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Actuary A Career Exploration Activity

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#SBCareerReadyHS

Have you ever heard people discuss these questions?

  • Why is my car insurance so high?
  • Why does the cost of my health insurance keep going up?
  • How can my cell phone company charge less for the same services on plans that have more lines?
  • Why is my neighbors home owners insurance more expensive than mine?
  • Why have mortgage interest rates dropped so much?
  • Why do banks pay so little interest on a saving account but pay more on certificates of deposit?

Actuaries have a direct impact on the answers to these questions and more. Continue this activity to learn more about this important career.

So, what is an Actuary?

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.

An actuary must analyze a variety of variables and data points to determine the cost of car insurance. See some of the variables and data points below.

Car:

  • Make and model
  • Color
  • Cost of repairs
  • Frequency and severity of accidents
  • Frequency of theft and vandalism
  • Value of the car

Driver:

  • Age
  • Gender
  • Driving record
  • Number of years licensed
  • Grades in school

Location:

  • Zip code of where the care will be kept
  • Crime rate within that zip code
  • Frequency and severity of accidents in that zip code
  • How far the car is driven to and from work and location of the work

Purpose of use:

  • Daily commute
  • Leisure

Once the variables and data points are analyzed the actuary can develop a model that will allow the insurance company to provide individual prices for each customer. The actuary's job is to ensure that the insurance company can cover all possible costs while still making a profit.

Think about it......

Using the concept applied to car insurance identify variables and data points that would need to be analyzed to develop a model that would assist a health insurance company set prices.

Look at each variable and data point and explain how it could impact the over all cost of the health insurance.

People who enjoy actuarial work have strong interests in careers that are:

  • Conventional - data, detail, and regular routines
  • Investigative - ideas, thinking, and figuring things out
  • Enterprising - leading, making decisions, and business

Click the link below to see if your interests match.

Actuaries Work Anywhere there is Risk to be Managed

Traditional Fields of Actuarial Work

  • Insurance (all types) is number one
  • Financial services, such as banking, investment management and stock markets in developing economies
  • Technology, e-commerce and business start-ups of all sorts
  • Environmental causes, climate change and weather risk management
  • Transportation, such as shipping and air travel
  • Energy, such as utilities, oil and gas
  • Government institutions, social programs and other groups that help shape legislation

Non-traditional Fields of Actuarial Work

  • Business Analytics, where actuaries work on predictive analytics, predictive modeling and data mining
  • Enterprise Risk Management, where actuaries provide tools, techniques and perspective to manage operational risks at an enterprise or corporate level
  • Senior Management, where actuaries provide broad business and management oversight for an organization’s most senior decision makers
  • Investments and Fund Management, where actuaries focus on asset risks for asset managers but also contribute in areas such as hedging strategy, derivatives structuring and structured finance
  • Banking and Financial Services, where actuaries help banks and financial services companies with product portfolio, capital management and risk analysis
  • Environmental Finance, where actuaries apply finance techniques and practices to environmental issues
  • Wealth Management and Financial Planning, where actuaries contribute skills and expertise to wealth management firms and individuals (rather than to insurance companies)
  • Health and Retirement Financing, where actuaries offer advice on aspects of social insurance including funding levels and population projections
  • Sales and Marketing, where actuaries help set policies, messages and compensation levels for those directly involved in marketing
  • Entrepreneurial Actuaries, which represents a wide range of opportunities for actuaries who desire to set up and run their own business

The Path to a Career is Not Always Straight....

Watch the video below to learn how a variety of people found their career as an Actuary...

Online Resources

Practice:

These free courses provide the opportunity to learn and practice common skills used as an actuary.

Learn more:

This course is free, but you will be required to register. If you want to earn a certificate, there is a cost. Discuss this opportunity with your parents before proceeding.

Professional Organizations:

Interview with an Actuarial Intern

  • 00:00​ Intro
  • 00:57​ Tell us about yourself
  • 01:42​ Choosing actuarial profession
  • 02:38​ Actuarial internship experience
  • 04:30​ Volunteer experience (IABA)
  • 06:25​ Tips to get the first actuarial job or actuarial internship

Learn all the details about Actuarial Careers....

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