How To Enter An Actuarial Career

Basic Requirement To Be An Actuary:

Q&A

"Do I need to major in Actuarial Science?" "No."

"Do I need to major in Math or Statistics?" "No."

"Do I need to start in my first job?" "No."

"Do I like math and enjoy doing it?" "Yes."

The Fundamental Question and Commitment:

The fundamental question - what type of person do you wish to become?

If you enjoy doing math, then you should think about the fundamental question above and ask yourself whether you would be interested in doing a job related to the contingent benefits for people. In other words, it's about helping to secure people's or their family's benefits when certain risks occur in the future. Is this aligned with the type of person you want to be? If the answer is yes, then you may check if you would enjoy working in a corporate business environment. This is the environment most actuaries would work in (a small percentage may work in the academic or government environment). If the answer is yes, then the next very important question is whether you are willing to commit to finishing the actuarial exams.

Finishing the series of actuarial exams is a big commitment. It usually takes an individual 5-10 years to finish. The difficulty of the exams gradually increases. After finishing all exams, you accomplish the Fellowship designation. This is a "must-have" if you would like to move up to a senior position in your career. If for some reason you don't want to finish all the actuarial exams, you can finish around the middle of the journey to get the Associateship designation. There are still good career opportunities for Associate actuaries. If you don't foresee yourself at least becoming an Associate, then I would not recommend you enter the actuarial career in the first place. Every company would want their actuarial students to pass exams and would only offer more opportunities to those who consistently pass exams. Therefore, whether you are willing to commit to finishing the actuarial exams is a very important question to ask yourself before entering this career.

If all the answers are Yes in this section, then you can move on to the next section below.

Q&A

"Am I interested in a job related to contingent benefits for people?" "Yes."

"Would I enjoy working in a corporate business environment?" "Yes."

"Am I willing to commit to finishing actuarial exams or at least half of them?" "Yes."

Actuarial Exam Pathways and Designations:

Professional Organizations

There are many professional actuarial organizations in the world. You can search online to find out the organization that supports the actuarial career in your country. In the US, two professional organizations offer two levels of actuarial certification: Associate and Fellow. They are the Casualty Actuarial Society (CAS) and the Society of Actuaries (SOA).

• The CAS certifies actuaries who work in the property and casualty field. This includes homeowners insurance, automobile insurance, commercial property insurance and workers' compensation insurance.

• The SOA certifies actuaries who work in life insurance, health insurance, retirement benefits, enterprise risk management (ERM), finance and investments.

Candidates must pass a series of actuarial exams and take seminars on professionalism to complete the Associate or Fellow designations. Below is another important organization:

• The American Academy of Actuaries (AAA) is also a professional organization based in the US, however, this organization does not certify actuaries but focuses on setting qualification, practice and professionalism standards for actuaries certified by the US actuarial organizations.

In this blog, the SOA pathway in the life insurance track is used as an example. Under SOA, the Associate designation is Associate of the Society of Actuaries (ASA). The Fellow designation is Fellow of the Society of Actuaries (FSA). Besides ASA and FSA, SOA also offers the Chartered Enterprise Risk Analyst (CERA) credential. A CERA has demonstrated knowledge in risk identification, measurement and management within risk-bearing enterprises. The following sections show the SOA requirements for ASA, CERA and FSA. Please note that the exam requirements may change over time. Please always refer to the Education & Exams under SOA website https://www.soa.org for the latest requirements.

ASA Pathway

The picture below is the ASA pathway from SOA's website. Here is the link https://pathways.soa.org/designations/asa

• Exam - See those in blue. There are six exams to finish within the ASA designation. These examine the candidate's thorough knowledge of interest theory, calculus, probability, statistical methods/models for analyzing data, basic methods of calculating premiums and reserves and demonstration of using analytic techniques to solve business problems. You can click the link above and click each exam to see the full details of the requirements and the formatting of the exam.

• VEE - See those in green. VEE stands for Validation by Educational Experience, which includes three subjects. They are Economics, Accounting and Finance and Mathematical Statistics. These are not formal exams required but are the credits required to add to the records. You can earn the credits by submitting the evidence (i.e. university/course provider, course number, date, score) that you have taken the course. You must pass two actuarial exams before applying for the VEE credits.

• E-Learning - See those in yellow. These are the modules you can study online and work on the end-of-module assessment from home. The modules are designed to have real-world scenarios with business problems where you can apply what you learn from the exams or VEE to solve the problems. The end-of-module assessment is also a good practice in writing an actuarial memorandum, which is an essential formal communication or documentation at work. Note that the Fundamentals of Actuarial Practice (FAP) course includes four modules and one final module. Each of the other three courses has one module.

• Seminar (APC) - See the block in red. The Associateship Professionalism Course (APC) is the final requirement for ASA designation. It covers professionalism, ethics and legal liability through case studies based on actual business situations. It is offered through virtual or in-person sessions.

