Actuarial systems in Japan, U.S., and Korea
and the latest initiatives of actuarial
societies
i ti iin th
those ththree countries
ti
Tsuneto Yamauchi
Advisor, Samsung Life
This presentation is intended solely for educational purposes and presents information of a generalnature. It is not intended to guide or determine any specific individual situation and persons should
consult qualified professionals before taking specific actions. Neither the presenter, nor thepresenter's' employer,lnor theh hosth organization off thish seminar shallh ll haveh
any responsibilityb l orliability to any person or entity with respect to damages alleged to have been caused directly or
indirectly by the content of this presentation.

Language
베트남은 아름다운 나라입니다
ベトナムは美しい国です

Vietnam is a beautiful country.

References
Fred E. Szabo
Actuaries’ Survival Guide
How to succeed in one of the most desirable
professions
2004 ELSEVIER Academic Press

THE ROLE OF THE ACTUARY 2013 June
By International Actuarial Society
2013 June
http://www.actuaries.org/LIBRARY/Papers/Role_Actuary_EN.pdf

About SOA

What is an Actuary?
An actuary is a business professional who analyzes the financial consequences of risk.
Actuaries use mathematics, statistics and financial theory to study uncertain future events,
especially those of concern to insurance and pension programs.
programs They evaluate the likelihoodof those events, design creative ways to reduce the likelihood and decrease the impact ofadverse events that actually do occur.
Actuaries are an important part of the management team of the companies that employ
them. Their work requires a combination of strong analytical skills, business knowledge andunderstanding of human behavior to design and manage programs that control risk.
SOA members work in life insurance, retirement systems, health benefit systems, financial
and investment managementgand other emerging
g g areas of ppractice. The majority
j y ofactuaries work within the insurance industry, although a growing number of actuaries workin other fields.

http://www.soa.org/about/about‐what‐is‐an‐actuary.aspx

About SOA

The Professional Life
Wh
Wherevertherehiis risk,i k therehare opportunities
i i fforactuaries. And the recent financial crisis has further
hi hli h d thehighlighted
h skills
kill actuaries
i bringb i to theh table.
blhttp://www youtube com/watch?feature=player embedded&v=rQop4TLj4WI
http://www.youtube.com/watch?feature=player_embedded&v=rQop4TLj4WIWhat is an Actuary
P f iProfessionallO
Optionsti• The word actuary comes from the Latin word actuarius, whichreferred to short
short‐hand
hand writers in the days when things liketypewriters and computers hadn't even been thought of.
• Today, actuaries work for insurance companies, consulting firms,
government departments
departments, financial institutions
institutions, and other agencies.
agencies• They provide crucial predictive data upon which major businessdecisions are based. True to their historical roots, actuaries still
use a rather extensive shorthand for many of the special
mathematical functions required for this work.
• Actuarial science is an exciting, always‐changing profession, basedon fields such as mathematics,
mathematics probability and statistics,
statistics economics,
economics
finance, law, and busi‐ness. Most actuaries require knowledge andunderstanding of all of these fields and more.
Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p1

What is an Actuary
P f iProfessionall Options
O ti
•

•
•
•

To ensure that this is really the case, all actuaries must pass special
examinations before being recognized as members of the profession. To
perform their duties effectively, actuaries must also keep abreast of
economic and social trends, as well as being up‐to‐date on legislation
governing areas such as finance, business, healthcare, and insurance.
N doubt
Nod bt you havehheard
h d aboutb t theth actuarial
t i l examinations
i ti
you needd totpass to become an Associate or Fellow of one of the actuarial societies.
The efforts required to succeed in these examinations are in many ways
analogous to those required to become a doctor,
doctor lawyer,
lawyer or other highranking professional.
So are the rewards. For several years now, the Jobs Rated Almanac has
considered an actuarial career to be one of the most desirable professions
in America.

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p1

Job rates almanac
The Best Jobs of 2013 ‐ Actuary #1• The job “actuary”
actuary has been rated as 2013’s
2013 s best job in the United States by
Careercast.com. Careercast.com ranked actuary as No. 1, biomedical engineer
at No. 2, and software engineer, the top job of 2012, at No.3.
• Careercast.com ranks careers based on dozens of factors, such as the degree of hazards personally faced, physical demands (crawling, stooping bending, etc.),
 income ggrowth p
potential,,
 employment outlook, competitiveness, travel and contact with the public.
p
The firm used data from the Bureau of Labor Statistics and other government
agencies to determine the rankings. As in prior years, the 200 jobs were selected
for their relevance in the current labor market as well as the availability of reliable
data.
Careercast.com‐ See more at: http://www.beanactuary.org/news/?fa=view&id=2218#sthash.LQAL7ab1.dpuf

Job rates almanac
The Best Jobs of 2013 ‐ Actuary #1
•
•
•
•
•
•
•
•
•
•
•

The Ten Best Jobs:
Actuary
Biomedical Engineer
Software Engineer
Audiologist
Fi
Financial
i l PlPlanner
Dental Hygienist
Occupationalp
TherapistpOptometrist
Physical Therapist
C
Computert SSystemst
A l t
AnalystCareercast.com‐ See more at: http://www.beanactuary.org/news/?fa=view&id=2218#sthash.LQAL7ab1.dpuf

What is an Actuary
Professional Options• Actuaries are experts in the assessment and management of risk.
Tradition‐ally, the risks managed by them have been insurance andpensioni fundingf di risks,i k although
lth
h the
th managementt off business
b i
risks
ik
is also among the responsibilities of insurance actuaries.
• So is the insurance of insurance, known as reinsurance. Moreover,many actuaries
t i are now alsol managing
i asset‐relatedt l t d risksi k iinmerchant banks and consulting firms.
• Actuaries are often chosen to be general managers in insurancecompanies.
i ThiThis iis b
because upper management anddbboardsd off
directors have a high regard for the knowledge and skills of
actuaries, and because the need of a company to maintain its
financial integrity makes an actuary's numerical skills invaluable
invaluable.

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p2

What is an Actuary
ActuarialAt i l TTerms, A
Acronyms, andd Definitions
D fi iti• You will quickly discover that actuarial science is full oftechnical terms,, acronymsy ((abbreviations),), and definitions.
• This session is not the place for explaining them in detail,because the definitions involved are readily available intextbooks and on the Internet
Internet.
• The main objective of this session is to introduce you to thecareer op‐portunitiesppthat exist in the actuarial world andto sketch for you the steps required to enter that world.
• Actuaries can be grouped in different ways. As theirfunctions change in res‐ponse to changes in the world
around us, the distinctions become less sharp. How‐ever,the categories of employment will give you an initial idea.
Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p2

What is an Actuary
Valuation Actuaries• Reserves are important to theh llong‐term financialfl healthh lhof a company.
• Because insurance companies are dealing with events thatare uncertain in time and amount, they must put aside
what they consider to be the most likely amount of money
they will need to pay future claims and expenses,
expenses and thenput aside a little more, just in case.
• The role of valuation actuaries is to determine theappropriate amount to be put aside and validate theexpected number of claims, which should be what was
taken into account when settingg the pricepof the insurance.
• Valuation actuaries also certify the reserves to government
agencies.
Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p2 ‐ 3

What is an Actuary
Pi i A
Pricing
Actuariest i• Pricing actuaries are responsible for determining how much money
a company
p y is likelyy to make on a p
product.
• A product can be life insurance, which pays an agreed‐upon sum toyour beneficiary when you die, an annuity, which pays an agreed‐upon
p sum everyy month as longg as you
y live,, or some form of healthinsurance, which covers the costs of medical care not paid for by agovernment plan, for example, dental and drug expenses.
• Pricingg actuaries use the same assumptionsp
as valuation actuaries
when calculating the price of insurance to guarantee consistency
and ensure that when valuation actuaries believe that they areadding a little extra to the reserves, they are really doing so.
• Pricing actuaries generally do not certify anything to anyone
outside of the company.
Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p3

What is an Actuary
Consulting Actuaries
•
•
•

•

Consulting actuaries spend a good deal of their time advising on defined
benefit pension plans.
These are trusts set up to fund tax‐assisted retirement benefits at a rate
spelled out in a legally certified document.
In the United States, senior consulting actuaries are usually members of theConference of Consulting Actuaries (CCA). To become a Member of the CCA,
candidates must have completed a minimum of 12 years of responsible
actuarial work, defined as "work that requires knowledge and skill in solving
actuarial problems."
They must also be a Fellow or Associate of the Society of Actuaries or the
Casualty Actuarial Society; or a Fellow of the Canadian Institute of Actuaries,
the Faculty of Actuaries, or the Institute of Actuaries; or be enrolled with the
Joint Board for the Enrollment of Actuaries (EA), thus having acquired the title
off Enrolled
ll d Actuary; or beb a Memberb off theh American Academydoff Actuaries,
the Asociacion Mexicana de Actuarios Consultores, the Asociacion Mexicanade Actuarios or the Colegio Nacional de Actuarios.

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p3 ‐ 4

What is an Actuary

Pension Actuaries
•

•

•
•
•

Pension actuaries look at all members of a p
pension pplan,, their ages
g and salaries,, and p
projectsjhow mucheach would receive at retirement on average, given that some will terminate before retirement, somewill get salary increases, and other such assumptions as to what might happen in the future. Then theylook at the assets the pension plan has invested and determine, based on these two analyses, how muchthe plan's sponsor (usually an employer) needs to contribute to the plan each year. The pension actuary
certifies that the contributions needed to fund the plan are adequate and qualify for a tax deduction forthe sponsor.
Pension laws and pension regulations are country‐specific. This is the one area in which the global
mobility of actuaries is somewhat restricted. Special examinations must be passed in the country of
employment to be a pension actuary. In the United States, pension actuaries must be Enrolled Actuaries
to be eligible to perform government‐related pension fund audits. Enrolled actuaries are also employedin the human resource departments of large companies.
Senior pension actuaries in the United States are usually also Fellows of the American Society of Pension
Actuaries (ASPA), a designation that is awarded only after successful completion of a series ofprofessional examinations.
examinations
The basic examinations are those required to become an Enrolled Actuary, together with three additional
ASPA examinations.
A Fellow of the Society of Pension Actuaries must also be a Fellow or Associate of one of the following
societies: the Society of Actuaries,
Actuaries the Casualty Actuarial Society,
Society the Canadian Institute of Actuaries,
Actuaries theFaculty of Actuaries, and the Institute of Actuaries, or be a Member of the American Academy ofActuaries, the Asociacion Mexicana de Actuarios Consultores, the Asociacion Mexicana de Actuarios, or
the Colegio Nacional de Actuarios. Although you will see later in this chapter that the actuarial
profession is glob‐ally mobile, pension actuaries in many countries must meet certain specific na‐tional
certification standards.
standards

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p4

What is an Actuary
Financial Actuaries
•
•
•

•
•

As the worlds of banking, insurance, and finance become more entwined, a new
breed of actuary is emerging, known as a financial actuary.
An advertisement for a senior financial actuary on the Internet describes one of
the novel roles of actuaries in business.
business
A company was looking for a senior financial actuary whose responsibilities
included developing, analyzing, and testing models of In‐ternet credit card
processing systems including product pricing, positioning, and consumer credit, inorder to minimize risk and improve return on investment.
You will communicate assumptions, results, and alternatives to staff and provide
guid‐ance in systems reengineering.
A suitable candidate was expected to have at least a Bachelor
Bachelor'ss degree in actuarial
science, finance, mathematics, or a related field and be an Associate Actuary. In
addition to appropriate experience, the candi‐date was expected to be an effective
communicator, and creative thinking skills were essential. The company waslooking for a self‐starter
self starter with a strong statistical background and proven expertisein modeling techniques. Moreover, knowledge of the financial and management
needs of an Internet real‐time credit card processing company was expected.

