitte Consulting LLP is a subsidiary
of Deloitte & Touche USA LLP; US
Member Firm of Deloitte Touche
Tohmatsu.
EMPLOYMENT CONTACT
careers.deloitte.com
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Employees receive study time for multiple exam sittings, along with
materials, preparatory seminars and exam fees paid for by Deloitte
Consulting. Employees are compensated for each hour of exam(s) passed.
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Diversity
Please describe any diversity hiring efforts in regards to women.
Deloitte & Touche USA LLPs Womens Initiative (WIN) has won national
acclaim and recognition for its program and cutting-edge thinking
(www.deloitte.com/us/womensinitiative).
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Additional Comments
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THE STATS
Firm Type: Private Company
Chairman & CEO:
James S. (Jim) Turley
No. of Employees Firmwide:
114,000
LOCATIONS
700 offices in 140 countries
EMPLOYMENT CONTACT
See careers at www.ey.com
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Diversity
Ernst & Young realizes that diversity creates good business. EY was the first
Big Four firm to establish a partner-led office for the recruitment and
retention of minorities and the first to host an international conference
dedicated solely to advancing womens leadership. It was also the only Big
Four firm to host an annual gathering of U.S. and Canadian minority leaders
to share ideas and concerns. The company also created an Office of Minority
Recruiting, an Office of Diversity Strategy and Development and an Office
for Flexibility Strategy, and the Office for Gender Equity Strategy to maintain
an inclusive environment at Ernst & Young.
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LOCATIONS
Based in Los Angeles, CA, and
operates in 41 states across the
country
THE STATS
Firm Type: Subsidiary of Zurich
Financial Services
CEO: Paul N. Hopkins
No. of Total Employees Firmwide:
18,000
EMPLOYMENT CONTACT
Go to career opportunities at
www.farmers.com
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Compensation
Please describe other monetary benefits.
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GEICO
One GEICO Plaza
Washington, DC 20076
Corporate Phone: (800) 824-5404
Auto, Sales & Service Phone:
(800) 861-8380
www.geico.com
LOCATIONS
12 major US locations
THE STATS
Firm Type: Private Company; wholly
owned subsidiary of Berkshire
Hathaway
Chairman, President & CEO, GEICO:
Tony Nicely
President & CEO, Capital Operations:
Lou Simpson
2005 Assets: $21.2 billion (as of
12/31/05)
No. of Employees Firmwide: 20,000
EMPLOYMENT CONTACT
College Recruiting
Phone: (800) 824-5404, ext. 2802
Fax: (301) 986-3092
E-mail: [email protected]
www.geico.com/oncampus
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What are the position titles for new hires coming out of
undergrad and grad school?
Actuarial assistant.
When you start your career as an actuarial assistant at GEICO, youll work in
one of two areaspricing or reserving. Placement in either area is something
we can discuss during the interview process.
In pricing, well teach you about our property-casualty insurance business,
and one of your main responsibilities will include helping us to set our
insurance rates. To do this, youll analyze past driver experiences and present
driver conditions, and assess related trends. Not only will you analyze
automobile rates, but you may also get to work with motorcycle, RV or ATV
data.
If you start your career in reserving, youll work on a team that determines
the amount of money GEICO needs to hold in reserve in order to pay out
future insurance claims.
Regardless of which department youre in, a typical day will include
analyzing premium and loss data using various computer and statistical
programs, helping to develop new insurance products, assisting our
underwriters in determining drivers risk levels, and suggesting systems
updates, capabilities and requirements.
After gaining on-the-job experience in one area, you could consider moving
into the other discipline to gain additional experience and further your career.
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make has to consider the customer and how to make our products better and
more affordable for them.
High Ethical Standards: To operate with uncompromising integrity. It is
one of our core business principles and says it all. Our reputation is
everything, and how we conduct business will always reflect the highest
ethical standards.
Growthoriented: For any company to be successful, it must grow its
customer base. We target profitable growth as one of the most important
ingredients in our past and to our future success.
Hard Work: We proudly say that when you work for GEICO, you will
probably work as hard as or harder than any other place. It is through
everyones work and dedication that we continue to be a successful company.
We set high standards for performance and base rewards on merit, not tenure.
Expenseconscious: We know that unnecessary expenses will make our
products less affordable and therefore less competitive. At GEICO, you
wont find plush offices, expensive paintings on the walls or fancy carpet on
the floor.
Please describe scholarship programs at your firm.
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Rarely/never.
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Genworth Financial
6620 W. Broad Street
Richmond, VA 23230
Phone: (804) 281-6000
Toll Free: (888) 436-9678
Fax: (804) 662-2414
www.genworth.com
THE STATS
Firm Type: Public Company
Chairman & CEO: Michael D. (Mike)
Fraizer
2005 Firm Net Income Worldwide:
$1,221.0 million
No. of Employees Firmwide: 6,900
LOCATIONS
Operating in 22 countries
EMPLOYMENT CONTACT
Go to employment at
www.genworth.com
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Compensation
Please describe other monetary benefits.
Genworths health care programs allow you to choose your own plan.
Medical coverage includes Anthem PPO and Blue Cross-Blue Shield
coverage. Prescription drug coverage is available though Medco, and vision
insurance offers a vision service plan (VSP). Dental coverage is offered
through Genworth EBG-Dentmax, and flexible spending accounts are offered
for health and dependent care. Short-term and long-term disability, paid time
off, 401(k) plans, the Genworth Pension Plan and adoption assistance are also
other monetary perks of working at Genworth.