FSA Pathway

The pictures below are related to the FSA pathway from SOA's website. Here is the link https://pathways.soa.org/designations/fsa. The first picture is the general FSA path for six different tracks. The second picture is an example that shows the specific requirements for the Individual Life Insurance and Annuities track.

• FSA Tracks and Exams - Once the ASA requirements are done, a candidate can move on to do the FSA requirements. There are six tracks to choose from (see the blue strips in the middle of the first picture below). These cover ERM, Finance and Investment, Individual Life Insurance and Annuities, Retirement Benefits, Health and General Insurance. Candidate usually chooses the one that is closest to their current work or they may foresee themselves working towards it in the future. The example of the Individual Life Insurance and Annuities track shows that there are three modules and three exams to finish.

• DMAC - This is the Decision Making and Communication Module focusing on written and oral communication skills and decision-making skills that can be applied to solve business problems.

• FAC - This is the Fellowship Admissions Course that is the final requirement to attain the FSA designation. The course covers education sessions on solving business problems, professionalism and oral communication/presentation. The intent is to prepare candidates to effectively deal with situations they may confront as they progress in their organizations.

CERA Credential

The requirements for CERA are similar to ASA except that the two exams under Actuarial II and the e-Learning course of Advanced Topics in Predictive Analytics (see the picture above) are replaced by the Enterprise Risk Management (ERM) Exam and the Enterprise Risk Management Module. Here is the link for the details: https://www.soa.org/education/exam-req/edu-cera-req/

High-Level Picture of FSA Pathway for six tracks:

Example of FSA Exam and Module Requirements for Individual Life Insurance and Annuities Track:

Job Interviews and Exam Progress:

Entry-Level Actuarial Job Application

• Education - A bachelor's degree is required. No requirement for the major.

• Exams - Usually require passing at least two exams.

• Internship - This is not a requirement but having internship experience with an insurance company can largely increase the chance of getting the entry-level job offers. When evaluating the candidates for the entry-level positions, some companies put more weight on this than the number of exams passed. If you are a college student and plan to enter into an actuarial career after graduation, I would recommend you pass at least two actuarial exams and get internship experience before graduating.

• Resume - The resume formatting is flexible but usually at least includes the following:

  • A brief summary - This could include your interests, strengths, character, etc.

  • Education and exam passed - This includes major, degree and what actuarial exams have been passed or are being studied.

  • Working Experience - This includes internship experience (if any) and any past experience in the actuarial or non-actuarial fields. The experience should include specifics covering what projects, what to solve, tools used, interaction with others, results of the projects and feedback. The message to deliver to the interviewer is your strength and how your experience fits into the position. Therefore, when writing this part, this should be kept in mind.

  • Special Skills - This can be a summary of computer skills, software used, communication skills and hobbies.

• How to Apply - Getting the interview opportunities may not be easy at the beginning. Below are some suggestions:

  • Write up your resume specifically for each job position you are interested in. This means do not send the same resume to all. You should read each job description very carefully. Evaluate how your background or experience can be a good fit for the position, and then write up your resume to demonstrate it. Using similar terms (based on facts) found in the job description would be helpful. Once your resume is submitted to the company, usually HR will review it first, and if okay, they will pass it on to the hiring manager. HR staffs are not actuaries so when they review the resume, they will try to find the commonalities between the job description and the resume. Sometimes this means they will find similar terms or keywords. Therefore, if you understand the needs of the position and write up your resume to demonstrate a good fit, it will greatly increase your opportunity to have an interview.

  • Utilize actuarial recruiters to find jobs. Recruiters may have connections with openings that you do not know. They can also provide insight and help to negotiate benefits with the company. Recommend doing the job search yourself and using the recruiters at the same time.

  • Follow up with the companies or recruiters on the jobs on a regular basis after submitting the applications. Build a workbook listing the status of each job applied.

Job Interviews

• Interviewers - The interviewers usually include HR, the hiring manager, one or two members of the hiring team and maybe a member from another team. Most of them would be actuaries. Each interview session usually lasts 45 minutes to one hour.

• Method - The interviewers often use behavioral questions to evaluate the competence of the candidate. The questions could be raised differently from different interviewer's perspectives, however, what they want to know is the same. Besides seeing what is on the resume, they want to find out what your characters are like, your communication skills, evaluate if you are a good team player and ultimately if you are a good fit for the job. I recommend that you prepare several stories using the SHARE method before coming to the interview. SHARE stands for Situation, Hinderance, Action, Results and Evaluation. Please see below:

  • Situation - Describe the situation, meaning the background of the story (a project) and what problem to solve.

  • Hinderance - Difficulties you or the project team experience.

  • Action - Describe the actions you have taken to solve the problem. This can include the tools, software you use and the interactions with others. The initiatives you perform.

