Ask an Actuary

"The work is excellent, as every day brings new challenges."

Every other month a different actuary will be asked to describe the path that led him/her to an actuarial career. November and December's actuary is Peter Martin of St. Paul Re in London.

Q: When did you first decide to become an actuary?

A: I first heard about the profession in my senior year of university. The Chicago Jobs Almanac had just named actuary as the #1 occupation in the country. That piqued my interest and I soon found that several local firms were recruiting for their actuarial departments on campus.

Q: Who or what influenced your decision?

A: Passing my first exam gave me confidence that I could do the job. Most of my studying for that exam was done between pickup basketball games at my local gym. When I passed Part 1 on the first try, I (falsely) assured myself that I would have no problem getting through the remaining 9 exams. Boy, I had a lot to learn!!!

Q: What is your educational background? Where did you attend college and what was your major?

A: I received a BS in Applied Mathematics from the University of California at Berkeley in 1989.

Q: What classes did you take in college that helped prepare you for the career? What class was most helpful? What classes outside of math and statistics (such as communications) were helpful?

A: Surprisingly, I think that writing classes were the most helpful for my day to day duties. I spend a lot of time communicating via the written word, whether it be emails or formal reports. I like to think that the extensive writing classes that I took have enabled me to express myself on paper much more clearly and effectively.

As for technical classes, I think that it is important to learn at least one computer language. This will help develop your logic skills, which are crucial in most actuarial jobs. A solid grounding in probability theory is also very useful. One of the more practical courses that I took was a fairly basic course on probability distributions in my freshman year. I often refer back to the textbook for that course even today!!

Q: What was your first job in the profession? How did you get the job? Did you start as an intern or in an actuarial training program? What type of work did you perform in you first actuarial job?

A: The summer before I graduated from university, I took an internship with the Office of Personnel Management in Washington D.C. I applied for the job from the Federal Jobs Center in San Francisco and was offered the job over the phone. It didn't pay much, but it was a fantastic opportunity for me to get some exposure to actuaries solving real-world problems.

The work involved the pricing of health insurance benefits for federal employees. As it turned out, the experience had little in common with my responsibilities at my first job after university. Nevertheless, the internship convinced me that I wanted to at least try the actuarial profession.

Q: When did you take your first exam? How long did it take for you to get through the exam process?

A: I took my first exam in November, 1989. I achieved ACAS in May 1994 and FCAS in May 1998.

Q: What was your career path from your first job to your current position?

A: I started out at Fireman's Fund in 1990 pricing Commercial Property business. Fireman's Fund had (and still has) a very good rotation program that allows junior people to move between different areas of the company. In 1992, I was rotated into the Homeowners area. My last rotation at Fireman's Fund was into the corporate reserving area. Finally, after 6 years at Fireman's Fund, I was given the opportunity to change companies and move to England and work for a major reinsurance company. I have now been in England for 3.5 years.

Q: What type of work do you do on a day-to-day basis in your current position?

A: I am responsible for pricing North American reinsurance policies. Reinsurance can be thought of as insurance for insurance companies. My job involves evaluating individual reinsurance policies and setting the prices that we charge our customers (in reinsurance, our customers are insurance companies). The work is excellent, as every day brings new challenges. I rarely ever do the same job twice. I also have a lot of contact with underwriters, brokers and representatives from insurance/reinsurance companies. If you like working in a front line position, with lots of personal contact, then reinsurance pricing is a good area to try.

Q: How long have you been in the profession?

A: I have been working as an actuary for about 9.5 years.

Q: What advice would you give to someone first starting out?

A: You MUST pass the exams if you really want to succeed in this profession. There are some exceptions to that rule, but they are few and far between. Passing the exams requires tremendous discipline and drive over a long period of time, but the rewards are well worth the effort. I would also suggest that students start out working in a company where there is a functioning rotation program. You need to get exposure to different areas of insurance operations (i.e. reserving, pricing, reinsurance, etc.) if you want to run an actuarial department later on in your career. Even if you don't want to be a chief actuary someday, you will get a much better feel for the "big picture" if you participate in a rotation program.

Q: I am a student in Computer System Engineering in a local university besides that I am also appearing in the exams of SOA. Do you think I can utilize my degree in Computer Systems in the actuarial profession?.Do any jobs exists in which I can serve as an actuary as well as a system engineer for a firm? Any suggestion? Thanks For your time.

A: Many actuarial jobs require computer programming experience. Your skills would certainly be in demand in many insurance organizations. I know of a few people that are actuaries (or people that initially trained as actuaries) who work in the IT departments of major insurers. Of course, my knowledge is limited to the property/casualty side. It may be that life/pension actuarial work is even more computer intensive, which puts you in an even better position. If you are interested in pursuing the SOA designation, i.e. the life/pensions track, I recommend that you pose a similar question to an SOA actuary.

I would also recommend going on some job interviews. There you will be able to ask the hiring authority how your skills would fit in.

Q: I am writing this mail to ask for your advice about my intention to become an actuary. I am a new immigrant of Canada. I graduated from East China Normal University with a Bachelor Degree of Science in Applied Mathematics 8 years ago. Now I am intersted in studying Acturial Science in Canada and become an acturary later, and I have contacted with University of Waterloo for a Post-degree diploma program in Acturial Science which is designated for holders of a Bachelors' degree in an area other than Acturial Science who wish to abtain the background necessary for entry-level employment in the acturial profession. Recently University of Waterloo informs me that I am accepted for this program for Winter 2000 term, but the financial support is not available to students enrolled in this program. So now my question is: after I complete this one-year full time program and get the post-degree diploma in Acturial Science, can I directly start my entry-level profession in acturial area? or must I first finish at least 200 credits to get student status in Canadian Institute of Acturaries in order to be employed in acturial area? I plan to write the exams while studying for the post-degree program, but I don't think I can complete 200 credits within one year. I think normally it will take 2-3 years to gain 200 credits. But I do want to start a career in acturial arear the sooner the better.

A: As an American actuary never having worked in Canada, I am afraid that I am not qualified to answer that question. In America, you would not generally need to secure a degree (especially not a post-graduate degree) in actuarial science in order to land an entry-level actuarial position. However, the situation may be different in Canada. I direct you to the Canadian Institute of Actuaries web site, which may provide you with an answer or some people that you can contact. The web site is : http://www.actuaries.ca/homee.htm

Q: I am 30 years old, I have an MBA, and I am interested in learning more about actuarial training. What would I need to do to enter the profession at this time? I expect that I will have to take some additional courses. I have training in calculus and statistics, but not in linear algebra. I probably need additional statistics courses. Where can I get more information on opportunities for someone in my position?

A: The best place for you to start would be Cornell's career center. There you should be able to find information about the career. I would also recommend that you sit for at least the first examination. This will show potential employers that you are serious about pursuing the career. I would not worry about additional statistical courses, unless you have a difficult time with the first exam. Given your background, I would guess that you would have no problem self-teaching the statistical material on the later exams.

Having an MBA is a real advantage, especially as the insurance and financial sectors continue to develop new ways to handle risk transfer. Your skills will be in high demand.

Finally, contact an actuarial recruiter or two. They can give you a good feel as to the type of positions available for which you could qualify.