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p5

What is an Actuary
What Does It Take to Become an Actuary?
•
•
•
•
•

Skills needed include mathematical ability, knowledge of and comfort withcomputers and computer modeling systems, and the ability to communicatecomplex topics in terms that customers can understand.
Most actuarial positions require that you are at least an Associate of the Society ofActuaries, the Casualty Actuarial Society, the Canadian Institute of Actuaries, or
have equivalent standing in an actuarial society of another country.
If you are in a position that requires you to certify actuarial valuations and reports,
you must usually be a Fellow of these societies.
Many actuaries in the United States are also members of the American Aca‐demyof Actuaries (see Appendix D), the public policy, communications, andprofessionalism organization for all actuaries in the United States.
Actuaries in different countries belong to wide variety of national andinternational professional organizations that define and direct the future of theprofession. At the international level, the International Association of Actuaries
plays a central role in coordinating and advancing global actuarial interests
interests.

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p5

Benefit and Rewards

Benefit and Rewards

The author of the quoted book has inter‐viewed hundreds of students who have chosen to be actuaries. They allhhave
one thingthi ini common ‐ theyth allll lovelmathematics.
th
ti
H
Here
iis whath t some off ththem, andd some off ththeir
i employers,lhave given as reasons for their career choice.

Q Did you ever consider working in a non‐actuarial field of applied math‐ematics (such as engineering) and if so,

what tipped the scales in favor of an actuarial career?
T
Twenty‐fivet fi percentt off allll respondents
d t tto th
the survey said
id "N"No."" Th
There was no d
doubt
bt iin ththeir
i mindsi d ththatt allll ththey everwanted to be was an actuary. The rest had considered other careers. Here is what some of them had to say.
• Answer I am currently working in a non‐actuarial field where strong mathemat‐ical and financial skills are highly
persuaded me to leave the actuarial field were salaryy and opportunitypp
y at the toppvaluable. Elements that p
management level.
• Answer Yes. Communications and media. But I found that an actuarial career provides a more secure job, a great
work environment, a good reputation, excellent job opportunities, and diversification of tasks, especially at theentry level.
• Answer I considered studying engineering.
engineering I decided to follow an actuarial ca‐reerca reer instead because I didn't
didn t likesome subjects in engineering (chemistry) and because the business part of an actuary's job interested me.
• Answer I considered studying engineering. But I like the fact that being an actuary means that you need to acquire
knowledge not only in applied mathematics (the primary reason why we're all in this field), but also finance,
economics, taxes, politics, and all those things make an actuarial career so interesting.
• Answer I did consider many other fields, including engineering and medicine.
• Answer I initially was seriously considering going into pure and applied mathematics and even engineering, until I
stumbled upon actuarial science. It was the combination of the high‐level applied mathematics and business skills
required in this field that finally tipped the scales in favor of an actuarial career. The fact that actuarial science led
to a much more rounded career appealed to me immensely and really made all the difference.

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p6

Benefit and Rewards

Benefit and Rewards (continue)• Answer Not really‐I've been gunning for this since Grade 10. The workload of an engineering student
at university steered me away from that
that, and I didn't want to be a computer programmer for myentire life.
• Answer Yes. Statistics. But I felt a training in actuarial mathematics was broader and that it would
be easier to switch from actuarial mathematics to statistics than the other way around.
• AnswerA
Y I appliedYes.
li d tto engineering.
ii
I thenth chosehtto becomeban actuarytb
be‐cause
it is
i more off a big‐bipicture profession than engineering. To be an actuary you need to have a long‐term vision. You needto un‐derstand trends in the economy and be able to predict where the economy will be moving in
the future. The concepts and theories you learn in statistics train you to think critically, to analyze,
and to recognize patterns and trends.
trends Engineering is a more technical field and is not as conceptualas actu‐arial mathematics and statistics. I'm a big‐picture man, and I believe that in the actuarial
profession you get to see a lot more of the picture sooner. I assume that this training can also be
applied to other fields in the future. It is a way of thinking and goes beyond technical knowledge.
• Answer I haven
haven'tt so far, but II'dd like to keep my options open. The biggest stumbling block would beto realize how much effort I've put into the SOA exams to become qualified as an actuary and thenask myself, "Do I re‐ ally want to ditch everything I've done for my career, put more time into
studying something else, and take a 30% drop in salary?"• Answer I thought
g of beingg a teacher,, but decided I didn't have the ppatience for that and I was drawn
to a rotational‐program setting at an insurance company so that I could have the exam support andvariety of rotations. I would consider being an adjunct college professor or teaching an exam review
class.
• Answer Yes. But I decided to go in actuarial science because it was something less well‐known to me
and I found that to be a real challenge.
• Answer I did consider it, but the job market favored actuaries at the time.

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p6 ‐ 7

A Typical Day
A Typical Day
Let us take a look at a day in the life of an actuary. What are the typical tasks, and how does the day evolve? Obviously
the answers depend on the nature of the company and the seniority of the actuary.
actuary
Here is what several actuaries and actuarial students had to say about this in the survey:

Q Describe a typical day In the life of an actuary.
• A
Answer CorporateCt stuff.
t ff R
Reserve valuations.
l tiA
Assett andd liliability
bilit management.
t DynamicD
i capital
it l adequacydtesting.
t ti
Pricing.
Pi i• Answer Reading, replying and sending e‐mail, letters and phone‐mail. Keeping in touch with the daily activities of myclients and current economic de‐velopments. Talking many times a day with the consultants I work with to keep track of
the many projects going on and address issues if necessary. Producing reports of different kinds when a consultant has
to meet with a client,, dependingp
g on the client's needs and what the consultant wants to show them. Calculatingg
performance figures from the different managers investing money for a client's fund, reviewing their historicalperformance and comparing it with a universe of funds and benchmarks. Following up on previous reports prepared forclients that need to be updated for the coming quarter. Verifying trust statements at the end of the month to makesure there are no discrepancies with the manager's data. Carrying out all kinds of calculations that are required by the
consultants in their work with clients. Lots of teamwork.
• Answer In the pension consulting industry, a typical day includes many phone calls with clients on subjects as varied
as plan funding and investments, tax legislation, particular situation of given plan participants, union nego‐tiations,benefit improvement, accounting treatment of pension plan, etc. Also, peer review of actuarial valuation results,
planning and management of projects, business development, formal or informal training, internal or client meetings. It's
rarelyl nine‐to‐five.
i t fi• Answer A normal day in the life of an actuary at my level involves a lot of work with computers. Checking data, using
programs to calculate liabilities for pension funds, personal calculations, all that can be done in a normal day. It is also not
unusual to have training sessions on hot issues or new tools.
mail and voice
voice‐mailmail messages
messages. In the morning
morning, I tend to work on projects• Answer I get to the office and check the ee‐mailuntil lunchtime and to contact my clients when problems arise. In the afternoon, I often have meetings with teams orclients, and I then keep on working on specific projects with dif‐ferent people.

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p6 ‐ 7

A Typical Day (continue)

A Typical Day• Answer Consulting in group health insurance: technical work on actuarial valuation of post‐retirement benefits. Core consulting:renewals, review of fi‐nancial reports, benefits redesign, analysis of insurer's quotations on group insurance benefits. Generaladvice to clients about current issues on group insurance benefits: phone calls,
calls client meetings.
meetings• Answer For an actuarial intern, there is no such thing as a typical day. The tasks vary by intern and company but usually startwith daily routine johs such as updating data, checking the results of jobs run the previous day, and meeting with your supervisor.
The remainder of the day is spent working on one or possibly several projects you've been assigned. Having junior status, anintern may work for more than one actuary and is often asked to run illustrations, compute premiums, search for data, makegraphs, etc.
• Answer There aren't too many typical days. Every day has some new wrinkle or challenge. 'Things that are done pretty much
every day are working with spreadsheets to perform actuarial calculations, checking the reasonableness of the results of calculations(Are results reasonably consistent with your prior expectation of what the results should be?), communicating with both actuarial
and non‐actuarial co‐workers in person, by phone, or by e‐mail. And during exam season, studying for exams if you're still taking
them.
• Answer Here is an account of a typical day at the office.
office It
It'ss basically a 10‐hour day: 8:00
Walk to the office.
 8:30Arrive at the office; read e‐mail and news
 9:00
Finalize calculations for the report to client ABC; give directives to assistant 10:30 Preparation for meeting with client A at 1 p.m.
 12:00
12 00 Lunch
L h withi h investmentimanager off firmfi
 13:00 Meeting with client A: presentation of the report sub‐mitted three days ago, discussions of the next steps andanswer questions and recommendations.
 14:30 Prepare memo to client A following meeting concerning issues raised 15:00 Debriefing with manager for client.
 15:15 Consult voice‐mail and e‐mail.
 15:30 Peer review report for client B.
 16:30 Help junior analyst with calculation program for client C.
 17:00 Contact Trust D for trust statement figures as of mm.dd.yyyy
 17:05 Search for client E: Investment manager
g for an equity
q y mandate.
 17:55 Time entry for the day.
 18:00 Go home (and study for actuarial exams!!!).

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p6 ‐ 7

A Typical Day
A Typical Day (continue)• Answer Internship in a pension consulting firm: every day is different. Dif‐ferent projects and obstacles to overcome. Challenging.
It's hard to adjust between school und work routines. When beginning an internship, I often find myself very restless because I am
not used to sitting in one place for long. At school, I never sit in one place for more than an hour.
• Answer I arrive at the office at 7:30a.m. I am usually the first one there, and I enjoy the quiet time to go through my e‐mail.. do somedeep thinking, and plan the day's work. I am in the corporate actuarial department. We set val‐uation policy for the company or, moreaccurately, develop our company's interpretation of the valuation standards set by regulators and the Canadian Institute of Actuaries. I
am currently working on standards for applying the new Consolidated Standards of Practice to our valuation.
valuation
 E‐mail. The first thing I do in the morning is to read my e‐mail. I send an immediate response where I can, delete any notes
where no further action is needed, store notes that form part of a discussion thread, and print anything that I need to spend
more time on during the day.
 Calendar. Next,, I check myy calendar to see what meetings
g I have sched‐uled. Meetings
g can be a veryy significant
g
portion of apworking day, and if I have a memo or some other piece of work due that day, I need to do some short‐term planning on how
the work will get done on time. At this point I decide what I will actually do during the day. This will include meetings, projectwork, occasionally production work, and research.
Project work is a catchall phrase for deliverables that take longer than a day. This could include developing standards forvaluation,l tii l
implementing
ti a new computert valuationl ti system,tcollecting
ll ti andd coordinating
di ti datad t ffrom diffdifferentt business
b i
units
it in
i
support of a corporate decision. There always are one or two projects on the go that can absorb any available time in aworking day not taken up by short‐term requirements.
Production work is usually tied to a particular time of the month or year, and relates to reporting requirements of one kindor another. Myy p
produc‐tion work is to examine and analyze
y the source of earnings
g reportingpg for the company.
p y Researchmeans reading some of the CIA or OSFI (Canadian Office of Superintendent of Financial Services) papers that have been pre‐pared for our education. Most of this is directly relevant to my current job since my department interprets these papers forthe company.
 The Rest. The rest of the day is spent doing the work I have planned. My door is open, and the plans I have laid out are easilyd il d if somethingderailed
thi comes up with
ith a higher
hi h priority,
i it suchh as a questionti fromf
upper managementt