Diversity
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LOCATIONS
Operations in the US, Brazil,
England, Ireland & Japan
THE STATS
Firm Type: Public Company
Chairman and CEO: Ramani Ayer
2005 Firm Revenue Worldwide: $27.1
billion
2005 Firm Net Income Worldwide:
$2.3 billion
No. of Employees Firmwide: 30,000
EMPLOYMENT CONTACT
Go to careers at
www.thehartford.com
From a recruitment perspective, candidates who demonstrate that they are well prepared
for the interview usually differentiate themselves from other candidates. Interviewees
should research the company, the opportunity and be prepared to ask questions during your
interview. In addition, candidates should ensure that their resume, cover letter and thankyou note are free of errors.
Please describe your internship program.
Summer internships: www.thehartford.com/actuarial
The undergraduate summer intern program runs from May until August. The
minimum requirements in order to be considered eligible for the summer internship
program are a 3.0 GPA or higher and an academic course of study (major or
concentration) that aligns with the position and the business. The actuarial intern
programs, in both the life and property and casualty businesses, are considered among
the best in the insurance industry. They build an individuals actuarial skills while
simultaneously sharpening communication and leadership skills. Candidates who
desire a career as an actuary and are interested in the intern programs should possess
strong communication and leadership skills as well as have passed a minimum of one
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Diversity
The Hartford encourages employees to practice these five inclusive behaviors
to accept diversity: 1. Listen carefully to the person speaking until he/she
feels understood; 2. Accept others frame of reference as true for him/her; 3.
Be clear, honest and direct; 4. Build on others thoughts, ideas and feelings;
5. Be bravetake risks and speak up for what you believe in.
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Hay Group
The Wanamaker Building
100 Penn Square East
Philadelphia, PA 19107-3388
Phone: (215) 861-2000
Fax: (215) 861-2111
www.haygroup.com
LOCATIONS
Operates 86 offices in 47 countries
THE STATS
Firm Type: Private Company
Chairman: Chris Matthews
No. of Employees Firmwide: more
than 2,000
EMPLOYMENT CONTACT
www.haygroup.com/ww/careers
There is no one Hay Group person. Hay Group looks for people who are bright and
inquisitive and who will act on their own initiative and enjoy a challenge. They recruit
people who are willing to make courageous decisions substantiated by solid data and
reasoning. While knowledge is good, they look for people who can turn this knowledge
into insight, impacting their clients business and helping them achieve their future goals.
Hay Group looks for committed peoplepeople who are not afraid of rolling their sleeves
up to get a job done and done well. They like diverse peoplethose with different
backgrounds, experience, qualifications and views. Candidates should be insightful,
courageous and committed.
Diversity
Hay Group is a global company where every individual has the opportunity to grow
and succeed without regard to ethnicity, gender, background or orientation. We believe
that diversity widens the range of experience and possibilities for our clients, and we
also believe it makes working together at Hay Group more interesting and exciting.
Interoffice transfers are increasingly common and the top management of Hay Group
represents the geographical as well as functional diversity of the firm.
As a responsible employer, Hay Group monitors the implementation of equal
opportunities principles and take active steps to ensure that all employees are treated
equally and fairly in terms of recruitment, training, promotion, reward and overall career
progression.
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LOCATIONS
Offices in 35 countries
THE STATS
Firm Type: Public Company
Chairman & CEO: Russell P. (Russ)
Fradin
2006 Firm Net Income Worldwide:
$115.9 million
No. of Total Employees Firmwide:
22,000
EMPLOYMENT CONTACT
Go to working here at
www.hewitt.com
The only requirements for a candidate at Hewitt Associates are the ability and desire to
grow, develop and adapt to change. Good teamwork skills are also helpful since most
work is done in teams.
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Compensation
Please describe other monetary benefits.
Medical benefits offered by Hewitt Associates provide a range of choices
depending on your location: a managed deductible plan with a health
reimbursement account, a preferred provider organization (PPO) option, an
exclusive provider organization (EPO), and a health maintenance
organization (HMO) option. All these options include prescription drug
coverage. Hewitt Associates also offer dental and vision care and a health
care spending account. Health care and wellness credits are also available.
Each year from Hewitt, employees receive medical and dental/vision credits
based on elections and wellness credits based on your wellness pledges to
help purchase your health care coverage. Retirement, a savings plan and a
company 401(k) match are also offered to Hewitt employees. Programs to
protect employees income include short-term and long-term disability, life
insurance and accidental death and dismemberment (AD&D) insurance.
Paid time off and holidays are also given to Hewitt employees.
Diversity
Hewitt Associates has a number of diversity outreach partners including the
Diversity Pipeline Alliance, the National Association for African Americans
in Human Resources (NAAAHR), Black Data Processing Associates
(BDPA), the National Black MBA Association (NBMBAA), the Hispanic
Alliance for Career Advancement (HACE), the National Society of Hispanic
MBAs (NSHMBA), Chicago United and the Out & Equal Workplace
Advocates (O&E). The Supplier Diversity Program at Hewitt Associates has
formed alliances with diverse suppliers and organizations consistent with
their business objectives. Black Associates at Hewitt Associates (BAHA)
focuses on professional development via a networking and mentoring forum
for black associates. Membership spans countries and cultures, including
North America, Africa and the Caribbean. PrideAlliance promotes
appreciation and respect for gay, lesbian, bisexual and transgender associates,
ensuring their right to deliver excellence in a comfortable and safe work
environment. Affirmations of gay, lesbian, bisexual and transgender
employees can be viewed on the web site. The Hewitt Asian Diversity
Network (HADN) facilitates professional growth for Asian associates across
all our business functions and locations, and the Latino and Hispanic
Associates (LAHA) offers career networking and development opportunities
for Latino and Hispanic associates, recruiting opportunities and networking
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Highmark Inc.
