Ask an Actuary

"The successful actuary will be able to effectively translate the technical knowledge into words and ideas that everyone can understand. "

Every other month a different actuary will be asked to describe the path that led him/her to an actuarial career. March and April's actuary is Dale Hall of The Midland Life Insurance Company.

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

A: I first heard of the term "actuary" during my Freshman year in college. Each area of study at my school hosted a "Meet Your Major" program where students could learn about the curriculum and what jobs could potentially arise from majoring in that particular field. Since I had enrolled in a few math classes during that semester, I went to the Math Department presentation among others. They described several different options for what you could do with a math degree and being an actuary was one of them. I liked the idea of using a math degree in somewhere out in the business world. I received an internship for that summer, liked the work I did and learned a lot from the other actuaries.

Q: Who or what influenced your decision?

A: The biggest influences in my decision to pursue the profession came from both my teachers in college and the actuaries who worked for the company where I interned. My college professors inundated me with information about the exams and were always there to help answer questions I had about the profession or preparing for exams. They certainly helped by encouraging me to continue on with some of the early successes I had. My mentors during my internship also had a strong influence on me. They patiently answered my long strings of questions and I learned a lot by having them continuously introduce me to new pieces of actuarial information.

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

A: I have a Bachelor of Science degree from John Carroll University. I majored in math and minored in Probability and Statistics.

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: The large number of math classes I took certainly helped me prepare for the early exams. Although our major coursework was very theoretical, we did have courses in other topics such as Operations Research and Numerical Analysis. I think my theoretical math background has helped me over the years as well, however, since we are constantly applying ideas from one part of our work into many other places. I took a few upper level economics courses in the JCU business school and that has helped me over time. I certainly would recommend that an aspiring actuary ground themselves in business material. A good rule of thumb is usually to take all the courses that might later be prerequisites to an MBA program. These usually include classes like finance and business law among others.

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: My first official job in the profession was as an Actuarial Analyst for Westfield Life Insurance Company. I had interned at Westfield and when I graduated, I began looking for a full time position. I had the opportunity to go other places, but the more I thought about it, the more I realized that the small insurance company setting had really allowed me to get my hands into many different aspects of a company. Fortunately, they were looking to add on to their full time staff at that time, and I became one of three life actuaries at the company. In our small company atmosphere, we were exposed to a variety of different tasks to accomplish, including product development, valuation, financial reporting and even marketing functions.

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 actuarial exam in May of 1991, and have passed (and failed) a lot of exams since that time. I am completing my Professional Development phase of the exams this spring and should obtain my FSA in August.

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

A: After working my way up through various responsibilities at Westfield Life, I was given an interesting opportunity to become the Investment Actuary for Westfield Companies in 1996. This involved working with the investment team that oversaw the assets for the group of companies including Westfield Life, a set of Property/Casualy companies, and our own internal pension fund. I assisted in creating the investment strategies for the portfolios and introduced risk management techniques. When the group of companies decided to sell Westfield Life in 1998, I moved to The Midland Life Insurance Company to become the Director of Financial Reporting and Asset/Liability Management. In this role, I helped put together the actuarial items which formed the income statements for the company and created investment strategies for the company. Earlier this year, I took on my newest role as Director of Product Development.

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

A: In my current job, our team focuses on four main objectives for the company. First, we develop and price new products for our company to sell. We also help the company mitigate its risk by determining the appropriate reinsurance for our products. We are active participants in the merger and acquisition process of our company by modeling and evaluating new business opportunities. Finally, we play a corporate development role by evaluating new product and business ideas that the company brings to the table.

Q: How long have you been in the profession?

A: As mentioned above, I've been taking exams for about nine years and working as a full time actuary for about seven years.

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

A: My first piece of advice would be to gain exposure to as many different actuarial topics as possible. Not only will it give you a better understanding of the topics you encounter, but helps diversify your knowledge into many field of expertise. Second, you should realize that your work still lies within the framework of a business. You should educate yourself as quickly as possible about how the company generates revenue and produces profits. Finally, you should realize form the start that you will be working with many people who don't have the same level of actuarial expertise as you do. The successful actuary will be able to effectively translate the technical knowledge into words and ideas that everyone can understand.

Q: I am a college student and I am writing a research paper on becoming an Actuary Statistician. My paper has to be an issue of significance or controversy within your field of study. I am wondering if you know of any significance or controversy within the field that I could do.

A: One of the issues many companies are contending with is the ever-growing ability of prospective insureds to test themselves for certain diseases. For example, if the company is looking to sell critical illness insurance which would pay out a benefit if an insured developed certain diseases, then they could be selected against if a person obtained a medical kit that was able to tell them if they had a strong chance of developing the disease. In products like these, companies need to keep up to date and adjust the pricing of the product to accommodate anti-selection. As medical technology increases, it is important for actuaries to be aware of these developments.

Another recent issue that the life insurance industry faced was the creation of more stringent reserve requirements for many forms of life insurance, and predominantly term life insurance. The National Association of Insurance Commissioners recently created a new model regulation that many states have adopted to change reserve methods. Many companies would argue that the old methods were sufficient. The end result of this regulation has forced companies to create higher prices and shorten guarantees on term life insurance.