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p10

A Typical Day
A Typical Day (continue)•••

Answer This greatly depends on the level of responsibility held by the actu‐ary,actu‐ary the size of the organization inwhich the actuary works, and the type of company: life versus PIC [Property and casualty], consultant versus in‐surer, and so on.
The answer also depends on the period in question. For example, year‐ end will keep corporate actuaries very
busy, while no overtime may be re‐quired the rest of the year. In any event, a day in the life of this actuary(meaning me) goes something like this. Bear in mind the following back‐back ground information: I currently work for asmall PIC reinsurance company (five employees), with both actuarial and underwriting responsibilities.
 Rating. Most of the day I work with Microsoft Excel. My work involves rating (calculating reinsurance
premiums), production of reports, or cor‐porate functions such as calculating IBNR [incurred but notreported] loss reserves, doing DCAT [dynamic capital adequacy testing] work, and ana‐lyzing quarterly
financial information. Knowledge
g of Microsoft Word and Microsoft Access is also required,q, since we often
write memos and reports and all our data is stored in Access.
 Lunch. Lunch is usually spent at my desk, reading e‐mail, newspapers or trade magazines, in order to stayabreast of current events in the world and in the insurance industry in general. From time to time, I may goout for a lunch meeting with a client or broker. Some travel is required from time to time.
 The Day. A typical day will see me coming in the office at 8:15a.m. and leaving at 5:45p.m.
Answer The day in the life of an actuary depends on a variety of circumstances: insurance versus consulting, life
versus PIC, big company versus small, tra‐ditional role versus non‐traditional role, and especially the line ofbusiness the actuary is involved with‐and even that can vary from day‐to‐day!
Actuaries I have met have handled pricing, reporting, risk management, reinsurance, and corporate and industry
issues. Some are in non
non‐actuarial
actuarial roles like underwriting and senior leadership positions. Some work ongroup benefits (long‐term disability, short‐term disability, life, accidental death and dismembership), some workon annuity products (fixed and vari‐ able), some work on life products (term, variable universal life insurance,
universal life insurance), some work in investments, etc.
I don't think that there is just one way to describe an actuary's day!

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p11

Typical Responsibilities
Typical Responsibilities
How do beginning actuaries spend their time at work, and how do these activities change as an actuary's career advances?

Q What
Wh t are some off theth ttypicali l actuarial
t i l projects
j t on whichhi h you hhave worked,
k d andd whath t specificifi kknowledgel dand skills were required? Please give some illustrative examples.
•
Answer Union negotiations: they require strong analytical skills, a talent for multitasking, and the ability towork well under pressure.
Answer Basic actuarial valuation: calculating the plan'splan s liabilities from the data of the participants of the•plan. Basic actuarial projects require rigor, method‐ology and planning. Preparation of accounting
disclosure and calculation of pension expenses: knowledge of accounting rules and their application.
•
Answer I've worked on annual statements. A good knowledge of Microsoft Ex‐cel and pension plans was
required. Being methodical and having good organizational and language skills are important. I've also
worked on actu‐arial evaluations.
evaluations The same skills and knowledge as for the statements were neededneeded, plus
a good knowledge of valuation software, as well as familiarity with the law and the valuation process (gainand loss, reconciliation, etc.).
•
Answer Typical projects that I have been involved with included:
 Valuations. Actuarial valuations: determination of the present value of annuity benefits taking into
consideration demographic factors (mortality, ter‐mination, retirement, etc.).
 Reports. Financial reports: understanding how balance sheets work, statistical knowledge, analyticalskills, credibility notions, software skills (For‐tran, Microsoft Excel).
 Computing. Software skills are crucial in the actuarial field. A good grasp of Excel, AXIS, Microsoft
Visual Basic for Applications
Applications, and even APL are a great advantage and are widely used in the field.
field
The main project I worked on consisted of reviewing and updating a com‐putation made in thevaluation system of an insurance company. My work was very specific and involved many calculations,running illustrations, and analyzing results.
 Products. I also needed to have a good knowledge of the various products sold and their specificdetails. For example, iff my results seemed irregular, my firstfinstinct was to look up the product I was
examining for distinct features such as product design or recent re‐pricing.

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p6 ‐ 7

Typical Responsibilities
Typical Responsibilities (continue)
•

•

•

•

Answer Typical projects that I have been involved with included:
 Reserves. Calculating reserves: needed knowledge of actuarial mathemat‐ics (life contingencies,
theory of interest) and general structure of reserves, as well as computer software. Knowledge ofprofessional standards of practice is also needed.
 Balances. Calculating fund balances for retirement and investment prod‐ucts: actuarial knowledge
off ththe theoryth
off iinteresttt andd computert softwareft
were essential.
ti l K
Knowledgel d off llegislationi l tiregulatingl tisuch products is also needed.
 Design. Design of insurance and investment products: Knowledge of the different mechanisms of
insurance products, knowledge of different invest‐ment products, rules and regulations regarding
those products, computer software, communications skills when working with others were essential.
Answer Typical projects that I have been involved with include actuarial valu‐ations of pension plan
liabilities; costing of plan benefit changes; pension expenses.
The skills required for these projects were basic technical skills: math‐ematical, actuarial and accounting
rules, knowledge of internal valuation software, and knowledge of laws affecting pension plans.
I have also written reports to clients: lettersletters, actuarial valuation reports,
reports investment manager monitoring
reports, etc.
The skills required for this type of work are the ability to translate com‐plex issues into understandable
words, writing skills, and communication skills.
ypp
projectsjthat I have been involved with include the productionpof reports,p, writing,g, graphing,g p g,
Answer Typicalediting charts; project management (requires good planning); communication with consultants (requires
knowledge of the clients I work with, knowledge of Word, PowerPoint, and Excel); re‐ turns calculations:requires knowledge of the database, and basic financial mathematics.
Answer Reserve valuations, year‐end and quarterly pricing, new products, mod‐ification of current
products DCAT [dynamic capital adequacy testing],
products,
testing] business projections for the next five years,
years
performed once a year, and MCCSR [minimum continuing capital and surplus requirements] calcula‐tions.

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p14

Typical Responsibilities
Typical Responsibilities (continue)••

Answer Most are in line with post‐retirement benefit valuations. Specific knowl‐edge
required: applying discount and mortality data to benefits scheduled for a future date.
Answer Typical projects that I have been involved with included:
 Valuations. Pension plan valuations. They are needed to ensure that the retirement
benefits promised to employees by their employers are available for their retirement
life. A valuation calculates the value of those retirement benefit promises (pension
liabilities) and compares them to the assets invested.
invested A fully funded pension plan is aplan that currently has a level of assets sufficient to cover its pension liabilities.
Skills required: actuarial background to calculate the required values; programmingskills to understand/program/run/p g/
the systemyon which the li‐ abilities are calculated;;
analytical skills to check, compare and compile results; up‐to‐date knowledge on
current market and economic issues used to set and understand the assumptions used in
the valuation.
 Benefits. Administering the benefits of expatriates working in various countries.
Expatriates add another layer of complexity in benefits valuation since coordination isrequired between the host and home countries, as well as potential social security
benefits earned in various countries.

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p14

Typical Responsibilities
Typical Responsibilities (continue)•

Answer Typical projects that I have been involved with included:
 DCAT. A lot of work has been done recently on DCAT [dynamic capital adequacy testing].
Essentially, this is a financial model that projects the future financial condition of acompany. The
h modeld l can beb deterministicdi i i or stochastic
h i ini nature. In my lastl three
h
jobs,
j b I
have been involved to various degrees with this.
This type of project requires good understanding of accounting concepts (projectionof balance sheet and investment income),
income) investment concepts (calculation of market
and book value of investments under various economic scenarios), financial concepts(calculation of corporate income tax), and statistical concepts (calculation of various
probability scenarios). Developing appropriate business knowledge through finance,
economics, investment and management courses can never be stressed enough.
 Computing. Other projects that I have been involved with usually only re‐ quire a goodunderstanding of actuarial concepts, acquired through coach‐ing and through thee amination process.
examination
process EExpertise
pertise with
ith EExcel
cel is al
alwaysa s a must.
m st So are other compcomputingtingskills: Microsoft Visual Basic and SAS being the most common ones.

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p14

Typical Responsibilities
Typical Responsibilities (continue)•••

Answer Typicalyppprojectsjthat I have been involved with included:
 Annuities. I've worked on developing new annuity products and riders (i.e., product management:
seeing an idea develop into a real product that is sold to contract holders). Within that process, I
have worked with all business areas (compliance, legal, marketing, systems, etc.) to get an idea into aworking product.
 Ratemaking. Other projects included setting the credited rates for our vari‐ous fixed and variableannuity products.
 Profitability. I have worked with in‐house actuarial software to examine profitability.
 Verifications.
f
I have verified client illustrations to verifyy that what is beingg shown to a client for anannuity product's subaccount growth and death benefit calculations is accurate.
 Reviews. I have also done product reviews of our existing products to validate the pricing.
 Economic Value. I've worked on economic value‐determining which ar‐eas of the company arecontributingg what value to our theoretical stock p
price.
 Reinsurance. I also worked in reinsurance where I dealt with reinsurance intermediaries and brokers
to renew contracts. This also involved assessing the risk within our existing contracts.
Answer Renewal analysis (group insurance); financial statement analysis (group insurance); reserves
analysis;ypost‐retirementpbenefit valuation; reportp writ‐ ing;
g various types
yp of research; preparationp pofbenefit statements; policies and booklets verification.
Knowledge and skills: Computer knowledge (programming, Microsoft Word and Excel), communication
skills (in French and English), writing skills, planning ability.
Answer Actuarial valuations ((knowledge:g methods for valuingg liabilities);) ac‐ countingg pprocedures(knowledge: basic accounting); calculations (knowl‐edge: laws and regulations, ability to draft reports,
good reading comprehension); plan design (knowledge: industry trends).

Quoted from “Actuaries’ survival Guide” p16

Typical Responsibilities
Typical Responsibilities (continue)•••

Answer Most are in line with post‐retirement benefit valuations. Specific knowl‐edge required: applying discount andmortality
t lit datad t tot benefitsbfit scheduledh d l d forf a future
f t
date.
d t
Answer Typical projects that I have been involved with included:
 Valuations. Pension plan valuations. They are needed to ensure that the retirement benefits promised to employeesby their employers are available for their retirement life. A valuation calculates the value of those retirement benefit
promises (pension liabilities) and compares them to the assets invested. A fully funded pension plan is a plan thatcurrently has a level of assets sufficient to cover its pension liabilities.
liabilities
Skills required: actuarial background to calculate the required values; programming skills to understand/program/run
the system on which the li‐ abilities are calculated; analytical skills to check, compare and compile results; up‐to‐date knowledge on current market and economic issues used to set and understand the assumptions used in thevaluation.
 Benefits.
f Administeringg the benefits of expatriatespworkingg in various countries. Expatriatesp
add another layer
y ofcomplexity in benefits valuation since coordination is required between the host and home countries, as well as
potential social security benefits earned in various countries.
Answer Typical projects that I have been involved with included:
 DCAT. A lot of work has been done recently on DCAT [dynamic capital adequacy testing]. Essentially, this is a financial
model that projects the future financial condition of a company. The model can be deterministic or stochastic innature.
t
IIn my lastl t threethj b I have
jobs,
h
been
b
involved
i l d tot various
iddegrees with
ith this.
thiThis type of project requires good understanding of accounting concepts (projection of balance sheet andinvestment income), investment concepts (calculation of market and book value of investments under various
economic scenarios), financial concepts (calculation of corporate income tax), and statistical concepts (calculationof various probability scenarios). Developing appropriate business knowledge through finance, economics, investment
and managementgcourses can never be stressed enough.
g Computing. Other projects that I have been involved with usually only re‐ quire a good understanding of actuarialconcepts, acquired through coach‐ing and through the examination process. Expertise with Excel is always a must. So
are other computing skills: Microsoft Visual Basic and SAS being the most common ones.