120 Fifth Avenue Place
Pittsburgh, PA 15222-3099
Phone: (412) 544-7000
Fax: (412) 544-8368
www.highmark.com
LOCATIONS
Operations in:
Western PA, Central PA, & WV
THE STATS
Firm Type: Private (non-for-profit)
Company
Chairman: J. Robert Baum
CEO: Kenneth R. Melani
2005 Firm Net Income Worldwide:
$341.6 million
No. of Employees Firmwide: 12,000
EMPLOYMENT CONTACT
Go to Working at Highmark at
www.highmark.com
Compensation
Diversity
At Highmark, we believe that our strength is in our people. The synergy of different
skills, talents, potential and backgrounds has made Highmark one of the nations
largest and most successful health insurers. We strive to harness the power of diversity
in the workplace and in the community to help all people live longer, healthier lives.
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LOCATIONS
Operations Nationwide
THE STATS
Firm Type: Public Company
Chairman & CEO: Jon A. Boscia
2005 Firm Net Income Worldwide:
$831.1 million
No. of Employees Firmwide: 5,259
No. of Actuarial Employees Firmwide:
approximately 60
EMPLOYMENT CONTACT
Go to careers under about us at
www.lfg.com
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Compensation
LFG offers competitive salary with bonus programs based on business,
personal and department results.
Please describe monetary benefits.
Benefits at LFG include a comprehensive medical, dental and vision/hearing
plan, and they also offer a health care expense account. Paid time off,
vacations, holidays, a savings and profit-sharing plan with company
contributions to 401(K) and an employee retirement plan are available.
Domestic partners also qualify for benefits.
Please describe other perks.
Notable perks include and an on-site fitness center with variety of classes offered
in certain locations, on-site massage therapy in certain locations, comprehensive
periodic physical exams and matching gifts to higher education.
Diversity
LFG has received many awards regarding its diversity efforts. Lincoln
National Corporation ranked in 100 Best Companies for Working Mothers by
Working Mother magazine in September 2005, and also received the honor of
the highest score possible on Corporate Equality Index for the Human Right
Campaign the same month.
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THE STATS
Firm Type: Wholly owned subsidiary of
Marsh & McLennan Companies, Inc.
Chairman & CEO: M. Michele Burns
No. of Employees Firmwide: more
than 15,700
LOCATIONS
190 cities & 41 countries &
territories
EMPLOYMENT CONTACT
[email protected]
See joining Mercer at
www.mercerhr.com
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Compensation
There are different types of compensation that are associated with different
job levels. However, all of Mercers reward programs share a common
foundation. Using our Partnering for Success program, Mercer establishes a
clear link between the work employees do and rewards. All employees set
annual performance goals in four categoriesclients, people, process and
financial. Compensation decisions are based on the extent to which
employees achieve those goals and demonstrate the results of their learning
and development activities.
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Diversity
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MetLife Inc.
200 Park Ave.
New York, NY 10166-0188
Phone: (212) 578-2211
Toll Free: (800) 638-5433
Fax: (212) 578-3320
www.metlife.com
THE STATS
Firm Type: Public Company
Chairman & CEO: C. Robert
(Rob) Henrikson
2005 Firm Net Income Worldwide:
$4.714 billion
No. of Employees Firmwide: 65,500
LOCATIONS
Operations globally.
EMPLOYMENT CONTACT
See careers at www.metlife.com
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Compensation
Please describe monetary benefits.
Benefits at MetLife include medical, dental, life and mental health coverage,
disability,401(k), long-term care, an adoption assistance program, domestic
partner benefits, lactation centers, a tuition refund program, fitness programs
and flexible work arrangements.
Diversity
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Milliman, Inc.
1301 Fifth Avenue, Suite 3800
Seattle, WA 98101
Phone: (206) 624-7940
Fax: (206) 340-1380
www.milliman.com
LOCATIONS
Over 40 offices worldwide
THE STATS
Firm Type: Private Company
Firm Chairman: Bradley Smith
Firm CEO: Patrick Grannan
2005 Firm Revenue Worldwide: $435
million
No. of Employees Firmwide: 2000+
No. of Actuarial Employees Firmwide:
900+ actuaries and consultants
EMPLOYMENT CONTACT
www.milliman.com
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Some continuing education and training programs are offered at the local
office level, and some are offered for actuaries and consultants throughout the
firm. These often include training for skills in addition to technical actuarial,
such as presentation skills, public speaking skills, networking, business
development, business writing, etc.
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Diversity
Please describe any diversity hiring efforts in regards to women,
minorities and gay and lesbians.
We are an equal opportunity employer.
Additional Comments
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Northwestern Mutual
720 East Wisconsin Avenue
Milwaukee,WI 53202
www.nmfn.com
LOCATIONS
Milwaukee, WI (HQ)
THE STATS
Firm Type: Private Company
CEO: Edward J. Zore
2005 Firm Revenue Worldwide: $18.4
billion
2005 Firm Net Income Worldwide:
$924 million
No. of Employees Firmwide:
approximately 5,000
EMPLOYMENT CONTACT
Ken Latus
E-mail:
[email protected]
See careers at www.nmfn.com
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LOCATION
Horsham, PA (HQ)
THE STATS
Firm Type: Private Company
Chairman & CEO: Robert Chappell
2005 Firm Revenue Worldwide: $1.2
billion
2005 Firm Net Income Worldwide:
$112 million
No. of Employees Firmwide:
approximately 500 in the home
office
EMPLOYMENT CONTACT
Eric Johnson
E-mail: [email protected]
See careers at
www.pennmutual.com
Penn Mutual recruits at Penn State University and Temple University and through
recruiters, job postings and web sites.
What are the position titles for new hires coming out of undergrad? Out
of grad school?
Actuarial technician; actuarial analyst (title depends on exams and experience, grad
school degree doesnt necessarily matter).
Please describe the hiring process at your firm.
