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Actuaries: Risk Is Opportunity
Joint Mathematics Meeting 2011
Emily Kessler, FSA, EA, MAAA, FCA
Senior Staff Fellow
Society of Actuaries
Actuaries…
 Analyze, measure, convert and manage risk into
opportunity
 Use mathematical and statistical analytical skills,
financial theory, business knowledge and an
understanding of human behavior
 Develop and validate financial models to guide
decision making
 Are creative problem solvers who see the “whole
picture”
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Rigorous framework
 Actuarial science is
interdisciplinary
 Center: risk
 Methodology: math
models within
specific context
 Rigorous analysis
 Practical over
theoretical
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Shifting focus of actuarial science
 All about risk
• Old school: Possibility of loss
• New school: Risk/reward trade offs
 All about managing risk: to avoid, reduce,
transfer or manage (exploit) an enterprise’s risk
• Old school: segregated within specific mechanisms
(insurance, pensions)
• New school: any enterprise, anywhere, with the right
financial vehicle (moving beyond insurance)
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Opportunities For
Actuaries
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Traditional Opportunities
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Health Insurance
Life Insurance
Property/Casualty Insurance
Pension/Retirement
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New opportunities: Enterprise Risk
Management (ERM)
 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
 Mostly used (especially by actuaries) in
insurance, financial sector
• Moving into broader business
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Why become an actuary?
 Combines passion for math with business
• Wide variety of opportunities, careers and growth
 U.S. Department of Labor
• Actuarial employment expected to increase by 24% through 2016
• Less sensitive to economic cycles
 Financial rewards
• Entry level salaries of $46,000-65,000
 Education benefits
• Learn while you earn – Most employers provide full educational
financial support while you pursue your credentials
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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., October 2009 Salary Survey. Visit: www.DWSimpson.com/Salary for more information.
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A Strong Career Outlook
 The profession is becoming more relevant
to the needs of larger companies
 Actuarial jobs remain steady
 High value of enterprise risk management
(ERM)
 Role of Chief Risk Officer (CRO) opening
up to actuaries
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What Employers Value
CRITICAL
ACTUARIAL
BUSINESS
CREDENTIALS
SKILLS
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Academic Studies
 Actuaries come from a range of disciplines
including actuarial science, math, finance,
statistics and engineering
 Students should complete courses in probability,
calculus and business communications
 Other foundational coursework includes
economics, applied statistics and corporate
finance
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Advice for Actuarial Students
 Develop disciplined study habits
 Acquire a well-rounded curriculum
• Sharpen communication and business skills
 Take SOA/CAS actuarial exams while in
school
 Obtain an actuarial internship
 Find mentors
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Becoming an Actuary
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Credentials for practice
 Life/Health/Pension (Society of Actuaries)
• Associate of the Society of Actuaries (ASA)
• Fellow of the Society of Actuaries (FSA)
• Chartered Enterprise Risk Analyst (CERA)
 Property/Casualty (Casualty Actuarial Society)
• Associate of the Casualty Actuarial Society (ACAS)
• Fellow of the Casualty Actuarial Society (FCAS)
• Coming soon: CERA
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The Society of Actuaries (SOA)
 Serves actuaries in pension, life and health
• Largest professional, actuarial organization in the world
 22,000 members, 30,000 candidates
 Mission: actuaries as
leading professionals in
the measurement and
management of risk
• Education
• Research
• Advancing the profession
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The Casualty Actuarial Society (CAS)
 Serves actuaries in property & casualty disciplines
 Over 5,100 members
 Mission: Advancement of
the body of knowledge of
actuarial science applied
to property, casualty, and
similar risk exposures.
• Communicating with the
public
• Education
• Research
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ERM Professional Credential:
Chartered Enterprise Risk Analyst (CERA)
 Developed in response to nontraditional business needs
 CERAs model future events by
converting data that drives
strategic decisions with a 360degree view of an organization’s
risk profile
 To learn more about the CERA
credential, visit
www.CERAnalyst.org
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Benefits of a CERA Designation
 The most comprehensive and rigorous ERM
training available
 Enhance exposure to the C-suite
 Expands professional network by being a
member of the SOA
 Now a globally offered and recognized credential
– offered by the UK Actuarial Profession and the
Institute of Actuaries of Australia
 Others soon to follow
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ASA Designation
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ACAS Designation
Exam 1/P*
Exam 5
Exam 2/FM*
Exam 6
Exam 3F/MFE*
Online Course 1
Exam 3L
Online Course 2
CAS Course on
Professionalism
Exam 4/C*
VEE* (Economics, Corporate Finance, Applied Statistics)
*Shared with SOA
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FSA Designation
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FCAS Designation
Exam 7
ACAS +
Exam 8
Exam 9
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CERA Credential (SOA)
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CERA & FSA (SOA)
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Resources for students
 RiskIsOpportunity.net
 BeAnActuary.org
 ImageoftheActuary.org
 SOA.org
 CASACT.org
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Questions?
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Thank You!
SOA.org
RiskIsOpportunity.net