Transcript Slide 1

Calculating the Opportunity in Risk:
The Actuarial Profession
PRESENTED TO
SPELMAN COLLEGE
March 27, 2009
Arthur R. Randolph, II, FCAS, MAAA
Lisamarie Lukas, Society of Actuaries
What is an Actuary?
2
Actually, Actuaries…
 Analyze, measure, convert and manage
financial risk into opportunity
 Use mathematical and statistical analytical
skills, financial theory, business knowledge
and an understanding of human behavior
 Develop and validate financial models to
guide decision making
 Are creative problem solvers who see the
“whole picture”
3
What is Risk?
 Old-School Webster Definition:
• Possibility of Loss
 New-School Actuarial Definition:
• Opportunity
4
The Actuarial Point of View
 Actuaries don’t merely speak to what
we can lose
• They focus on what we can gain
 Actuaries decide whether to avoid,
reduce, transfer or manage (exploit)
an enterprise’s risk
5
Traditional Opportunities




Property/Casualty Insurance
Health Insurance
Life Insurance
Pension/Retirement
6
New and Non-traditional Opportunities
 Financial services
 Other Opportunities
• Design landfill post-closure cost
management strategies
• Design environmental trade and
cap strategies
• Design catastrophe bonds
• Design alternative risk financing
vehicles
7
Where Do Actuaries Work?
 Insurance companies
 Consulting firms
 Government insurance
departments
 Colleges & universities
 Banks & investment firms
 Large corporations
 Public accounting firms
 Other
8
Enterprise Risk Management (ERM)
 There is a growing need
for organizations to link
their risks across their
business units and adopt a
more comprehensive
framework
 ERM is the process of risk
analysis and management
across an entire
organization
9
Why Become an Actuary?
U.S. Department of Labor
• Employment of actuaries expected to
increase by 24 percent
• Less sensitive to economic cycles
Financial Rewards
• $46,000 – 63,000– Entry-level actuaries
• Exponential salary growth: driven by
exams and credentials
Education Benefits
• Learn while you earn – Most employers
provide full educational financial support
while you pursue your credentials
10
Earning Potential: Average Salaries
Years of Experience
Note: Compensation may vary significantly according to specialty, years of experience, geographic region and
responsibilities. Source: D.W. Simpson & Company, Inc., September 2008Salary Survey
11
A Strong Career Outlook
A 2007 employer research study by the Society of Actuaries found:
• The profession is becoming more relevant
to the needs of larger companies
• Actuarial jobs are increasing
• High value of ERM
• Role of Chief Risk Officer opening up to
actuaries
12
How to Become an Actuary
 Actuaries come from a range of disciplines
including actuarial science, math, finance,
statistics and engineering
 Students should complete courses in
economics, applied statistics and
corporate finance, to meet pre-exam
requirements
 Other foundational coursework includes
probability, calculus and business
communications
13
What Employers Value
Actuarial
credentials
Critical business
skills
14
Resources for Students





www.BeAnActuary.org
www.CASAct.org
www.SOA.org
www.RiskisOpportunity.net
www.BlackActuaries.org
15
Questions?