Candidates meet with five to six associates for 45 minutes each. Usually we do a phone
screen interview before extending a home office invitation. We ask interview questions
testing several key areas of competence.
What are some of the requirements for jobs?
3.0 GPA or higher, at least one actuarial exam passed, potential leader in the company,
strong technical and communication skills.
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Diversity
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PricewaterhouseCoopers
300 Madison Avenue
New York, NY 10017
Phone: (646) 471-3000
Fax: (813) 286-6000
www.pwc.com
LOCATIONS
THE STATS
Firm Type: Private Partnership
CEO: Samuel A. DiPiazza Jr.
2005 Firm Net Income Worldwide:
$21.986 billion
No. of Employees Firmwide:
142,162
EMPLOYMENT CONTACT
See careers at www.pwc.com
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Diversity
To help diversity efforts, the chief diversity officer is responsible for driving
strategies and initiatives throughout PricewaterhouseCoopers. He provides
ongoing functional accountability for issues surrounding diversity and
work/life.
The New Moms Lactation Program gives access to educational materials and
unlimited pre/post-birth counseling from nationally recognized lactation
specialists. Private mothers rooms are also available in many of its offices.
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Prudential Financial
751 Broad Street
Newark, NJ 07102-3777
Phone: (973) 802-6000
Toll Free: (800) 346-3778
Fax: (973) 802-4479
www.prudential.com
THE STATS
Firm Type: Public Company
Chairman & CEO: Arthur F.
(Art) Ryan
2005 Firm Net Income Worldwide:
$3.54 billion
No. of Employees Firmwide: 38,853
LOCATIONS
Operations in the US, Asia,
Europe & Latin America
EMPLOYMENT CONTACT
www.prudential.com/careers
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Compensation
Please describe other monetary benefits.
Diversity
Prudentials diversity and work/life balance programs have become a
fundamental element of its philosophy and culture. Honors for its diversity
efforts have been given the following recognitions: Top 100 List-Companies
providing the most opportunities for Hispanics (Hispanic Magazine), Top 100
Employers of Entry-Level College Graduates (The Black Collegian
magazine), Partners for Change Award-National Black MBA Association,
Central NJ Chapter, Top 10 Companies to Work For (WE Magazine), Top 25
Companies for Executive Women (Working Women magazine) and Top 10
Companies for Working Mothers (Working Mother magazine).
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LOCATIONS
Offices Across the US & Canada
THE STATS
Firm Type: Private Company
Chairman: Howard Fluhr
CEO: Joseph A. (Joe) LoCicero
EMPLOYMENT CONTACT
www.segalco.com/careers/index.html
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LOCATIONS
Operations in US & Canada
THE STATS
Firm Type: Private Company
Firm Chairman & CEO: Edward B.
(Ed) Rust Jr.
No. of Employees Firmwide: 79,200
EMPLOYMENT CONTACT
See About Us then Career Center
at www.statefarm.com
Discuss a time when you had to deal with major change. How did you respond to this
situation? How did you prepare for the change?
Tell me about a time when you thought out of the box to come up with a creative
solution to a problem. Was your solution effective? Why or why not?
Have you ever worked with a difficult customer? How was the customer being
difficult? How did you respond to the customer? How did the customer respond to
you?
In the past, how have you organized information to ensure that it would be readily
accessible?
Explain how you prepared for this interview.
Tell me about a time when you had a difficult and/or complex problem to solve. How did
you organize the available information? Was your decision/solution effective? How?
How have you ensured you deliver a quality product, even in extremely busy times?
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In your present job, what preventive measures do you take to reduce the
chance of a stressful situation from occurring?
What do you do in your current/previous positions to contribute to the team
environment? Be specific.
What do you know about State Farm Insurance Companies?
Please comment on your summer internship.
State Farm Insurance Companies actuarial internship program, typically held
from May to August, will provide you with an insight into the actuarial
profession. To qualify for an internship, candidates must meet the following
requirements: be majoring in math, actuarial science or statistics; have at least
a 3.2 GPA; possess strong communication skills, analytical skills and
computer skills; and have successful completion of one actuarial exam.
State Farm may offer tuition assistance to actuarial students that qualify.
Tuition assistance may be awarded at the end of the successful completion of
an internship in conjunction with an offer of full-time employment in one of
the actuarial departments following graduation. The funds are used to
reimburse the student for senior year tuition. As an actuarial intern, projects
and responsibilities include researching and making recommendations for
deductible adjustments, commercial auto and school bus rating spreadsheet
analysis, contingency margin analysis, preparing studies analyzing policy
retention, preparing material used to support rate filings, assisting in loss and
premium forecast and structuring rating zone configurations. If you are
interested in our internship program and meet the qualifications, you can
contact your placement/career center.
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Diversity
We hire, retain, promote, compensate and provide terms, conditions and
privileges of employment solely on the basis of the companies human
resources requirements and each persons qualifications. We have an obligation
to our policyholders to determine realistically our needs for employees and to
select the best qualified available people to handle their insurance business. In
fulfilling our obligations, we will not practice, tolerate, nor condone
discrimination because of age, race, color, religion, sex, national origin, sexual
orientation or disability. All employees must respect the individuality and
dignity of one another and the customers we serve. We comply at all times with
the letter and the spirit of all national, state and local laws pertaining to
employment.
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Towers Perrin
File name:
pp_178_Towers.pdf
page 178
Towers Perrin
One Stanford Plaza
263 Tresser Boulevard.
Stamford, CT 06901
Phone: (203) 326-5400
www.towersperrin.com
LOCATIONS
The firm has offices and business
partner locations in the US,
Canada, Europe, Asia, India, Latin
America, South Africa, Australia
and New Zealand
THE STATS
Firm Type: Private Company
CEO & Chairman: Mark Mactas
2005 Firm Revenue Worldwide:
$1,350.9 million
2005 Firm Net Income Worldwide:
$1,311.6 million
No. of Employees Firmwide: over
5,000 worldwide
EMPLOYMENT CONTACT
careers.towersperrin.com
Worldwide.