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p14

Typical Responsibilities
Typical Responsibilities (continue)•••

Answer Most are in line with post‐retirement benefit valuations. Specific knowl‐edge required: applying discount andmortality
t lit datad t tot benefitsbfit scheduledh d l d forf a future
f t
date.
d t
Answer Typical projects that I have been involved with included:
 Valuations. Pension plan valuations. They are needed to ensure that the retirement benefits promised to employeesby their employers are available for their retirement life. A valuation calculates the value of those retirement benefit
promises (pension liabilities) and compares them to the assets invested. A fully funded pension plan is a plan thatcurrently has a level of assets sufficient to cover its pension liabilities.
liabilities
Skills required: actuarial background to calculate the required values; programming skills to understand/program/run
the system on which the li‐ abilities are calculated; analytical skills to check, compare and compile results; up‐to‐date knowledge on current market and economic issues used to set and understand the assumptions used in thevaluation.
 Benefits.
f Administeringg the benefits of expatriatespworkingg in various countries. Expatriatesp
add another layer
y ofcomplexity in benefits valuation since coordination is required between the host and home countries, as well as
potential social security benefits earned in various countries.
Answer Typical projects that I have been involved with included:
 DCAT. A lot of work has been done recently on DCAT [dynamic capital adequacy testing]. Essentially, this is a financial
model that projects the future financial condition of a company. The model can be deterministic or stochastic innature.
t
IIn my lastl t threethj b I have
jobs,
h
been
b
involved
i l d tot various
iddegrees with
ith this.
thiThis type of project requires good understanding of accounting concepts (projection of balance sheet andinvestment income), investment concepts (calculation of market and book value of investments under various
economic scenarios), financial concepts (calculation of corporate income tax), and statistical concepts (calculationof various probability scenarios). Developing appropriate business knowledge through finance, economics, investment
and managementgcourses can never be stressed enough.
g Computing. Other projects that I have been involved with usually only re‐ quire a good understanding of actuarialconcepts, acquired through coach‐ing and through the examination process. Expertise with Excel is always a must. So
are other computing skills: Microsoft Visual Basic and SAS being the most common ones.

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p14

Typical Responsibilities
Typical Responsibilities (continue)•••

Answer Cash flow testing, economic value benchmarking, product development and pricing. Helpful
courses: Life
Lif contingencies,tiitheoryth
off iinterest,tt knowl‐edgekl d off fixed
fi d iincome securities.
iti
Answer An actuarial background is not a prerequisite to work in the asset con‐sulting services group.
Some of my colleagues have a finance background. In fact, the projects I work on are not purely actuarial
projects.
Answer Typical projects that I have been involved with included the following: Assets. How should the assets of a pension plan be invested? These projects are mostly worked on byactuarial people. They require a knowledge of both the liability and assets sides of a pension plan:
demographics, financial results, investment markets, etc.
 Investment. Review the pension plan (statement of investment policy and procedures).
 Management. How to implement an investment policy, how many investment managers to assign toeach asset class, what kind of investment man‐ agers to select (large/midsize/small capitalization,
value/growth/core in‐ vestment style).
 Personnel. Selection of investment managers for each asset class (Canadian equities, US equities,
international or foreign equities, fixed income, etc.). A management structure and the manager
selection require a good knowl‐edge of the institutional investment market; you need to know theplayers, their investment process and style, and so on.
 Monitoring. Monitor the investment performance of each manager. It re‐quires a good knowledgeof their style as well as how the markets are per‐ forming in order to really understand their numbers
and be able to explain their performance to clients.
clients You need to know the team players in order tomonitor any changes and turnover of people.
 Mandates. Put in place the appropriate paper documents between the pen‐sion plan and theinvestment managers.
 Records. Defined contribution record keeper selection.
 Options. Defined contribution investment options selection.

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p18

Progressiongof Responsibilities
p
Progression of Responsibilities
Q What are typical SOA and CAS career paths and where should suc‐cessfulactuaries or actuarial students be at age 20, 25, 30, 35, 40, 45 in (a) SOA, (b) CAS?
• Answer At 20: at school. At 25: junior consultant. At 30: pre‐senior
pre senior consul
consul‐tant.
tant. At
35: senior consultant. At 40: advanced senior consultant. At 45: responsible formajor clients, line of business, direction, etc.
• Answer I don 'tt think there is such a thing as a typical career path.
path For SOA,
SOA
ac‐tuaries should have a firm client relationship with clients by the time they're 30.
At 45, they should be established as client managers, responsible for high‐level
work and the relationship with clients.
• Answer At 25: SOA graduate with the first three or four exams. Then continue towrite exams while working and finish before 30. At that age, actuaries should befamiliar with the technical concepts and begin to be relatively autonomous inestablishing what needs to be done on different projects. At 30, they should be able
to review the work of junior students and have their own clients. At 35, they should
be senior consultants.
Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p23 ‐ 24

Progressiongof Responsibilities
p
Progression of Responsibilities
Q Whath are typicali l SOA andd CAS career paths
h andd wherehshouldh ld suc‐cessful
f l actuaries
i or
actuarial students be at age 20, 25, 30, 35, 40, 45 in (a) SOA, (b) CAS?
• Answer At 20: finishing an undergraduate degree in statistics or actuarial sciences and have atleast written the exam.
exam At 25: be at about Courses 4 or 5
5, and have spent one or two years as
an actuarial assistant. At 30: have com‐pleted all courses and have gathered five to eight yearsof experience in one or more companies and hold an Assistant Manager's position. At 35: man‐ager or director. At 40: permanent senior position, secure and confident in the position they
are holding.
• Answer In my opinion, this should be stated in terms of duration from when the first exam is
attempted, rather than by age. People get into the field at different ages and different places;
th h
they
have diffdifferentt average ages upon graduationd ti fromfcollege.
llTh
Thus, it is
i nott uncommon forfsomeone to get their FSA prior to age 25 in the United States, whereas it is less common in
Ontario because Ontario students graduate from university when they are between 23 and 24,
instead of 21 or 22. I have met p
peoplep who didn't start takingg exams until their 30s because
they switched careers. Most students should get their Fellowship about 8 to 10 years after they
started taking exams. The average age of new FSAs is usually in the rnid‐30s, although the SOA
wants to reduce the exam travel‐time and, indirectly, the average age of new FSAs. They wantt dotod this,thi butb t I doubt
d bt it will
ill happen.
hQuoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p23 ‐ 24

Progressiongof Responsibilities
p
Progression of Responsibilities (continue)• Answer I will cover only the SOA exams. At 20: start the exams if you want to be an actuary. At 25, you should havecompletedl dC
Courses I throughhh 4. During
i the
h fi
first few
f years off your actuarial
i l career, you willill b
be a ju‐nior
j i actuarial
i l
analyst. At 30, you should at least be an ASA. You will be a senior actuarial analyst or junior consultant. At 35, you
should be an FSA or have decided whether you want to continue writing exams. Life consists of more than SOA
exams!!! You should be an intermediate consultant. At 40, you should be a senior consultant.
• Answer I would like to have finished all of myy SOA exams byy the age
g of 24. After a three‐yearyuniversityy program,p g,asolid goal is to have passed four exams.
• Answer At 20, you should be in university and have started the first two or three exams. At 25, you should ideallyhave finished your exams and should be waiting for the completion of your PD [professional development]
require‐ment credits. At 30, you should have two or three persons to whom you delegate work and start helping
them build their knowledge.
knowledge At 35.
35 you should focus on networking and meeting people,
people start bringing clients toyour consulting firm and maintain relationships with existing clients. At 40, you should probably be at the peak ofyour responsibilities.
• Answer At 20: actuarial student. At 25: senior actuarial student. At 30: FSA. At 35: Associate Actuary. At 40:
Assistant Vice‐President. At 45: Assistant Vice‐President or Vice‐President.
• Answer
A
F
From
the
th SOA pointi t off view:i
At 20:
20 in
i university.
iit At 25:
25 startingt ti out,t passingi exams, gaining
i i experienceiatt
an actuarial firm, deciding on insurance versus consulting, SOA versus CAS, is or is close to being an ASA. At 30: is
or is close to being an FSA, settling into the actuarial field with preference for insurance or consulting, SOA or CAS.
At 35: twelve or more years of experience. Consultant level with expertise in a preferred field. Providing valuableadvice to clients on a wide range of client issues, and a good source of intellectual capital for peers.
• Answer In my answer, I will focus on a CAS career. At 20: nice to have passed at least one exam. At 25: two yearsof experience and at least four exams. At 27: five exams. Very good candidates will have access to a managerial
position. At 30: will probably be a Fellow by this age‐if not, no problem, but focus on finishing the exams. At 30 to
35: outstanding candidates will have access to senior management positions. Over the first ten to fifteen years ofan actuary's career, it is not uncommon for a person to have worked for several employers.
• Answer I will describe a typical SOA path. At 20: junior staff in consulting firms or insurance companies. At 25:
almost a consultant. At 30 and above: senior consultant for clients and relationship manager.

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p23 ‐ 24

Progressiongof Responsibilities
p
Progression of Responsibilities (continue)••

Answer I will answer this question from the CAS perspective.
 Student. Typically, at 20, you will still be in university. You will hopefully get some summer work experience,
if not working for an insurance company,
company at least getting some exposure to the office world
world. You should beplan‐ning to write a few actuarial exams while in university to show prospective employers your willingness
to write exams, and your capacity for writing them successfully.
 Intermediate. At 25, you should be making the transition from entry‐level to intermediate actuary. You
should have written several exams by now, including basic ratemaking and reserving (although notnecessarily passing them),them) which will prove invaluable in the new responsibilities being handed to you.
you
 Associate. At 30, you should be an Associate, even a Fellow if you are one of the more gifted. This is thepoint in your actuarial career where you are handed management responsibilities. Although everyone wants
to be a manager, very few understand what is involved. If working for a good company, the actuary will havebeen sent to some form of management and other business‐training seminar. But the very motivatedindividuals will not relyy on the company,
p y, and will read up
p on these subjects
jat home.
 Vice‐President. At 35, most CAS Fellows are Vice‐President or its equivalent such as partner in a consulting
firm (at least, in Canada). Responsi‐bilities start shifting from the pure actuarial areas to the areas ofcompany management and client management.
 Career Peak. At 40 and 45, your level of responsibilities will slowly in‐crease, but essentially, things willremain the same until retirement.
Answer I cannot respond with respect to the CAS, so the answers below are with respect to the SOA.
 College. At 20: taking college courses towards a mathematics degree or actuarial degree. Investigatinginternship opportunities. Planning to take one or two exams before graduation.
 Work. At 25: working at a company with one to three years of experience. Have passed two or more exams.
 AlmostAl
FSA AtFSA.
A 30
30: working
ki ffor a company withi h 5 to 8 years experience.
iBe
B closelto attaining
i i FSA if notalready an FSA.
 FSA. At 35: have the FSA designation, have 10 to 13 years of experience, have a staff working for you, have amore prominent position and be out of the "rotational" student program. Know your specific area ofinterest or track the one you want to pursue in depth.
 Leadership. At 40 to 45: have a significant leadership role within the com‐pany and a staff working with you.
Be accessible to newer students in the program who want advice.

