Ask an Actuary

"Begin building a personal network from your very first day. "

Every installment a different actuary will be asked to describe the path that led him/her to an actuarial career. Our featured actuary is Claude Penland, Manager - Websites & Internet Strategy, of D.W. Simpson Co.

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

A: (Please forgive my brevity - my infant son just deposited his dinner on my keyboard.)

After my junior year of college, I had a good experience as an actuarial intern at a firm down the road from my parents' home. So the profession basically fell in my lap.

Q: Who or what influenced your decision?

A: My boss at my internship was an alumnus of my college, and I could relate to his experience. Also, the starting salary without an actuarial exam was impressive. I interviewed for many math-related jobs and this one looked like the best choice.

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

A: I have a B.S. in Applied Math from Johns Hopkins University with a concentration in Economics.

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: I took at least a dozen writing and social sciences classes and those were the most helpful. Even though my curriculum was "applied" math, I found out in taking the exams that I basically had to relearn much of the material because it had been pretty theoretical.

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: I sent my resume via snail mail to one of the top actuaries at CIGNA Property & Casualty. The first few years, I worked in the Special Risk pricing unit pricing large corporate accounts' insurance and writing reports that nobody read.

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

A: I passed part 1 the month that I was hired. I received my ACAS 5 years later and then re-claimed my social life.

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

A: In addition to large account pricing, I spent a few years in claims reserving. From there, I quit my job to drive around the country for the summer. After that I worked in New York, pricing non-traditional insurance risks for AIG and later consulting at Milliman & Robertson.

After fiddling with the Web for a little while, I was hooked and some informal discussions with my current employer, an actuarial recruiter, led to my current position. I am the only actuary that I know of that does what I do.

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

A: As Manager - Websites & Internet Strategy for D.W. Simpson & Co. Actuarial Search, I build and manage several websites, among them http://www.dwsimpson.com and http://www.on-campus.com. I am personally responsible for our online presence, be it making the user experience as beneficial as possible, search engines, negotiating advertising on other websites, everything.

I am particularly excited about our On-Campus Resources site -- http://www.on-campus.com -- which provides comprehensive outsourced college recruiting services to employers of entry-level and internship candidates. We are always fiddling with ways to improve that program.

Q: How long have you been in the profession?

A: I was an actuary for 8 years. I've been in my current position for the last year and a half.

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

A: It will probably take you a few thousand hours of study to obtain your Associateship or Fellowship. To get a feel for what 2,000 hours represents, buy that many paper clips and dump them on your desk. If you're prepared to study for as many hours as paper clips, go for it.

Always ask "Why?", regardless of how you think the person across from you will take the question.

Begin building a personal network from your very first day.

Q: I graduated with a BS degree in Quantitative Methods almost 30 years ago, but never pursued a career as an actuary. I spent 8 years in Industrial Engineering, 3 years in management consulting, 18 years in executive recruiting, and the last year and a half as a career advisor. I recently took a career assessment test that pointed me in the direction of becoming an actuary! I possess good analytical and communication skills, and have an interest in the field of pensions and investments.

A: I have the advantage of being able to pick the brains of the actuarial recruiters at D.W. Simpson. One suggested that the biggest hurdle you would face would be fitting in with the rest of the entry-level class.

In terms of salary expectations, some companies will give you credit for your overall business experience and adjust your salary accordingly. However, many will only go to their set salary grade for entry level actuaries, so you may have to take a significant financial step back.

Another recruiter reminded me that the actuarial exams will take 5 to 15 years, and it may be hard for a firm to rationalize an investment in you versus a cheaper college-age student with a longer career ahead of them.

Finally, my own observation is that you will be expected to do the same job and study the same material as employees half your age. I would go on some informational interviews and perhaps seek a niche that might not cause as much of a career shock or salary loss. My own career assessment test said journalism, which (to me) has a similar apprenticeship program to actuaries. You see how far I ran with that -- it's hard to make a decision based on a test.

Q: In your opinion, what are the top 15 colleges that specialize in actuarial science. I.E. What would be the "West Point", "Harvard", or "Yale" colleges when it comes to actuarial science?

A: Checking the SOA website, there are over 50 colleges offering advanced undergraduate actuarial science courses - http://www.soa.org/academic/schoollist.html .

By definition, schools that offer an advanced curriculum have made a large commitment to the profession, and I would expect one to receive a fine education from any of them. Nonetheless, after taking an informal poll, a suggested "top 17" might include (in no particular order): Waterloo, Nebraska, Temple, Florida State, Georgia State, Laval, Illinois, Drake, Iowa, Connecticut, Texas at Austin, Boston Univ., Penn State, Michigan, Univ. of Pennsylvania, Ohio State, and Concordia.