In what lines of business do you utilize actuaries?
HR Services and Tillinghast.
What are the position titles for new hires coming out of undergrad and
grad school?
Associates.
Please describe the hiring process at your firm.
We meet over half of our candiates through our campus recruiting process. We
participate in career fairs and presentations, and other targeted club events at campuses
across the country. We review candidates resumes and online applications; from there,
we determine who will be interviewed on campus. Candidates who exhibit strong
competencies during this first-round interview are invited to an office event with other
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candidates. Usually, these events are based on line of business and are
sometimes national in scope; other times they are held either for openings in a
specific office or geographic region. A series of interviews take place during the
interview day, and the candidate also has several opportunities to learn about our
firm through panel discussions and meals with recently-hired associates.
Candidates are provided with their disposition within a day or two of the
interview event. For candidates whom we do not meet via direct campus
activies, we undergo the same resume and application review process, and then
complete the first-round interview via a phone call. Similar to the first round oncampus interview process, for those candidates who fare well after this first
round, they are invited to an office event and the procedure is the same as
detailed above. Therefore, at office events, there is a mixture of candidates who
come to us from our direct campus activities along with various other sources.
What are some of the requirements for jobs?
We do not have a minimum GPA, as we provide candidates with the ability
to explain their GPAs on their applications. We also do not have specific
degree requirements, but find that many of the candidates have actuarial
science, mathematics, statistics and other quantitative degrees. We look for
evidence of initiative, leadership, strong communication, and interpersonal
and team skills on candidates resumes. Interviews are based on their
educational, employment and extracurricular activities.
Do you require or desire undergraduate candidates to have one or
more of the Society of Actuaries or Casualty Actuary Society
exams completed prior to hiring?
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Diversity
Please describe any diversity hiring efforts in regards to women,
minorites, and gays and lesbians.
We are an equal opportunity employer. Women, minorities, and gays and
lesbians are treated fairly in terms of hiring and promotional opportunities.
Additional Comments
We are a premier consulting firm serving 75 percent of the worlds 500 largest
companies and 75 percent of the Fortune 1000 U.S. companies. Working at
Towers Perrin provides employees with exciting opportunities, as our clients
continue to provide us challenges and look to us to partner with them in
providing solutions.
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THE STATS
Firm Type: Public Company
CEO: Martin Hudson
2005 Firm Revenue Worldwide:
$1.622 billion
No. of Employees Firmwide: 32,000
LOCATIONS
Operations in the US, Ireland &
Canada
EMPLOYMENT CONTACT
E-mail: [email protected]
www.stpaultravelers.com/careers
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Diversity
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UnitedHealth Group
UnitedHealth Group Center
9900 Bren Road East
Minnetonka, MN 55343
Phone: (952) 936-1300
Fax: (952) 936-7430
www.unitedhealthgroup.com
THE STATS
Firm Type: Public Company
Chairman: Richard T. Burke Sr.
CEO: Stephen J. (Steve) Hemsley
2005 Firm Net Income Worldwide:
$3.3 billion
No. of Employees Firmwide: 55,000
LOCATIONS
Operations across the US & in
Europe
EMPLOYMENT CONTACT
www.unitedhealthgroup.com/careers
/index.htm
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Diversity
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UnumProvident Corporation
1 Fountain Square
Chattanooga, TN 37402
Phone: (423) 294-1011
Fax: (423) 294-3962
www.unum.com
LOCATIONS
30 sales offices across the United
States and home office and field
locations in Chattanooga,
Tennessee; Glendale, California;
Portland, Maine and Worcester,
Massachusetts
THE STATS
Firm Type: Public Company
No. of Employees Firmwide: 11,300
Chairman: Jon S. Fossel
CEO: Thomas R. Watjen
2005 Firm Net Income Worldwide:
$513.6 million
EMPLOYMENT CONTACT
www.unum.com/careers
UnumProvident recruits from colleges across the nation throughout the year at career
fairs and through on-campus interviews. Additionally, the firm offers job openings on
its web site with challenging opportunities to people looking to join an organization
that recognizes and rewards the contributions of its employees. UnumProvident
describes its offices as dynamic work environments, a wide range of career options,
career advancement opportunities, plus the chance to join the world leader in income
protection. More information is available on its web site.
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Diversity
UnumProvident provides equal employment and advancement opportunities
for all employees regardless of a persons race, color, religion, national origin,
age, disability, military status, gender or sexual orientation.
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Watson Wyatt
File name:
pp_190_Watson.pdf
page 190
LOCATIONS
Operations worldwide
THE STATS
Firm Type: Private Company
CEO: John Haley
2005 Total Firm Revenue Worldwide:
$737.4 million
No. of Employees Firmwide: 6,000
No. of Employees in Retirement
practice: 2,700
EMPLOYMENT CONTACT
Robin Wiley
Phone: (713) 507-1702
Fax: (281) 562-7670
E-mail: [email protected]
www.watsonwyatt.com/careers
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We are looking for highly talented individuals from all age groups, who not
only meet the academic requirements but can also explain why theyre
interested in building a career with us and demonstrate some of the skills that
our consultants draw upon daily (such as communication, attention to detail,
analytical, problem-solving and decision-making skills).
Specific
requirements include:
Bachelors degree in mathematics, statistics, actuarial science or related
degree.
Mathematical aptitude, solid decision-making capabilities and strong
analytical skills
Ability to work effectively in a team-based environment
Attention to detail and commitment to task
Strong computer skills
Strong communication skills
Ability to pass actuarial exams
GPA of 3.0 or higher
Strong SAT or ACT scores
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Must pass one exam every 18 months to remain eligible for program benefits.