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p26

Progressiongof Responsibilities
p
Progression of Responsibilities (continue)
•

•
•

•

Answer In my answer, I will focus on a CAS career. At 20: nice to have passed at least one exam. At 25: two yearsof experience and at least four exams. At 27: five exams. Very good candidates will have access to a managerial
position. At 30: will probably be a Fellow by this age‐if not, no problem, but focus on finishing the exams. At 30 to
35: outstanding candidates will have access to senior management positions. Over the first ten to fifteen yearsof an actuary's career, it is not uncommon for a person to have worked for several employers.
Answer I will describe a typical SOA path. At 20: junior staff in consulting firms or insurance companies. At 25:
almost a consultant. At 30 and above: senior consultant for clients and relationship manager.
Answer Here is a typical CAS career path: School. At 20, students are still in school, completing their Bachelor's de‐gree (or Master's degree, eventhough it is not required in the actuarial field). While in school, students generally start taking actuarial
exams. A successful student should have passed the first two exams before gradua‐ion and should have had
at least two internships related to the actuarial profession or insurance industry.
 Analyst. At 25, students should have a year or two of experience and be well established as an actuarial
analyst. At that point, a successful student would have passed 5 or 6 actuarial exams.
 Almost Fellow. At 30, actuaries have typically been exposed to various aspects of the actuarial profession
and have expanded their experience to pricing and reserving different lines of insurance. They also haveanalysts reporting to them and should be close to obtaining their Fellowship (if not done already).
 Vice‐President. By 35, actuaries should definitely have their Fellowship and be in a management position(either as a senior consultant in a consult‐ing firm or a Vice‐President, or Assistant Vice‐President, in an
insurance company).
 Partner. At 40, a successful actuary would be a partner in a consulting firm or an officer in an insurancecompany.
p y
 Retired. At 45, a very successful actuary would retire.
Answer At 20: in university. At 25: actuarial student, 35 hours per week on the job and 40 hours per week
studying. At 30: new Fellow, supervisor or manager of a few actuarial students and clerks, or a highly technicalposition without direct reports. At 35 and above: continually increasing responsibility, demonstrated by increased
staff and budget
g or requiredqtechnical knowledge.
g

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p26 ‐ 27

Skills
Mathematical Skills
Q What general mathematical competencies are required by an actuary? Give some examples andrelate them to the SOA or CAS examinations
examinations.
• Answer Problem‐solving, but this has nothing to do with any university course or actuarial exam.
• Answer Calculus is needed for the first actuarial exam. Financial mathematics is very useful in the
day‐to‐day work as well as for the exams (tested on more than one exam). The whole of actuarial
theory is based on statistics, so it is, of course, a required competency.
• Answer For the first exam, you need a lot of basic probability and calculus com‐petency. The
second exam is more about financial mathematics, macro‐ and microeconomics, and finance. The
general mathematical competencies re‐quired for this exam are mostly integrals and derivatives.
After that, you will always be using a variety of mathematical competencies (again basic
probability, integrals and derivatives), but they will become more specific.
• Answer Course 1 deals with basic probability and calculus competencies. An ability to deal withthem and apply them to actuarial problems is crucial. In general, a deep understanding andcompetency in probability and statis‐tics is essential to passing SOA and CAS examinations since
they are the foundation of actuarial mathematics. A strong background in statistics is necessary.
• Answer Knowledge of probabilities and statistical distributions, life contingen‐cies, theory ofinterest,, calculus,, ggeometric series. The calculus is often tested via continuous distributionfunctions where integration of a func‐tion is required (Course 1). Probabilities of people living anddying are combined with geometric series to create the mathematics of insurance and annuities(Course 3). The theory of interest is used for the principles of interest discounting andaccumulation (Course 2).
• Answer Theory of interest, life contingencies.

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p26 ‐ 27

Skills
Mathematical Skills (continue)• Answer Theory of interest is a must (time value of money). Probabilities are also very important.
• Answer Well,
Well everything that
that'ss mathematical in the exam syllabus
syllabus. Plain and simple!
• Answer Competency in calculus, statistics, algebra, probability is essential, es‐pecially for the earlyexams.
• Answer Actuarial mathematics such as life expectancies, survival models and projections, annuity
factors‐regression
factors
regression analysis
analysis‐‐e.g.,
e.g., calculating trends, building models, etc.
Calculus: background used in most programs and models.
Statistics: always needed to calculate averages, medians, quartiles, etc.
• Answer This is a difficult question. The answer also depends on the level of so‐phistication reachedin the various companies.
companies PIC companies in Canada are small and not a lot of complex mathematicalmodels are built. I know of one or two companies working on that front, and they have hired aperson with a Master's degree in statistics to do the work. However, these peo‐ple are supervised byactuaries. Advance knowledge of calculus, statistics, theory of interest, life contingencies, and loss
distributions are generally re‐quired to pass the first four exams. Past that point, at least on the PIC
side mathematical competency almost boils down to being able to add and mul‐tiply.
side,
mul tiply Basicknowledge of the above is all that is required. And as I said, I find the same is true for our day‐to‐day
life at work.
• Answer CAS: only basic mathematical competencies are required. Regression and modeling may bebeneficial, but are not a must. It is a common mistake to believe that extensive knowledge ofmathematics is required to be an actuary. However, one must like to work with numbers to enjoy
being an actuary.
• Answer Basic mathematical skills needed. The examinations helpful for a ca‐reer are the ones that
discuss the different methods for valuing liabilities, accounting, and finance.
• Answer Calculus, probability and statistics.

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p28 ‐ 29

Skills
Theory of Interest
Q Why do actuaries need the theory of interest? Please give examples and relate them to the SOA
or CAS examinations.

• Answer Very important for what I am doing, time value of money is a key con‐cept, actuarial present values, rateof return formulas, amortization tables, etc., are all concepts that I have to play with very often in my work even if
the way I work with them is different from an examination in Course 2, for example. Excel is used a lot in playing
with these concepts.
today'ss value of any fu
fu‐tureture payment of one dollar
dollar. It is the• Answer This is the basic clement of the calculation of today
cornerstone of our field.
• Answer It is essential for the calculation of annuities and the understanding of the time value of money. For
example, we use it when we calculate things payable at retirement with money accumulated today, or when wewant to know what is the value of a pension fund today considering what the membership of the fund might be in
the future.
future Again,
Again it is tested directly in one of the first exams and comes back indirectly in the others.
others• Answer When dealing with a client, we are looking at the overall result of the company, and this includes
investment income, future claims, future rev‐enues, etc. The theory of interest is crucial when it comes the time totake those amounts into consideration. It would not be right to use an amount that will be obtained in 10 years,
and this is where discounting comes in. The whole point of theory of interest is to calculate the company'sfifinanciali l situation
it ti att a certaint i pointi t ini time.
ti• Answer Similar to the previous question, virtually every business problem the life actuary deals with involves theassessment of risk, i.e., the value of a future event contingent on assumed probabilities. The present value of afuture event requires the application of the theory of interest.
fi‐nance
nance concepts. This material• Answer Theory of interest is the basic of many actuarial mathematics and fi
teaches you the value of money in the time. This has many applications in the every day and in the work life. It isalso a big part of the second exam.
• Answer Present value of annuities.
• Answer The theory of interest is needed to understand the basics of actuarial mathematics. The simple
concepts
t off PresentPt ValueV l andd AnnuitiesA
iti are present,t introducedi t d d andd explainedl i d ini ddetailst il ini theoryth
off iinterest,
t
t and
d
are everywhere in actuarial science. In Course 2, these skills are tested.

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p33 ‐ 34

Skills
Theory of Interest (continue)
•
•
•
•
•
•
•
•
•

•
•
•

Answer Time value of money (i.e., accumulation and discounting) and under‐ standing the basic structureof a bond are very important for calculating re‐ serves, premiums. They are crucial for asset‐liability
management. Courses 2 through 8 use these concepts.
Answer Basis for discounting future value of loss, benefits, etc. Also used in projecting figures in the future.
Answer That is the required course. If you don't understand this one, you may as well forget an actuarial
career.
Answer The theory
theor of interest is cr
crucial.
cial The time value
al e of mone
money is one of the underlying
nderl ing principles of
the insurance industry, only insurance takes it one step further by applying statistics.
Answer Probably not all that necessary now that most work is done on comput‐ers using interest vectors.
Answer The theory of interest is one of the essential building blocks of actuarial mathematics. It is needed
present and future values,, for example.
p Concepts
p such as calculatingg p
present values of bonds
to define p
and calculating loan payments and outstanding mortgage values involve the theory of interest.
Answer Actuaries in property and casualty insurance are constantly discounting future streams of
payments to calculate present values. They also need to understand annuities since they are sometimes
used in the claims settlement process. Beyond this, it is not being used too much.
Answer In pension,pension the theory of interest is an important subject.
subject The payment stream after retirement isbased on mortality and interest. It is also needed to project ahead or discount employee contributions.
Answer Interest theory and time value of money are extremely important in any investment‐productcontext (Course 2 of the SOA exams). Reviewing cash flows, profitability, and understanding gain/loss
scenarios all hinge on the theory of interest. It is particularly important for actuaries in the investment
fi ld
field.
Answer CAS only: present and future value calculations (investment of insur‐ance funds and discountingof loss reserves). Some annuity calculations.
Answer For valuating pension plans we need the concept of present value.
Answer Calculation of present value of future stream of payments.
payments

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p34 ‐ 35

Skills
Mathematics of Finance
Q Why do actuaries need the mathematics of finance? Please give exam‐ples and relate themto theh SO
SOA or C
CASS examinations.
i i• Answer Finance is a big part of second exam.
• Answer Mathematics of finance is also needed to understand the basics of actuarial mathematics. In Course 2, an extensive
and deep understanding of finance is needed. This knowledge and skill will also be used in the work‐ place. Often, an actuary
will be asked to do some financial analysis. A good basis in mathematics of finance is necessary for a good actuary.
• Answer Actuaries need to understand assets as well as liabilities in order to properly set reserves and premium and dividend
rates. Actuaries now need to understand both sides of the balance sheet to do their job correctly. Courses 5 through 8(SOA) really hit on this.
• Answer Needed when working on the asset side of a pension plan.
• Answer The Course 2 exam. Also, insurance products relate very closely to the time value of money and finance.
• Answer Financial mathematics is used when valuing pension assets. Also, a basic knowledge of financial markets is always
useful when dealing with clients and in devising models. Investors and their advisors are becoming more and more informed,
leading to more sophisticated market develop‐ments, products and services. As an actuary, and in most cases, at leastindirectly affected by financial markets, a basic knowledge of financial mathematics is highly recommended. Course 6 of the
SOA examinations is almost entirely based on financial mathematics. Although probably more technical than most actuaries
provides an excellent base.
will ever need,, it p
• Answer More and more actuaries are getting involved in the investment side of the business, particularly with DCAT [Dynamic
capital adequacy testing]. Although not everyone will use it, it is a good idea to be familiar with it in order to be a well‐rounded
actuary. Theory around cash flow and duration matching are also in common use. I believe this is now being covered in the
CAS Course 8.
• Answer In pension, you have the promises made to a participant to receive a pension, but you also have the employee andemployerlcontribution
t ib tiththatt makek up theth assets.
t YYou needd tto knowkabout
b t iinvestment.
tt• Answer CAS only: finance is not used per se in our day‐to‐day work. However, knowledge about the effects of diversification
may prove to be useful with respect to planned growth in PIC. This would relate to actuaries who have a more strategic role‐atthe executive level, or close to that level. Knowl‐edge about the risks related to various investments (bonds, stocks, etc.) may
prove to be useful in discussions at a higher level (executive level). Generally, knowledge about finance is very good to have,g the actual use of it is limited in the day‐to‐dayyy work. No link with exams.
although• Answer Finance related to good consulting when valuating liabilities.
• Answer Investment science.

