# Actuarial Information

## What do actuaries do?

Actuaries are business professionals concerned with the design of insurance, pension and similar financial programs. Their main objective is to ensure that these programs are financially sound. Through the application of probability, statistics, risk theory and principles of finance, actuaries are able to calculate future risks associated with insurance, annuity and pension programs.

To accomplish this, actuaries must first assemble and analyze data from which mathematical models are developed. Models of probabilities of sickness, death, accident etc. and also tables of probabilities of unemployment etc. are constructed. After all probabilities and the costs to the company are calculated, the actuary is then able to determine the premium rates which will cover the expected insured loss.

For example, before an insurance company insures the health of an individual or issues a policy on a car, the actuary helps to determine the risks of sickness or accidents that will result in claims. The actuary then makes sure that a fair price is charged by the company which is enough to pay claims and also for the company to operate profitably as a business.

Actuaries may also use mathematical and statistical skills to provide legal evidence on the value of future lost earnings, such as the value of potential lifetime earnings lost by a person who has been disabled by an accident. Keeping informed about general economic, social and legislative developments are a must for actuaries who work in several areas in varying environments.

```     Excerpt from:'Picture yourself making a terrific choice! The
Actuarial Profession'  -  Society of Actuaries

While actuaries work on all sorts of projects in diverse
business environments, they have one thing in common: They use
quantitative skills to analyze and plan for future financial
situations.
Using these skills, actuaries may be involved in projects as
varied as:
Placing a price on a company about to merge with another
Estimating the impact of seat-belt laws in automobile
losses and determining appropriate rate discounts.
Projecting Social Security benefits so money can be
collected to pay workers planning to retire in 20 years.
Determining why malpractice insurance costs for doctors
are skyrocketing.
Projecting what the AIDS epidemic will cost life and
health insurance companies in five, ten and twenty years.
Determining the price for a liability policy.
Collecting and investing enough money so that an
insurance company can pay claims.
Designing a new retirement program for a company.
Calculating the price to charge for insuring a satellite
launch.
Estimating the benefit costs for a labour union contract.
Answering questions like "What risks are insurable," and
"How much and where should companies invest money?"
Estimating the costs of a major earthquake on the West
Coast.

```

## Where do actuaries work?

```Most actuaries work for life,health and property/casualty INSURANCE
COMPANIES. In these companies, actuaries are involved in almost
every aspect of the business and their judgement is relied on
heavily to ensure financial security. There is a significant
percentage of actuaries in executive positions where they help to
determine company policies. Company actuaries may also be found in
pension planning, group underwriting, investment and other
departments due to the broad knowledge of insurance acquired.

Actuaries may also be involved in a wide range of activities in the
CONSULTING field. Some operate their own private practice, while
others work for actuarial consulting firms. Consulting actuaries
work with and provide advice for a fee to financial institutions
and to the chief operating officers and often chief executive
officers in risk management and health care fields. Pension
consulting is an important field that has grown over the years.

A growing number of actuaries work for the federal and provincial
GOVERNMENT.Actuaries work as senior officials with the Canadian
Department of Insurance and other government bodies. These
opportunities usually deal with a particular pension plan or
insurance such as the government welfare plan.

Significant and rewarding opportunities can also be found in
EDUCATION. Many actuaries hold positions on the academic staffs of
universities.

In many organizations, actuaries serve as key financial people,
including large industrial corporations, public accounting firms,
labour unions and fraternal organizations.

A list of the major employers such as insurance companies,
consulting groups etc. is available from the CANADIAN INSTITUTE OF
ACTUARIES.
```

## How to prepare for an actuarial career

The basic building block of an actuarial career is a sound knowledge of mathematics/statistics. However, of equal importance to an actuarial career is the ability to communicate effectively, to be able to work well with people and a practical business sense.

University:

```Courses in calculus, linear algebra, statistics, operations
research, numerical analysis and theory of interest provide
reasonable preparation for the early professional examinations
(mentioned below).

Career options can be increased by taking accounting, economics,
finance and computer science courses because you are preparing for
a career in business. Since effective communication skills (oral
and written) are necessary, courses in english and business
communication may also be valuable.

While most actuaries have mathematics, statistics or actuarial
science degrees, some companies may hire individuals with
background in the essentials (above) is enough . By passing the
necessary beginning examinations (mentioned below), one is in a
favourable position to apply for entry level jobs in the actuarial
field.
```
Professional Recognition:

```In North America, the Society of Actuaries (SOA) and the Casualty
Actuarial Society (CAS) grant professional recognition to actuaries
who pass a number of qualifying examinations. The Society of
Actuaries members are involved in the areas of life and health
insurance, pension planning and employee benefits. The Casualty
Actuarial Society members are involved in the areas of property and
casualty insurance covering such risks as fire, medical malpractice
and personal injury liability.

The professional examinations are divided into two parts - the
Associateship level exams and the Fellowship level exams. Most
students complete a few of the Associateship level exams while in
college/university. Further information regarding the Associateship
level exams can be obtained from the SOCIETY OF ACTUARIES.

```

from professionals in the field

```-    Try to take the actuarial exams as early as possible,
structuring your university curriculum so that you may pass
exams as they come along. It's good to graduate with at least
two or three passed exams. Of course the more exams you pass
-  the better!

-    Try to get actuarial internships in the summer. Getting one
at a life/health insurance company and one at a
property/casualty company will give an idea which specialty is
more appealing to you. Talking to actuaries in various
business environments is also another possibility.

-    If you are unsure whether you would want to specialize in SOA
courses leading to a career in life/health insurance or
pensions, or in CAS courses leading to a property and
casualty insurance career - It is advisable to take courses
# 100, 110, 120, 135 and CAS 4B . Both the SOA and CAS offer
credits for these courses and you would be sure to receive
credits for the exams passed regardless what option you may
choose later.

-    Select as many business related courses while you are in
university such as economics, accounting, marketing, business
management and finance. Remember,"...actuaries are, first of

-    The exams are difficult and it takes determination and
commitment. DON'T BE DISCOURAGED!! The road to an
actuarial career may be a long, arduous one BUT the actuarial
career is a very interesting and rewarding one  -  the
opportunities to grow into a responsible position are great.

```

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These are some of the major organizations representing actuaries:

Suite 820
360 Albert Street
Ottawa, Ontario
K1R 7X7
Telephone: (613) 236-8196

SOCIETY OF ACTUARIES (SOA)
Suite 800
Schaumberg, IL 60173-2226
U.S.A
Telephone: (312) 706-3500

CASUALTY ACTUARIAL SOCIETY (CAS)
One Penn Plaza - 250 W. 34th Street
New York, New York 10119,
U.S.A
Telephone: (212) 560-1018