Eligibility allows for one waiver of a sitting off after completion of three
exams.
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Disability and life insurance: For the hard times no one wishes to contemplate,
Watson Wyatt stands by its employees, protecting your family from financial
burdens in the case of your death, severe injury or physical inability to work.
Watson Wyatt provides you with flexible benefit credits to purchase life
insurance of up to 250 percent of your annual salary and accidental death and
dismemberment coverage up to $150,000.
Pension plan: We invite all Watson Wyatt associates to participate in our
generous pension plan. You are 100 percent vested after just five years and
will be able to take advantage of benefits at a young 55 years of age.
Savings plan: Contribute immediately upon employment towards your future
with the help of Watson Wyatt. Watson Wyatt offers flexible investment
options with two matching components: a base match and a Company
performance match.
Employee stock purchase plan (ESPP): Weve made investing in your
company easy with a simple payroll deduction plan. Plus, you are entitled to
a 5 percent associate discount for all Watson Wyatt stock purchases up to the
annual limit of $25,000 per year.
Paid time off (PTO) and holidays: You work hard, so you deserve a vacation
every once in a while. Vacation, sick leave and personal time are combined
into Watson Wyatts PTO program, designed to provide you with greater
flexibility in using your time off. In addition to your PTO, Watson Wyatt
pays you through the six major holidays: New Years Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas.
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Diversity
Please describe any diversity hiring efforts in regards to women,
minorites, and gays and lesbians.
Watson Wyatt commits to developing a diverse workforce and creating a
positive and empowering environment for all employees. Our goal is to
create a workplace that attracts the most talented associates and enables them
to develop their fullest potential. We believe that a successful company
embodies a diverse yet inclusive culture, where we respect and leverage the
differences we bring to the workplace.
To be a leader in todays highly competitive marketplace, we need a diverse
set of talents and skills. Building a representative workforce is just a start.
We also know that to fully understand and serve our clients diverse needs, we
need to reflect and identify with them. Valued, innovative solutions come
through constructive dialogue among respected colleagues who bring
different perspectivesin business and lifeto client issues.
Additional Comments
For more than 50 years, world-class organizations have partnered with Watson
Wyatt to manage the design, funding and delivery of strategic retirement
programs. Today, we are the retirement consulting firm of choice in our industry.
We provide actuarial services to more of the top-300 pension funds
worldwide than any other consulting firm.
We serve as actuary to the three largest corporate pension plan sponsors in
the U.S., and those relationships have endured for more than 25 years.
Weve grown our market share among Fortune 1000 and Pensions &
Investments 1000 companies during each of the past seven years.
We have the best client retention rate in the industry.
What sets us apart:
Thought leadership and creativity: Known as an innovator in retirement plan
design, Watson Wyatt developed the first pension equity plan in the U.S. We
also developed a total risk budgeting approach for assessing investment and
liability-related risks in a uniform manner. We collaborate with clients to
design defined benefit, defined contribution and retiree health benefit
programs that reinforce your business strategy.
Groundbreaking research: Watson Wyatt leads the industry in retirementrelated research, and has helped shape the debate on demographics and
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related workforce planning issues. Ten years ago, our research on retirement
policy, The Sleeping Giant, predicted the U.S. demographic crisis and its
effect on retirement programs, and we have remained at the forefront of this
issue. Recently, our leading retirement researchers published, The Economic
Implications of Aging Societies, addressing global demographic challenges.
We have conducted the most thorough research to date on the shift from
traditional pensions to hybrid plans and the ramifications for employers and
workers. We were the first to study and advocate for phased retirement
programs, and recent efforts include one of the most in-depth surveys to date
on worker attitudes toward phased retirement.
Commitment to our clients interests: Now more than ever, it is crucial for our
clients to have an advocate when their interests are at stake. For more than two
decades, Watson Wyatt has been at the forefront of U.S. retirement policy
discussions. Two years ago we helped plan sponsors form the Coalition to
Preserve the Defined Benefit System. Today, the Coalition membership is made
up of over 75 plan sponsors representing over 1.5 million workers. Together, we
are advocating for policy that ensures cash balance and other hybrid plan designs
remain a viable retirement security option for workers and employers.
Advanced technologies: We offer the best actuarial systems, consulting tools
and administrative solutions in our industry. Our technology investments put
powerful tools directly in our clients hands. Our tools in conjunction with
our thoughtful consulting solutions combine to deliver efficient results.
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WellPoint, Inc.
120 Monument Circle
Indianapolis, IN 46204
Phone: (317) 488-6000
Fax: (317) 488-6028
www.wellpoint.com
THE STATS
Firm Type: Public Company
Chairman & CEO: Larry C. Glasscock
2005 Firm Net Income Worldwide:
$2.464 billion
No. of Employees Firmwide: 42,000
LOCATIONS
Offices across the US
EMPLOYMENT CONTACT
www.wellpoint.com/careers/default.asp
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Merit increases are offered to employees. Base pay merit increases are
determined by performance and pay relative to market data. The company offers
an annual incentive plan (AIP). The target incentive opportunity is highly
competitive and ranges from 5 percent to 35 percent of eligible earnings based
on your job level. Actual payouts can be as much as two times the target in a
given year when the company and your work group achieve superior
performance levels.
Please describe other monetary benefits.
WellPoint developed a total rewards program that allows flexibility to choice
of plan. Medical, dental and vision coverage are offered to employees. Other
benefits include disability, employee assistance and work/life program,
programs to improve your health and flexible spending accounts. To ensure
employees financial futures, 401(k) plans, employee stock purchase plans,
retiree medical spending accounts, life insurance and long-term disability are
offered through the company. For employee personal needs, paid time off,
holidays, adoption assistance and home/auto insurance are available.