Q: I have recently become interested in Actuarial Science. I have a B.A. in philosophy and 10 years of experience in budgeting/budget analysis.

A: After taking another informal poll, the consensus is that passing a few exams would be more immediately useful than a master's degree. Theoretically, you could pass the exams more quickly than earning the degree (and it's cheaper). Many employers require an exam or two for employment consideration. A master's degree is hardly ever a prerequisite for actuarial employment.

It sounds like you're already on a good path by studying Calc I & II. You might want to look into classes and study groups based closely on the material in the exams, since you mentioned a lack of a background in math. The BeAnActuary.org site has an excellent section on exams at http://www.beanactuary.org/exams/ .

Q: Does being an actuary require a bachelor's or a master's degree?

A: There are only a handful of actuaries without either degree, but essentially you need a bachelor's to get through the door at almost every company today. It might very well be "every" company -- I'm not sure.

A master's or other advanced degree is rarely required for a non-academic position, although it can depend on the position's specialization.

Q: I am currently in the Human Resources field and am looking for a career change. I am very interested in becoming an actuary and need more information before jumping into the unknown.

A: I've heard that http://www.how-to-pass.com & http://www.actuarialbookstore.com are good sources of review books. The BeAnActuary.org exam section at http://www.beanactuary.org/exams is a pretty exhaustive resource, and leads to links to other study materials, too.

Q: My name is Ryan and I am currently an accountant. I have my CPA license. Currently, I am contemplating a career change. One of the fields I am interested in is actuarial science. I know that my background in accounting will be somewhat helpful in the actuarial field. However, I am not naive, and I know that such a career change may take some time. Any information you could provide to me on the actuarial field would be helpful. I have read through the website for some general information. Some questions which are of great concern to me are:

1. How long would I have to go back to school to become an actuary?

2. What schools accross the country are most known for actuarial science? I currently live in Wisconsin. Are there any schools in my state which focus on actuarial science. I am assuming UW-Madison is definitely one possibility.

A: You wouldn't necessarily need to return to school to become an actuary, given your background. In fact, your CPA would be a definite plus given the right actuarial position. However, you would probably need to start studying for the first actuarial exam, and again I point to the fine BeAnActuary exam section at http://www.beanactuary.org/exam for syllabus and exam preparation classes information.

The SOA provides a good list of university programs at http://www.soa.org/academic/schoollist.html . Besides UW-Madison, that list also indicates that UW-Milwaukee has an actuarial science program.

My employer just updated their actuarial salary survey, which is available from the link on the salary section of this site: http://www.beanactuary.org/find/salsurvey.cfm.

Q: I am currently a first year student at the Univeristy of New Brunswick in Saint John, New Brunwick and I have an interest in the actuary profession. I am studying toward a Bachelor of Science in Data Analysis. I am currently enrolled in classes such as calculus, computer science, electronic commerce, stats, history, and macroeconomics. Can I still become an actuary by continuing with my BScDA??

A: Yes, it sounds like a great program, and many actuaries are in fact already involved in data analysis and data mining. I would compare your curriculum to the syllabus for the early actuarial exams and fill in as many of the blanks as you can with elective classes at your school.

Q: I graduated with a BS in Economics and an MBA. However, I didn't discover the actuary field until recently and so I never took courses that work toward the degree. I suppose I have some courses that do apply though. What is the best way to begin finding and gathering information about the actuarial degree? How long would it take me to accquire such a degree? Any information would be appreciated.

A: It depends on why you want to pursue an actuarial degree. With an economics and business degree, you already have a good quantitative basis for the profession. I would compare what you've already studied to what you'll be expected to know for the entry-level actuarial exams. I would investigate exam preparation classes, textbooks and workbooks to fill in your knowledge and then take an exam. (I'm a broken record, but the http://www.beanactuary.org/exams section really is a good resource.)

The SOA has a list of actuarial programs for you to look into at http://www.soa.org/academic/schoollist.html . The length of time to earn your degree will vary depending on earned credits based on your prior classes, as well as individual differences unique to each college. I would contact the schools individually.

Q: I am currently a senior in high school, and I am actively interested in an actuary career. I have strong math skills and am ranked 2 in my class. I have my choice of colleges narrowed down to two. I either want to attend the Ohio State University or Princeton. Princeton is a very prestigious school, but only offers a degree in mathematics. Ohio State has an actuarial science program. Can you please give me some advice about the advantages/disadvantages of attending either school? I am most interested in finding out what career opportunities will be available to me after I graduate from either college.