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p34 ‐ 35

Economics

SkillsQ Why do actuaries need economics? Please give examples and relate them to the

SOA or CAS examinations.

• Answer Great background to have for working in retirement or asset consulting so you understand more ofwhat is going on in the real world. The only thing sometimes is that economics is a very theoretical science.
pp
to some theories seen in Course 2,, for example.
pSometimes it is difficult to see a real‐world application• Answer To understand the link between the liabilities of a plan and the assets underlying the plan.
• Answer A lot of our work depends on finance. For example, with the market situation today, pension funds arelosing money. This fact should guide ac‐tuaries when they give advice to their clients on when to file anevaluation or the decision to improve the plan, for example. It is tested in the exami‐nations in Courses 2 and 3.
• AnswerA
E
Economics
i is
i a bibig partt off theth secondd exam.
• Answer Economics are also needed to understand the basics of actuarial math‐ematics. In Course 2,
competency in economics is tested. This knowledge and skill will also be used in the workplace and serve tounderstand the ways a company and the market work.
• Answer Actuaries need to be able to understand the structure and the workings of the different investment
markets in order to manage their assets that back their liabilities well. Course 2 and Courses 5 through 8 touchon this.
• Answer Set appropriate economic assumptions for actuarial valuation: discount rate, rate of return on assets,
etc.
• AnswerA
Th thingThe
thi I rememberb aboutb t my economics
i classl iis ththe marginali l costt theory,thwhichhi h I apply
l very often.
ft
But I'm not sure if I needed this class.
• Answer Course 2. Also, the ideas of balance sheets are crucial even for pension plans and for the reserves of an
insurance company. Pension actuaries must weigh the assets and liabilities of a pension plan against each other.
• Answer Actuaries should have some idea of how macroeconomic events in the economy may affect the sectorsof the economy that have an impact on their business. For example, how will a slowdown in inflation affectlong‐term interest rates?

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p34 ‐ 35

Skills
Risk Theory
Q Why do actuaries need risk theory? Please give examples andrelate them to the SOA or CAS examinations.
• Answer Risk theory helps me understand the foundation of actuarial science. It is very important, I think,t b
tobe strong
t
in
i thi
this technicalt h i l area sincei
th ideas
theidinvolved
i l d come up on a daily
d il bbasis.
i• Answer Basic to our job is managing the risk related to a plan.
• Answer I rarely use risk theory at my level. But it is important for the examina‐tions.
• Answer Course 3 tests these skills.
• Answer Actuaries are trained to put a value on risk and handle future contingent events. Risk theory is thereal fundamental bridge between life contingency theory and the business of insurance. Courses 3, 5, and8.
• Answer Understand risks,
risks model risks to eventually put a value and cost on itit.
• Answer Risk theory is the heart of actuarial work. An actuary is an expert in the assessment andmanagement of risk.
• Answer Risk theory is the basic building block of the PIC business. However, as indicated earlier, the leveloff sophistication
hi i i is
i ratherh lackingl ki iin theh Canadiandi marketplace.
k lHowever, iit iis hhelpfull f l to understanddd riskik
theory in order to perform the daily work of a PIC actuary.
• Answer CAS only: This is the basis of the pricing work in PIC. I cannot say, however, that what I learned inschool with respect to risk theory helped me in my work.

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p38

Skills
Loss Modeling
Q Whyy do actuaries need loss modeling?
g Please ggive examples
p and relate themto the SOA or CAS examinations.

• Answer I guess it is very important in CAS, but is less important in fields such as asset consulting.
• Answer I am not yet familiar with loss modeling.
• AnswerA
I think
thi k thi
this isi more off a CAS thing
thi or perhapshalso
l a reinsuranceithithing.
• You need to be able to calculate the probabilities of incurring a loss before you can accurately set a pricefor an insurance premium. Loss modeling comes up in Course 4.
• Answer CAS stuff. Used in pricing products by modeling future expected losses.
N d d since
Neededinon‐life
lif risksi k generally
ll havehth following
thef ll i characteristics:ht i ti timeti
off eventt unknownk((so needda frequency distribution) and size of loss unknown (so you need a loss distribution).
• Answer More useful for CAS, I think.
• Answer Loss modeling is a fairly useful tool that is hardly ever used, at least in my experience. Lack of size
(and therefore lack of data) is one of the problems encountered when trying to do loss modeling.
modeling Oftena lack of time and resources will also force a company to use a broad‐brush approach in its pricing andreserving modeling.
• Answer CAS only: loss modeling may be used to forecast the severity of certain events, and also to
determine how variable results will be from one even to the next ((link with credibilityy of results).
) For
example, in looking at auto‐ mobile theft, vandalism and fire, loss modeling may be used to determine theshape of the curve that best describes severity (average cost). Once this is done, one can determine howvariable this severity will be, and therefore how many observations are required in order to get credible
estimates.

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p39

Stochastic Ideas

SkillsQ What stochastic ideas and techniquesqdo actuaries use? Please ggive examples
p andrelate them to the SOA or CAS examinations.

• Answer I know areas of the actuarial field where it is extensively used and is im‐portant. This is not
yet the case in asset consulting (at my level). But I know that stochastic ideas are very important inasset and liabilities management,g, an area I would love to gget into later on in myy career.
• Answer The only method used frequently is the Monte Carlo simulation, mostly for the projectionof the assets of the plan.
• Answer Continuous Markov chains are used by actuaries and are tested in Course 3, I believe.
• Answer Becoming more prevalent,prevalent especially with modeling possible future interest rate patterns
when determining reserve amounts for life insurance and annuities. Also used for sensitivity testingand pricing of minimum guaran‐teed death benefits for segregated funds. Course 8 had a big section
on this. Course 7 Pre‐test had this.
• Answer Projections of pension plan assets or surplus based on stochastic distribution of futureinterest rates. Can then determine the future distribution of values by percentile, calculate theprobability of having a value less than some fixed amount, etc.
• Answer To forecast what are best and worst case scenarios under different sets of hypotheses forsurplus or deficit in a pension plan.
• Answer Stochastic modeling of the cost of face amount guarantees on segre‐gated funds.
• Answer CAS only: stochastic techniques are not widely used in Canada. They may be used in thearea of DCAT [dynamic capital adequacy testing], al‐ though I do not know anyone who has
programmed or is using a stochastic model in Canada to do DCATs
DCATs.
• Answer More in asset consulting than liability consulting.

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p39 ‐ 40

Skills
Software Skills
Q What software skills should actuaries have and why? Please give examples.
• Answer All Microsoft Office tools (especially Microsoft Excel), databases (of‐ ten firms have their own database system that is learnedon the job), and logic. Knowledge of time management software is a must to effectively manage time in and out of the office!
• Answer Skills are more related to problem‐solving approach than real program‐ming skills.
• Answer Knowing all Microsoft tools such as Word, PowerPoint, Excel, etc., well. Being comfortable with searching for informationon the Internet.
• Answer Actuaries mostly use Microsoft Excel and should feel comfortable us‐ing it. Since we are playing with numbers all day long,
any software that performs similar operations can be used.
• Answer Programming skills are needed. Also, Microsoft Excel is a commonly used tool and the actuary should be very comfortablewith using formulas and editing data. Sometimes Microsoft Access is used for data modification or verification.
• Answer Strong Microsoft Excel skills are required, I think, in every company.
• Answer Microsoft Excel, Access and Visual Basic programming.
• Answer Microsoft Excel is a definite must. It is used in the day‐to‐day routine of an actuary. An actuary should also have goodcomputer programming skills and be comfortable with the Internet. Like in many careers, the computer is one of the basic tools of theactuary.
• Answer Actuaries should have good Microsoft Office skills, especially Excel, Access and Word. They should have strong programmingskills as well.
well Entry
Entry‐level
level jobs,
jobs in particular,
particular require good software skills.
skills E‐mail. Capacity to use e‐mail (obvious, I guess).
 Excel. Capacity to use Excel (most of the calculations are done in Excel).
 Word. Word processing: to write memos/documents (speed of typing is important). To be an actuary, one must likecomputers because about 90% to 95% of the work hours are spent on a computer.
• AnswerA
G d inGoodi Mi
Microsoftft Excel,E l Word,
W d andd Access.
A Excel. Advanced knowledge of Excel is required since most companies use Excel to put together actuarial analyses.
 Access. At least intermediate knowledge of Access is required. The actuary who is able to run complex queries will generatebetter data as a basis for actuarial analyses.
 Word. Basic knowledge of Word is required to convey results and findings of actuarial analyses.
 PowerPoint.
i Basic
i kknowledge
l d off PowerPointi iis required
i d to prepare presen‐tationsito management or clients.
li

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p44

Skills
Programing Skills
Q Which programming languages do actuaries need and why?
Please give examples.
• Answer Rarely. I need to write macros in Excel. That is about it.
• Answer None. All companies have their own software now.
• Answer Usually, each actuarial firm as its own program, so I don't think there is some particular programming
languages neededneeded. Of course
course, Microsoft Excel and Visual Basic are used a lot.
lot I would say that an actuary should
know at least one of the common programming languages (Fortran, C++, etc.). With that knowledge, it should beenough to adapt to others.
• Answer In my day‐to‐day work, I use Microsoft Visual Basic (for macros) from time to time. Besides that, it ismostly company‐specificcompany specific programs
programs. There‐
There fore,
fore more than knowing a single language inside out,
out I believe it is more
important to have a strong understanding of programming methodology.
• Answer I used SAS in a casualty insurance company and in government, and Microsoft Visual Basic in all of myinternships. Although I took C++ courses at university, I have never used this programming language.
• Answer I don't use any language, but the logic behind it is used for company‐ specialized software for actuarial
valuations.
• Answer Microsoft Visual Basic and Visual Basic for Applications are often used in the field. Knowing how toprogram macros and use them is often a great advantage. APL, although now more and more scarce, is also a
programming language that has benefits since it is still used in some insurance com‐panies.

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p45

Skills
Business Skills
It is often said that good business skills are essential to succeed in the actuarial world. What are businessskills? Manyy companiesp
now specializepin the teachingg of business skills. Let us take a look at a typicalyprepertoire of one of these companies. The company Learn2, for example, offers business skills courses
which include:Appraising people and performance
Articulating a vision
Coaching and counselingCommunication skills
Conflict resolutionCounseling and discipliningCustomer serviceDecision making
Effective presentations
Giving clear information
Interviewing techniques
Leadership situationsPlanning and scheduling workPlanning your presentations

Relationship strategiesTraining, coaching and delegatingTime management and prioritizing
Setting goals and standards

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p45

Business Skills

SkillsQ What business knowledge and skills do actuaries need and why?

Please give examples.