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Diversity
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ACTUA
CAREE
GUIDE
xxxx
RECRUITING
FIRM
DIRECTORY
S. C. International, Ltd.
1315 Butterfield Rd #224
Downers Grove, IL 60515
Phone: 800-543-2553
Fax: (630)-963-3170
www.scinternational.com
LOCATIONS
Downers Grove, IL
MAJOR PRACTICES
Consulting Firms
Pension/Retirement, Benefits
Administration, Health & Welfare,
Life, Employee Benefits,
Property/Casualty, International
Accounting Firms
Third Party Administrators
Financial Institutions
Insurance Companies
EMPLOYMENT CONTACT
Scott Rollins
President
Phone: (630)-963-3033
E-mail: [email protected]
FIRM DESCRIPTION
Formed in 1986, S. C. International,
Ltd. specializes in the recruitment of
Actuaries at all levels for Insurance
Companies, Human Resource,
Consulting Firms and Corporations.
The Company expanded in 1996 to
reflect the increasing needs of the
clients beyond Actuarial both nationally
and internationally into allied areas as
well. The value of S.C. International
lies in our communication and
accessibility. Our relationships provide
opportunities at all levels from
technical to officer level. A job search
is an important and necessary step for
professional growth. Changing
companies and geographic locations
can be very manageable with expertise
and guidance. We play an integral role
in both sourcing personnel and
coordinating the interview process,
from initial conversations to meetings
and final negotiations.
Vaults Recruiting Firm Directory section features information from Vault recruiting
firm sponsors. For information on listing your firm, contact [email protected]
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G V
'
www.vault.com/finance
ACTUA
CAREE
GUIDE
APPENDIX
Answers to Exam Sample Questions
Further Reading
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Answers to Exam
Sample Questions
Answers to sample questions for Exam 1/P
1) Solution: D
Let N(C) denote the number of policyholders in classification C. Then
N(Young Female Single) = N(Young Female)-N(Young Female
Married) = N(Young)-N(Young Male)-[N(Young Married)-N(Young
Married Male)] = 3000-1320-(1400-600) = 880.
2) Solution: B
Let Y = positive test result
D = disease is present (and ~D = not D)
Using Bayes theorem:
P[D|Y] =
P[Y|D]P[D]
=
(0.95)(0.01)
= 0.657
P[Y|D]P[D]+ P[Y|~D]P[~D] (0.95)(0.01)+(0.005)(0.99)
3) Solution: E
We are given that R is uniform on the interval (0.04,0.08) and V= 10,000er.
Therefore, the distribution function of V is given by:
F(v) = Pr [V < v] = Pr [10,000er < v] = Pr [R < 1n(v)-1n(10,000)] =
1 s 1n(v)-1n(10,000) dr = 1 r | 1n(v)-1n(10,000) = 25 1n(v)-25 1n (10,000) -1
0.04 0.04
0.04 | 0.04
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3) Solution: A
Value of initial perpetuity immediately after the fifth payment (or any other time)
= 100 (1/i) = $100/.08 = $1,250. Exchange for 25-year annuity-immediate
paying X at the end of the first year, with each subsequent payment increasing
by 8 percent, implies $1,250 (value of the perpetuity) must = X (v + 1.08 v2 +
1.082 v3 + 1.0824 v25) (value of 25-year annuity-immediate) = X (1.08-1 + 1.08
(1.08)-2 + 1.082 (1.08)-3 + 1.0824 (1.08)-25) (because the annual effective rate of
interest is 8 percent) = X (1.08-1 +1.08-1 + 1.08-1) = X [25(1.08-1)]. So, $1,250
(1.08) = 25 X or X = 54
4) Solution: A
Equate present values: 100 + 200 vn + 300 v2n = 600 v10
vn=.76
100 + 152 + 173.28 = 425.28. Thus, v10 = 425.28/600 = 0.7088 => i = 3.5 percent
5) Solution: B
Chris equation of value at end of year:
(Value of contributions) .5 P(1+i) + 760 = P* + .5 P (1.06) (Value of returns),
where P = price stock sold for. (*Proceeds received for stock sale at
beginning of year are in noninterest-bearing account per government
regulations.) Thus, Chris yield i = ((1.03) P - 760)/(.5 P).
Joses equation of value at end of year:
(Value of contributions) .5 P(1+j) + 760 + 32 = P* + .5 P (1.06) (Value of
returns). Thus, Joses yield j = ((1.03) P - $792)/(.5 P).