  • Results - What is the ending result? Is the problem solved due to the actions taken? Is the result communicated to others through writing up a report or presentation?

  • Evaluate - What are the feedbacks on your performance of the project? What have you learned? Tell the interviewer how you can apply what you gain from the project to the company or the job you apply for.

• Be aware of the importance of soft skills - I have done many interviews from a hiring manager's perspective in my career. Evaluating whether a candidate is a good fit in such a short time is not easy. The consideration usually puts more weight on soft skills (e.g. characters, communication and interaction) than hard skills. This is because the hard skill is like the the portion of an iceberg that is above the sea which can be seen easily but is only 1% of the iceberg. the soft skills are like the portion of an iceberg that is below the sea, which cannot be seen easily but is 99% of the iceberg. The soft skills are very important. It determines the potential and thus the long-term career path of the candidate.

Study Program and Exam Progress

• Study Program - Most insurance companies have a study program that supports the actuarial students in the company to pursue actuarial designations or credentials. Once you start the entry- level job, you can start to utilize the program to make exam progress. The study program mainly provides the following benefits and please note that every company's program is different:

  • Study Time - The study time depends on whether it is the first time taking the exam or the second time...Usually, the first time is granted the most for study time.

    For example, it could be 25 hours for each exam hour for the first time, then decrease to 15 and 0 hours per exam hour for the second and third time. If the exam is a 3-hour exam, then the total study time for the first time is 75 hours. By getting to the third time for the same exam, if the actuarial student still does not pass, the student may be out of the study program and will be re-evaluated to get in later.

    The study time is also subject to the workflow. Building a study schedule and discussing it with your manager is important to make sure the study time can be implemented consistently.

  • Exam Fees/Study Materials and Seminars - The company usually covers all the costs for exam registration fees and study materials per the exam syllabus. A virtual or on-site seminar for the exam study is helpful but it may or may not be covered. Double check with your manager to understand the cost and discuss the feasibility of taking it based on workflow.

  • Incentives - The company would want their actuarial students to finish exams quickly. They are generous with the incentives. This includes a first-time pass bonus and salary increase. The bonus usually stays the same for each exam. The salary increase could be several thousand dollars depending on the difficulty and length of the exam. There is also a salary increase for finishing modules or attaining ASA and FSA designations.

• Exam Progress - It is not easy to manage passing exams and a busy workflow at the same time. Below are the suggestions:

  • Intrinsic Motivation - Always go back to the fundamental question as raised at the beginning of this blog - What type of person do you wish to become? Let this drive your passion at all times, but not the exam result, designation, salary increase, job promotion or reputation. People think that they will become the person they wish to be when getting the title or certificate at the end. Those do not define you. You are becoming the person through doing right now at where you are. Doing shapes up who you are, your being, and your being brings out more doing. It's a loop. The title, certificate or prize received in the journey is a by-product. Therefore, act now.

  • Plan and Study Consistently - build habits to study persistently bit by bit and day by day. This starts with establishing a study plan. Negotiate and get approval from your manager to implement the plan. The key is to study at work or home consistently before the exam. Repeating actions helps to build habits which in return makes it easier to do. Progress made every day counts. It may seem to be slow, but the actual effect is exponential as time passes.

  • Find Study Group - Finding someone who is on the actuarial path and can discuss with you related exam topics will be encouraging and helpful. You may find this connection within your company or through attending seminars or through online actuarial communities. For example, the Actuarial Outpost Forum online is a website I visited frequently when studying for exams. You can post your questions by the specific exam subject, and someone in the community will kindly answer the questions.

  • Doing the above, then the satisfying exam result and accomplishing ASA or FSA designation will come naturally as by-products.

  • Difficult Time - There may be a time you feel frustrated probably because doing the same exam several times or probably because of the stress from work or the pressure from both of exam and work. Don't give up. As the cartoon picture shows at the beginning of the section, all of your past efforts count, and the turning point and success may be just around the corner. I would like to share with you a graph I learned from the book Atomic Habits (authored by James Clear). Please see below. At the beginning of doing a project, our expectation of result is usually higher than what actually happens, which results in the shaded disappointment area. However, after a certain point, the actual result could grow exponentially higher than our linear expectation, and the full value of the past efforts will be revealed. Therefore, just keep moving.

An Upfront Reminder - Don't Give Up

Once you pass two actuarial exams, you can start to apply for the actuarial jobs. The very first job for the actuarial career is called entry-level job. Once you start to work in an insurance company, the company usually offers a study program that supports actuarial students to finish exams while working in the company. Applying for jobs or working in a job and making exam progress at the same time is not easy. I would like to share a cartoon picture below with you before introducing more materials in this section. The message here is "Don't give up". You may feel frustrated at some point but believe that all your past efforts are worth, just keep going, the turning point and success could be just around the corner.

Cartoon source: www.cartoonstock.com, purchased.