• Answer At a higher level, actuaries sell services to clients. So actuaries need to be good in persuasion.
understanding needs, and foresee problems or requests. Honesty is also very important. They need to beaware of the market in generalgeneral. To understand their clients better
better, they also need to check specific fields inparticular (if your client is a factory, you should know if the market is good for that field , not just for your client orin general). Actuaries also get to manage clients' teams: prices to charge, tasks to perform, who's to work together,time allocated to a project, and so on.
• Answer A good background in business is necessary to an actuary. A knowl‐edge of finance is essential in the.
study
d off actuarial
i l mathematics,
hi but
b even skills
kill andd knowledgekl d ini M
Marketingk i andd AccountingA
i can beb useful
f l sinceiyouwill often find actuaries in the marketing and assets and liabilities man‐agement department of an insurancecompany. Since actuaries often hold management positions, management skills can be useful.
• Answer There are others, but I would start with basic accounting (balance sheet, income statement, double‐entryg) and finance ((investments/assets/
characteristics).
)
accounting)• Answer This depends on the ambition of the person involved. Generally, the more ambitious, the more businessknowledge and skills are required. Actuaries who are happy working in the back room and are not interacting withpeople other than their manager and co‐workers probably don't need too many business skills. However, anyone
who wants to climb the corpo‐rate ladder requires business skills. Indeed, let us not forget that this is what we aredoing: running a business. The best actuaries in the field are, first and foremost, businessmen. They canunderstand the difference between an actuarial indication and the price the market will bear. They understand theimplication on the company of their decision with regard to IBNR (incurred but not reported) loss reserves orreinsurance. They get involved in projects and understand the work flow of the organization, the difference
between the bells and whistles, and necessary system enhancements. Business skills required include economics,
marketing, management (both personal, time, and project), finance, investment, and communication.

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p50

Skills

Communication Skills

Q What communication skills do actuaries need and why? Please

give examples
•

•
•

•
•

Answer The more skilled actuaries are, the better they are, as I have found out since working full‐time.
Especially in Montreal, being able to speak and communicate fluently in both English and French is agreat asset. For a junior consultant. it is of the utmost importance to communicate very well with theseniors so we understand exactly the work that needs to be done and once completed, to be able toexplain it to the consultant in clear words. Listening is also a forgotten skill, but very important in day‐to‐
day work. Presentation skills become more and more important, I assume, as you grow in the businessand have to meet with clients and present them ideas and reports. Being able to support your ideas andorganizing your thoughts are also key skills.
Answer Clarity, since it is difficult. Simplicity, since the client must understand.
Answer Knowing at least two languages, enough to be able to communicate, is essential. It is not
unusual to encounter French‐speakingpg clients, for exam‐ple.
p Canada is so bilingualg that it's not an option
panymore. Also, an actuary needs to be able to express his thoughts and his knowledge. It will happen
often that a more advanced actuary needs to explain something to a new one or even to a client. So
being able to be clear, not too complicated and see when the other person doesn't understand isessential. The same skill applies for writing (the annual statements, for example, ∙need to be clear, but
simple).
simple)Answer You need verbal skills to give presentations to your colleagues and to clients (particularly inthe consulting field). Your writing skills will be useful to write actuarial evaluation reports or prepareinternal status documents.
peoplep we are workingg with andAnswer Veryy ggood communication skills in order to ggain credibilityy from p
to explain simply what we have done and why.

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p51 ‐ 52

Skills
Communication Skills (continue)• Answer Presentation skills are necessary since it is often required from
actuaries to present their research results, projects or recommendations.
Actuaries must also be able to sell an idea. In the consulting business,
actuaries will interact with clients and need to be able convince the clientof the necessity of a benefit plan for example. Actuaries also sometimes
need to explain their results and recommendations. Hence
communication skills are,are as much as mathematics and business skills
skills,essential in the making of a great actuary.
• Answer Verbal: speaking to other actuaries in technical language,
speaking
ki tto non‐actuaries
t i ini non‐technicalt h i l llanguage, presenting
ti ttomanagement/board on reserves (appointed actuaries), presenting updated
pricing models to un‐derwriters, leaving phone messages. Written:ddocumenting
i in
i clearlandd understandabledd bl language,lwritingi i some lettersland reports (especially in con‐sulting), e‐mail. Listening: gathering
information, learning about other areas of the company, learning otherpeoples'l ' terms so you ran speakk to themhiin theirh i language.
l
Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p51 ‐ 52

Skills
Communication Skills (continue)• Answer Written: you often need to write important reports for
management and regulators and/or auditors. Internal documentation ofprocesses is needed as well. You also need to use e‐mail effectively tocommunicate with nonnon‐ actuarial staff
staff, the field force
force, and customers
who need to have techni‐cal concepts explained in non‐technical language.
Verbal: same reasons as above, without the written reports for regulators
and auditors.
auditors Public speak
speak‐ing:
ing: you are often required to makepresentations to audiences with varying actuarial knowledge.
• Answer You need good writing and verbal skills. Mastering two or morellan‐guages
isi a must.
t• Answer The biggest challenge is to understand what you are doing andthen to be able to explain it to people who don't have an actuarial
background. Therefore, it requires excellent communication skills if you
don't want to spend your life in front of your computer.
• Answer You need to be able to communicate complex actuarial concepts
to a variety of audiences and levels of understanding.
Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p51 ‐ 52

Skills
Communication Skills (continue)• Answer Expression. It might often be hard to express a mathematical calcula‐tion in words, but this is anecessary ability. When working with a team, it is necessary to be able to discuss one's work and the needfor certain calculations. It is important to be able to give oral presentations and to be able to speak in frontof a crowd. In a corporation, you must speak in front of a group to share knowledge and ideas.
• Answer Verbal and presentation skills to be able to present and sell your ideas and concepts tomanagement. This is often critical when you work closely with upper management (such as corporate
actuaries).
• Answer Depending on the actuarial field, various levels of communication skills are required. For
consulting actuaries, communication skills are extremely important. The level of knowledge of clients isquite broad; ranging from clients who are well informed to clients who have only a basic knowledge anddepend on consultants to provide them with the required knowledge and information. A consulting
actuary must therefore be able to commu‐nicate technical information into laymen terms and be able totailor the information based on the level of knowledge of the clients.
• Answer Actuaries need both written and oral communication skills, especially as more responsibilities are
assigned to them. Actuarial mathematics is a difficult concept. and it is difficult to explain to a lay
audience. Further‐ more, at least with P/C companies, actuaries interact a lot with marketing, sales, andbranch managers. In addition, all corporate actuaries interact with finance and upper management, as wellas IT [information technol‐ogy]. Rarely do actuaries price a product in a vacuum. The actuarial indica‐tion is
only the beginning of the process. What good is it to price a product at the actuarially sound rate if nobody
is going to buy it? Especially if the high price∙ is driven from conservative assumptions. Pricing actuaries
often have to explain or sell their recommended increases to a variety of people. When involved in various
projects (or business), actuaries are often experts relied upon to help shape the requirements of the project.
Good writing skills are essential in these instances. Corporate actuaries often need to explain their IBNR
[incurred but not reported] loss reserve calculations to upper management. When a change in IBNR canerase the entire profit for a given year, not only are good communication skills necessary, political savvy isalso essential! At a certain level
level, appointed actuaries also have to report to the Board of Directors
Directors. To avoid
the "glassy eye" syndrome, good verbal communication skills are again essential.

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p51 ‐ 52

Actuaryy Around the World

Australia
•

•
•

•

•
•
•
•

Admission as a Fellow of the Institute of Actuaries of Australia (FIAA) is granted once all five parts of the Institute ofActuaries of Australia
Australia'ss (IAAust) education program are successfully completed: (1) Part I‐ Technical Subjects
Subjects. (2) Part li‐
The Actuarial Control Cycle. (3) Part III‐Specialist Subjects. (4) The Practical Experience Requirement. (5) Professionalism
Course.
Part I is made up of nine subjects including statistical modeling, financial mathematics, stochastic modeling, survival
models, actuarial mathematics, eco‐nomics, finance and financial reporting and financial economics. All nine subjects
must be completed.
completedAccredited undergraduate actuarial programs and non‐award courses are offered by Macquarie University, Sydney, theUniversity of Melbourne, the Australian National University (ANU) in Canberra, and the University of New South Wales(UNSW) in Sydney. Alternatively, these subjects can be studied by corre‐spondence through the Institute of Actuaries(London).
Part II of actuarial education is the actuarial control cycle
cycle, which is an innovative means for learning how to apply
actuarial skills to business situations across a wide range of traditional and non‐traditional practice areas. Developed by
the IAAust, this course is taught by four universities in Australia (as men‐tioned above). A strong and rigorous policy
framework for accreditation of the university courses is in place, so that the IAAust maintains quality control of theteaching and assessment of the courses. After completing Parts I and II, members achieve Associateship of the IAAust(AIAA).
Part III consists of specialist subjects, of which students must complete two, in life insurance, general insurance,
superannuation and planned savings, finance, and investment management. These yearlong courses are developed andmanaged by the IAAust and are offered by distance education.
Students must complete 45 full‐time working weeks of relevant work experi‐ence after having completed Part II. Activities
that qqualifyy as relevant experiencepwould include work that makes use of economic,, financial and statistical pprinci‐plesp tosolve practical problems; work that deals with the financial implications of uncertain events.
The Professionalism Course is a highly participative three‐day residential cou‐rse conducted by the IAAust. It aims tofacilitate knowledge of the obligations, risks and the legal responsibilities of being a member of the actuarial profession.
The IAAust has concluded a number of bilateral agreements for mutual recognition of Fellows with the Faculty andInstitute of Actuaries ((UK),), the Societyy of Actuaries,, the Canadian Institute of Actuaries,, and the Societyy of Actuaries
of Ireland.

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p73

Actuaryy Around the WorldFrance•

The education of actuaries in France is university‐based. Three universities offer degree programs in actuarial
science: Brest, Lyon, and Strasbourg. According to Morgan (“Love it or hate it”, The Actuary 2001), "The
profession
f i isi stilltill underdevelopedd d ld compared
d to
t the
th United
U it d Kingdom,Ki d
andd FranceFisi theth only
l European
Ecountrytwhere actuaries are not a legally recognized profession." Morgan points out that "as in many European countries,
the actuarial profession has been more academic and less practical than that in the United Kingdom, but this ischanging as elements of accounting, law, and tax have been added to the course of study. These days, actuaries
work in banks and consultancies as well as in insurance companies. In insurance their role is widening toi l d marketing
includek ti andd communicationi ti
as wellll as just
j t ttechnicalh i l matters
tt suchh as ALM [Asset[A t andd liability
li bilit
management], and embedded values are starting to become more widespread."

Germanyy••

Germany has its own version of professional accreditation. In order to qualify for membership in the Deutsche
Aktuarvereinigung (Actuarial Association of Ger‐ many), candidates must pass examinations testing theirgeneral and specific com‐ petence in actuarial science. The Deutsche Aktuarvereinigung has joined fo ces with
the Deutsche Gesellschaft fiir Versicherungsmathematik (German Society for Insurance Mathematics) and theInstitut der Versicherungsmathematischen Sachverstiindigen (Institute of Experts in Insurance Mathematics) andfounded the Deutsche Aktuar‐Akademie (DAA) (German Actuarial Academy), which pro‐vides basic and advanced
training for actuaries. The DAA holds seminars and workshops for the courses in which actuarial candidates are
examined.
The German accreditation system consists of three levels of examinations, each consisting of several courses.
E h levelEachl l iis considered
id d tot requirei one year off preparation.
ti
Level
L l 1 consists
i t off threethexaminations
i ti
and
d one
compulsory course in data processing. The subjects examined include mathematics of the life insurance,
mathematics of finance, and other elementary actuarial topics. Level 2 consists of two examinations, chosenfrom four topic areas: P/C, pensions and stochastic methods, real estate, and health. Level 3 consists of acompulsory seminar and examination in one of the following specialties: life insurance, P/C, pensions,applicationsli ti
off stochastic
t h ti methods,
th d health,
h lth andd finance.
fiSeveralSl GermanG
universitiesi
iti offer
ff degreedprograms iniactuarial science. Among them are the universities of Ulm and Gottingen.

