Alumni

Paul Deemer’s Tips for the Aspiring Actuary

Paul Deemer, B.A. ’96, recently became a Fellow of the Casualty Actuaries Society. He visited campus on March 31, 2005 to share his thoughts on being an actuary with us. What follows is a brief summary of what he said. If you would like to ask Paul additional questions, you can email him at paul.deemer@acuity.com.

Key Points:

• Think about your career path before you apply for jobs.

I think this is a very important, and everyone should give it some thought. You need to consider property and casuality, health, life and pensions whether primary, reinsurance or consulting.

• Be selective in your job search.

There are real differences in the different career paths, and you should be in a position to choose what you want.

• Avoid consulting as a first job.

Consulting firms typically will not provide as much support for taking exams, which should a high priority for you when looking for a job. Further, consulting work can run in severe “streaks” and insurance work tends to be more “regular” which is more conducive to a study regimen. Other firms will provide regular study time on the job (say, one day a week), and pay for exam fees and study materials.

• Take the exams seriously.

Early in your career you will have work responsibilities that are much less than later. You early years are not to be wasted! Focus on passing exams.

• A passed exam will translate into job offers.

Having an exam under your belt makes a dramatic difference in whether you will get an interview, and usually leads to multiple job offers. You are much less likely to get an interview if you do not have an exam, although some firms will hire with the expectation you will pass the first exam shortly.

•Keep making progress on the exam track -- try to avoid taking a break.

Some people take a break from exams when they become associates in an actuarial society, and never seem to get around to the remaining exams. Your work and life responsibilities are going to get more complicated instead of less as life goes on, so there is no better time than the present.

• Don’t be discouraged if you fail an exam.

It is not unusual for someone to fail an exam along the way, for various reasons. You can always take it again. Some people find certain exams easier than others, and you do not have to take them in strict sequence. Take the ones that are easier for you first. I did.

Q & A:

Q. What are the differences between the career paths that you outlined?

A. Primary-Reinsurance-Consulting. Primary and Reinsurance involves working for insurance companies. Consulting generally involves working for insurance and non-insurance clients.

Property and casualty is a growing field, not so much in personal property and home insurance but in commercial insurance lines. The life insurance area is a mature market, and contracts are fairly standard. Recently, it has made strides in moving into the world of investments.

Consultants tend to do the overflow work from primary and reinsurance firms, but it is essentially the same kinds of work done in the other firms. You tend to be more of a generalist. Since consultants only make money by billable hours, instead of from insurance premiums or investments, they tend to work longer hours and they do not emphasize passing exams as a crucial part of your job responsibility.

The reinsurance business requires more travel because it is international in scope.

Q. Can you tell us a little bit about your career path?

A. I have specialized in property and casualty insurance. I graduated from Eastern with a degree in Actuarial Science in 1996. I had already passed the first exam, and worked about five years for Kemper in Chicago and later in Columbus. I then worked at Amerisure for a couple years. I joined Acuity in 2002. My current position involves a lot of research, and I can work from my home office a good deal.

Q. How did you find the exams?

A. I thought the first four exams were harder, mostly because they were a bit dull and theoretical and the answers were given in an objective format (multiple choice). I thrived on the later exams because they were applied and more interesting and answers were essays. (Except insurance accounting, which is pretty dull… if they didn’t put it at the end of the exam sequence, too many people would drop out!) There are people who have the opposite experience. The later exams are more reflective of the kind of work you will actually be doing.

Be sure to pay attention whenever there are changes to the examination sequence. Even though I had passed the earlier exams, I had to take an additional exam because of the way credits transferred into the new system.

Q. Do firms compensate you for passing exams?

A. You can expect to receive a raise of a few thousand dollars every time you pass and exam, often retroactive to the date you took the exam.

Q. Do insurance companies fire you if you miss or fail an exam?

A. There is a strong expectation that you will continue to make progress, but it is not usually tied to a fixed schedule, and it does not hinge on a single exam. If you were not making progress you might lose your study time during the workweek. One firm actually introduced a category called “para-actuary” for people who stopped taking exams past a certain point, but who wanted to stick around doing the same work. In most cases, though, the relationship with your firm would become unsatisfactory (for both sides) if you failed to make progress over a long period of time.

Q. What is the significance of being an Associate or a Fellow?

A. According to insurance regulations, only an Associate (or Fellow) can set loss reserves. I would strongly encourage you to try to become a Fellow as quickly as you can. You will have more job opportunities available to you. Also, once you are a Fellow you do not have to worry about changes to the exam sequence, which can force you to take extra exams if the requirements change while you are an Associate. Fellows are also involved with setting standards for the profession. For example, I am going to be involved with the grading of one of the exams in the next cycle.

Q. The Society of Actuaries and Casualty Actuaries Society have different exam requirements. Which track should I take?

A. Right now (2005), the CAS recognizes SOA exams but the SOA does not reciprocate on exam 3. For that reason, you should plan on taking the first four exams with the SOA.

Q. What is the AAA?

A. The American Association of Actuaries. Its main function is policy, communicating with the government specifically. Another very important function is disciplinary – setting guidelines for ethical conduct and making sure actuaries behave in an ethical way. This can range from general observance of laws governing the finance world as well as gross abuse of actuarial techniques and methods.

Q. What computer skills will I need on the job?

A. The most important application is a spreadsheet program, e.g. Excel. Databases like Access, and of course Word, are also important. It does not hurt to have additional background in computer programming.

Q. What other things are firms looking for, besides exams?

A. Communication skills are a must. You will be working in a business environment, and there will be many people who need things explained to them in a non-technical manner. Critical, creative thinking ability is also highly valued.

Q. Would a degree from Eastern be less competitive than a degree from other schools?

A. Where you received your degree really does not matter. If you pass exams, employers will know you can handle the job. There are schools that produce a lot of actuaries, e.g. Waterloo, Drake, and Georgia State, but you would not be at a competitive disadvantage with their graduates. Actually, not being from one of those schools may differentiate you from this year’s “crowd.”

Q. What are some of the trends you see in the industry?

A. Casualty insurance is experiencing the most growth of the various industry sectors, and I think that trend will continue. Asset risk management is becoming more important. We have also had to reexamine some of our standard assumptions in the wake of 9/11.

Q. Will I have to travel much?

A. It depends on where you work. There is moderate travel in most jobs. There is international travel for people working in the reinsurance business. The big centers for reinsurance are Chicago, New York, London, and Hong Kong.

Q. Is it a good idea to get an internship before graduating?

A. It certainly cannot hurt, but it is not essential.