A: Obviously, I bring my own opinions and biases, so please do not too much weight on my answer. The first thing I did was check Princeton's Math website at http://math.princeton.edu . Somewhere on there, I recall, they've added some actuarial links at my request awhile ago; so it's clear that they are at least aware of the profession. I also visited the Ohio State actuarial science page at http://www-afa.adm.ohio-state.edu/u-majors/ACTUSC.HTML .

I urge you to visit the career websites of both schools at http://webware.princeton.edu/Career/ and http://career.asc.ohio-state.edu to get a feel for the commitment each has made to helping to place graduates. Arguably, though, with the depth and breadth of Web career sites, among other things, you are (and certainly will be in 4 years) less dependent on your school's career center than you are on simply educating yourself on your options and going after them.

Advantages? I suppose if you started in the OSU actuarial science program and didn't like it, you could transfer to a straight math major or other discipline. You wouldn't necessarily have that option at Princeton.

Both schools, I imagine, have a very strong alumni network, which may help you find internships and your first job.

Pedigree, i.e. your alma mater, though matters very little in the actuarial profession. In fact, it might never cross the minds of most employers (unless you happen to share the same school with your potential employer). It's more your knowledge of the material and/or your aptitude for learning it. So graduates of Princeton, Ohio State and Lebanon Valley College are usually on a level playing field.

Now, my biased view is this: after 4 years, you can always get an employer to pay you to study compound interest and life contingencies, which are part of the actuarial exam syllabus. Or you can take a few actuarial science classes as an undergrad in preparation for the first exam or two.

However, no one is going to pay you to learn cryptography, game theory or optimization techniques. You have an opportunity to learn those things as a mathematics undergraduate, and your career aspirations may change based on the more interesting things you learn. Being an actuary is only one of dozens of cutting edge professions for those mathematically-inclined. How can one be sure of their career-track before they've even entered college?

Q: I'm currently a 2nd year student at the University of British Columbia and sadly now it comes to the time for me to choose a major next year. Having a strong math background, I've decided to pursue a career in the acturial field. It seems like that the acturial career requires a wide range of knowlegde besides the usual math and stats. Yet I'm also passionate about a totoally unrelated subject -- biology. (In fact I'm taking more life science courses than math.)Even though double majoring in these two fields is possible, it'll probably take more years to complete. With your past experience, is there any areas/positions that both disciplines apply? ie would it be worthy to spend the extra years. Thank you so much.

A: I remember in college I considered a double major in math and economics. Instead, I decided on a "concentration" in economics, which means that I took the elective economics classes that simply interested me without delaying my degree. In retrospect, it was a good choice.

Double majors, in general, reduce the room you have for valuable electives that round out your education. Do you take Organic Chemistry or Short Story Writing? Combinatorics or Intro. to Philosophy? A double major -- to the people I know that have them -- is more of a bragging rights thing rather than something that helped them professionally or personally.

One of our recruiters suggested to me that (verbatim), "...the only thing I can think of is, possibly, an opportunity in actuarial/healthcare consulting, in which actuaries work closely with the providers (doctors, etc.) in formulating and/or capitating rates for the various procedures, treatments...you name it. A background in biology might be a little more advantageous than one solely in mathematics or actuarial science. I recognize that healthcare consulting and a college degree in biology are remotely related at best."

However, I don't know your relative aptitudes and interests in biology or actuarial science, and I know very little (arguably nothing) about biology careers. This sounds like more of personal decision based on where you see your career headed, and maybe an advantage of a double-major is that you don't have to decide now what you want to do and it will keep your options open. But an extra year or two of college is an expensive price to pay for indecision.

One thing that really helped me was taking the Myers-Briggs test and figuring out my personality profile and relating it to career choices. I did a quick search and turned up http://www.typelogic.com which describes the 16 personality types (I'm a scatter-brained ENTP if that helps). Or there are other personality and/or career assessment tests that may help you. You're paying U of BC tuition -- get your money's worth and visit their career counseling center and see if they have any good tests and if they have anything interesting to say.

You could look into a biostatistics degree, too.

Q: Currently I have my bachelors in civil engineering and my masters in environmental engineering. I have been employed in the engineering field for approximatly one year and am looking into other options which I may be qualified for. I have been researching this field over the web, but have found few references to people in the engineering field which have made the transition. Do you feel it possible to obtain positions within the actuarial field without having taken any of the tests, or is it preferable to take the tests before applying?

A: It is more difficult to find an entry-level actuarial position without an exam than with one. You should at the very least schedule to take an actuarial exam next time, examine the exam syllabus and perhaps buy study materials, too. This will prove to employers your commitment to the profession and improve your entry-level job chances.

Pricing weather derivatives is a cutting-edge actuarial application for which your environmental engineering degree probably would be very useful. Rest assured, plenty of actuaries have engineering degrees.