Quoted from “Actuaries’ survival Guide” p73

Actuaryy Around the World

Japan
•

•

The actuarial education is profession‐based. The Institute of Actuaries of Japan offers
actuarial courses that enable applicants to acquire basic knowledge and to prepare for
qualification examinations. Actuarial courses are divided into two categories, basic andadvanced courses. The basic courses are intended for students of the Institute, whileadvanced courses are aimed at persons who have completed the basic subjects.
To become an Associate member of the Institute, candidates must pass examinations in
the following five basic courses:
1. Probability and statistics.
2 Basic principles and applications of life insurance mathematics
2.
mathematics.
3. Basic principles and applications of non‐life insurance mathematics.
4. Basic principles of pension mathematics and pension finance.
5. Basic principles of accounting, economics and investment theory. After
passing these courses, candidates qualify for Associate membership in the Institute ofActuaries of Japan.

Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p81

Actuaryy Around the World

Japan
•

•

•

•

To become a Fellow of the Institute, Associates must pass two additional advanced
courses: (LI1) Life insurance products and development and (LI2) Life insurance
accounting, settlements of accounts, or (NLI1) non‐life insurance prod‐ucts anddevelopment and (NLI2) non‐life insurance accounting, settlements of accounts andasset management, or (PI) Tax qualified pension plan scheme and pension‐related tax
and accounting and (P2) Public pension system and employ‐ees' pension fund scheme.
Fellowships are approved by the Board of Directors of the Institute. New fellows arealso strongly recommended to take a half‐day professionalism course.
The education system of the Institute is under review with the following objectives:
broader areas to be examined and the completion of a professionalism course forfellowship will eventually he required.
Several Japanese universities offer courses on actuarial mathematics and risk
management, but there are no exemptions for qualification examinations. In 2001, themembership of the Institute was made up as follows: 958 Fellows (including six
honorary members), 772 Associates, and 1667 Students.
[As of 31. Jan. 2011, 1,254 Fellows, 963 Associates, 2,255 Students, total 4,472.]
Quoted from Fred E. Szabo “Actuaries’ survival Guide” Academic Press (2004) p81

Occupational distribution of Japanese Actuaries
Life

Trust
Bank

Non‐Life

Others

Total

Fellow

534

180

171

369

1,254

Associate

404

103

155

301

963

Student

892

153

374

863

2,255

T t l
Total

1 830
1,830

436

700

1 506
1,506

4 472
4,472

This isThi
i theth occupationaltil distribution
di t ib ti off theth actuaries
t i off JJapan. A
As off 31
31. JJan. 20112011.
40.9% in the Life business, 15.7% in non‐life, 9.7% in trust bank.
Historically, Life business needs many actuaries.

http://www.actuaries.jp/actuary/fields.html

Role of JapanesepChief Actuaryy
Article 120 (Appointment of Actuary, etc.)(1) The board of directors of an Insurance Company (limited to a Life
Insurance Company or a Non‐Life Insurance Company meeting therequirements specified by a Cabinet Office Ordinance. The same shallapply
pp y in the pparagraphg p ((3)) and in Article 122)) shall appointpp
an actuaryy
to Participate in the matters prescribed by a Cabinet Office Ordinanceas actuarial matters pertaining, among others, to the method of
calculating insurance premiums.
premiums(2) The actuary shall be a person with necessary knowledge andexperience with regard to actuarial science who meets therequirements specified by a Cabinet Office OrdinanceOrdinance.
(3) An Insurance Company shall, when it has appointed an actuary or
when its actuary has left his/her office, notify the Prime Minister
thereofhf withoutihddelay,
l pursuant to theh provisionsii
off a Cabinet
C bi
OfficeOffi
Ordinance.
Japanese Insurance Business Law
http://www.fsa.go.jp/news/19/ginkou/20080627‐4/03.pdf

Role of JapanesepChief Actuaryy
Article 121 (Actuary’s Duties)(1) The actuary shall, for each accounting period, check the following
matters pursuant to the provisions of a Cabinet Office Ordinance andsubmit to the board of directors a written opinion describing his/herfindings:g(i) Whether the policy reserve pertaining to the insurance contracts
specified by a Cabinet Office Ordinance has been funded
according to sound actuarial practice;(ii) Whether policy dividends or dividends of surplus to members
have been distributed in a fair and equitable manner; and(iii) Any other matter specified by a Cabinet Office Ordinance.
Ordinance

Japanese Insurance Business Law
http://www.fsa.go.jp/news/19/ginkou/20080627‐4/03.pdf

Role of JapanesepChief Actuaryy
Article 121 (Actuary’s Duties) (continue)(2) The actuary shall, without delay following the submission to the boardof directors of the written opinion set forth in the preceding paragraph,submit a copy
py of the written opinionp
to the Prime Minister.
(3) The Prime Minister may request the actuary to provide explanations
about the copy of his/her written opinion set forth in the preceding
paragraph and to present an opinion on any other matter in the scopeof his/her duties.
(4) In addition to what is provided for in the preceding three paragraphs,
any necessary matter regarding the written opinion set forth inparagraph (1) shall be specified by a Cabinet Office Ordinance.

Japanese Insurance Business Law
http://www.fsa.go.jp/news/19/ginkou/20080627‐4/03.pdf

Role of JapanesepChief Actuaryy
Article 122 (Dismissal of Actuary)
The Prime Minister may order an Insurance Company to dismiss its actuary,
when the latter has violated any provision of this Act or any measures of thePrime Minister under this Act.

Japanese Insurance Business Law
http://www.fsa.go.jp/news/19/ginkou/20080627‐4/03.pdf

Actuaryy Around World

Korea
•

•
•
•

To be the assistant actuary, the student has to pass the 4 exam. After that, passing the three professional exams,
he’ll be a candidate to be fellow. For being the fellow, it is required to finish two years’ practical experience in thefinancial institute,, or half yyears’ experiencepand the submittingg the qqualified article.
The detail of the subjects are presented in the following sheets. One of the distinctive subjects is the Language.
The applicant has to choice English or Japanese.
From 2014, the Korean examination system will be changed. The subjects will have much more risk management
items.
items
Following table shows the number of fellows and assistant actuaries in Korea. (as of June 2012)

Total

1 327
1,327

Fellow

820

Assistant Actuary507

Fi t stageFirstt
Subject 1
Subject 2
Second stage

9:00～10:20（80900 10 20（80 minute）
i t ）Insurance Law (contract andbusiness law)
Economics or Business science
9:00～10:40
Insurance Theory

10:50～12:40（1101050 12 40（110 minute）
i t ）Language (English or
Japanese)
Insurance Math.（BasicMath （Basic Life
Ins. Math., calculus andprobability）

11:00～12:40
Accounting

13:40～15:40
Actuarial Math

1 The pass mark of the each subject of the first stage is 40,1.
40 however the
average of the paired subjects shall be over 60.
2. For the second stage, the pass mark is also 40 for each subject, however,
the examination committee decides the number of the successful
applicants. This number varies every year. In the past, the number was
10 to 20, but recently this number is over 100.
3. After the second stage,g , two years’ybusiness experiencep(OJT),( ), or halfyears’ business experience and submitting a study paper, the applicant
will be a fellow of the Korean actuary.
4. There is two years limited period to success the second stage, thecandidate has to pass all subjects of second stage within two years.

U tto 2013
Up
1 Economics or Business science
2 Insurance Math.
3 Language
FiFirst
stage 4 IInsurance relatedl d Laws
L

Secondstage

1 IInsurance ththeory2 Accounting
3 Actuarial Math

F
From
2014
1 Economics
2 Insurance Math.
3 English
4L
Law (I(Insurance contract, Insurance
I
Business and workers’ retirement
benefit law)
5 Accounting
1A
Actuarialt
i l riski k managementt
2 Actuarial Math.
3 Pension Math.
4 Actuarial modeling
5C
Corporatet fi
finance andd fifinanciali l ttechnology
h l

1. Expand the Exam to the risk management and finance2. The sufficient mark of TOEIC or TOEFL is substitute for Exam of English
3. There is five years restriction period to pass the second stage, thecandidate has to complete all subjects of second stage within five years.
4. To beb a fellow,
f ll
it
i is
i requesteddbbusinessiexperience.
iASA Pathway to Membership
FAP

Exam P

Exam MFE
Exam C

Exam FMExam MLC

VEE
Exam P : Probability
Exam FM : Financial Mathematics
Exam MFE : Actuarial Models – Financial Economics
Exam MLC : Actuarial Models – Life Contingencies
Exam C : Construction and Evaluation of Actuarial Model
FAP : Fundamentals of Actuarial Practice
VEE : Validation by Educational Experience
APC : Associateship Professionalism Course

APC

FSA Pathway to Membership

When you are ready to take the Fellowship‐level requirements, you must select a specialty track
and complete all requirements in the track (Mixing requirements from different tracks is not
permitted.). The SOA offers six specialty tracks.

Corporate
Finance and
ERM

IndividualLife andAnnuities

Group and
HealthQuantitative
Finance andInvestment

Retirement
Benefits

GeneralInsurance

FSA Pathway to Membership
Ex. Individual Life and Annuities

Regulationlandd Taxation Moduled lEnterprise Risk Management (ERM)
ModuleDMAC
The Decision Making andCommunication

FAC
Fellowship Admission Course

Financial Economic Modules

Life Pricing ExamLife Finance and Valuation ExamLife Risk Management Exam or ERM Exam

CERA
Changing the conversation around risk
Risk has changed. So, too, has the kind of professional best qualified to manage it.
The most comprehensive and rigorous demonstration of enterprise risk expertiseavailable, the Chartered Enterprise Risk Analyst® (CERA) is a professional who
bl d thblendsthe quantitative
tit ti andd th
the qualitative—who
lit tih thinks
thi k critically,
iti ll creatively
ti l anddcollectively about risk, and acts with integrity.
Building upon a rich history and standard of excellence, the CERA credential fromthe Society of Actuaries CERA reflects the actuary’s evolution—from helping theworld better understand risk to playing a leading role in an organization’s risk
management. Today, CERAs are changing the conversation around risk—speaking
not merely to what we can lose, but to what we can gain.
No other type of risk professional is better equipped to take a 360‐degree
approach to risk, to drive better decision‐making and optimize risk enterprise wide.
‐ See more at: http://www.ceranalyst.org/index.asp#sthash.tFqATDEd.dpuf‐ http://www.ceranalyst.org/index.asp

CERA Pathway to Membership

FAP

Exam P

Exam MFE

Exam FMExam CVEE

ERM Module

ERM Exam

APC

About the salary survey

About the salary survey

http://www.actuaryjobs.com/

Summary
1. Mathematics and Statistics is important
1
2. The daily life of an actuary is so called “bread‐and‐butter.”py the Microsoft Excel, Excel
3. PC skill, especially
VBA, Word, Access and PPT are essential.
4 Programing languages are also important.
4.
important
5. Patience and hard work are the key to success.

Th k you fforThankyour attention