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5) Solution: B
www.soa.org/ccm/cms-service/stream/asset/?asset_id=8576040
(page 73, question 108)
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3M | A.T. Kearney | ABN Amro | AOL Time Warner | AT&T | AXA | Abbott Laboratories
| Accenture | Adobe Systems | Advanced Micro Devices | Agilent Technologies | Alcoa
Inc. | Allen & Overy | Allstate | Altria Group | American Airlines | American Electric
Power | American Express | American International Group | American Management
Systems | Apple Computer | Applied Materials | Apria Healthcare Group | AstraZeneca
Automatic Data Processing | BDO Seidman | BP | Bain & Company | Bank One | Bank of
America | Bank of New York | Baxter | Bayer | BMW | Bear Stearns | BearingPoint
BellSouth | Berkshire Hathaway | Bertelsmann | Best Buy | Bloomberg | Boeing | Booz
Allen | Borders | Boston Consulting Group | Bristol-Myers Squibb | Broadview
International| Brown Brothers Harriman | Buck Consultants| CDI Corp.| CIBC World
Markets | CIGNA | CSX Corp| CVS Corporation | Campbell Soup Company| Cap Gemin
Ernst & Young| Capital One | Cargill| | Charles Schwab | ChevronTexaco Corp. | Chiquita
Brands International | Chubb Group | Cisco Systems | Citigroup | Clear Channel | Clifford
Chance LLP | Clorox Company | Coca-Cola Company | Colgate-Palmolive | Comcast
Comerica | Commerce BanCorp | Computer Associates | Computer Sciences
Corporation | ConAgra | Conde Nast | Conseco | Continental Airlines | Corning
Corporate Executive Board | Covington & Burling | Cox Communications | Credit Suisse
First Boston | D.E. Shaw | Davis Polk & Wardwell | Dean & Company | Dell Computer
Deloitte & Touche | Deloitte Consulting | Delphi Corporation | Deutsche Bank | Dewey
Ballantine | DiamondCluster International | Digitas | Dimension Data | Dow Chemical
Dow Jones | Dresdner Kleinwort Wasserstein | Duracell | Dynegy Inc. | EarthLink
Eastman Kodak | Eddie Bauer | Edgar, Dunn & Company | El Paso Corporation
Electronic Data Systems | Eli Lilly | Entergy Corporation | Enterprise Rent-A-Car | Ernst
& Young | Exxon Mobil | FCB Worldwide | Fannie Mae | FedEx Corporation | Federa
Reserve Bank of New York | Fidelity Investments | First Data Corporation | FleetBoston
Financial | Ford Foundation | Ford Motor Company | GE Capital | Gabelli Asset
Management | Gallup Organization | Gannett Company | Gap Inc | Gartner | Gateway
Genentech | General Electric Company | General Mills | General Motors | Genzyme
Georgia-Pacific | GlaxoSmithKline | Goldman Sachs | Goodyear Tire & Rubber | Grant
Thornton LLP | Guardian Life Insurance | HCA | HSBC | Hale and Dorr | Halliburton
Hallmark | Hart InterCivic | Hartford Financial Services Group | Haverstick Consulting
Hearst Corporation | Hertz Corporation | Hewitt Associates | Hewlett-Packard | Home
Depot | Honeywell | Houlihan Lokey Howard & Zukin | Household International | IBM
IKON Office Solutions | ITT Industries | Ingram Industries | Integral | Intel | Internationa
Paper Company | Interpublic Group of Companies | Intuit | Irwin Financial | J. Walter
Thompson | J.C. Penney | J.P. Morgan Chase | Janney Montgomery Scott | Janus
Capital | John Hancock Financial | Johnson & Johnson | Johnson Controls | KLA-Tencor
Corporation | Kaiser Foundation Health Plan | Keane | Kellogg Company | Ketchum
Kimberly-Clark Corporation | King & Spalding | Kinko's | Kraft Foods | Kroger | Kurt
Salmon Associates | L.E.K. Consulting | Latham & Watkins | Lazard | Lehman Brothers
Lockheed Martin | Logica | Lowe's Companies | Lucent Technologies | MBI | MBNA
Manpower | Marakon Associates | Marathon Oil | Marriott | Mars & Company | McCannErickson | McDermott, Will & Emery | McGraw-Hill | McKesson | McKinsey & Company
| Merck & Co. | Merrill Lynch | Metropolitan Life | Micron Technology | Microsoft | Miller
Brewing | Monitor Group | Monsanto | Morgan Stanley | Motorola | NBC | Nestle | Newel
Rubbermaid | Nortel Networks | Northrop Grumman | Northwestern Mutual Financia
Network | Novell | O'Melveny & Myers | Ogilvy & Mather | Oracle | Orrick, Herrington &
Sutcliffe | PA Consulting | PNC Financial Services | PPG Industries | PRTM | PacifiCare
Health Systems | PeopleSoft | PepsiCo | Pfizer
| Pillsbury Winthrop | Pitney
Go| Pharmacia
to www.vault.com
Bowes | Preston Gates & Ellis | PricewaterhouseCoopers | Principal Financial Group
Procter & Gamble Company | Proskauer Rose | Prudential Financial | Prudentia
Securities | Putnam Investments | Qwest Communications | R.R. Donnelley & Sons
Workplace culture
Compensation
Hours
Diversity
Hiring process
Recommended Reading
www.beanactuary.org
This site, cosponsored by the CAS and SOA, serves as an excellent
introduction for would-be actuaries looking for a career in the field. It has
many links to a variety of resources across the Internet.
www.soa.org
The homepage of the Society of Actuaries. This extremely valuable site
includes a job board, networking contacts and actuarial exam study guides
and enrollment information.
www.casact.org
The homepage of the Casualty Actuarial Society. This site includes much of
the latest research for actuaries in the casualty and insurance fields. It, too,
includes a job board and networking information, and cross-links heavily
with the SOA site.
www.actuary.org
The American Academy of Actuaries. This group is involved in research and
best-practices for the industry, from pensions and insurance to expanding
fields of actuarial practice. It publishes Contingencies, a journal that keeps
actuaries up to date on the latest thinking in the field.
www.abcdboard.org
The Actuarial Board for Counseling and Discipline. This group serves as the
overseer of the Code of Actuarial Conduct and violations thereof.
www.aerf.org
The Actuarial Foundation. This not-for-profit group helps educate the public
as to what actuaries can do. They sponsor public outreach and educational
efforts, help conduct research into actuarial science and provide a variety of
scholarships.
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www.blackactuaries.org
The International Association of Black Actuaries. This group promotes
African-Americans in the actuarial field.
www.actuarialstandardsboard.org
The Actuarial Standards Board. This group gets into the minutiae of good
practices for actuaries.
www.aspa.org
The American Society of Pension Professionals and Actuaries. This is a
professional group for actuaries in the pension industry. It hosts conferences
and publishes the latest research into pension activities.
www.ccactuaries.org
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