Post on 31-Dec-2015
description
University of IllinoisUniversity of Illinois Finance 230 – Intro to Insurance Finance 230 – Intro to Insurance
A Career as a Property/Casualty ActuaryA Career as a Property/Casualty Actuary
Presentation byPresentation by
Gail M. Ross, FCAS, MAAAGail M. Ross, FCAS, MAAA
September 14, 2007September 14, 2007
AgendaAgenda
BackgroundBackground
The Role of the ActuaryThe Role of the Actuary
Challenges for the P/C ActuaryChallenges for the P/C Actuary
Exciting AssignmentsExciting Assignments
Useful SitesUseful Sites
Q&AQ&A
Insurance / Actuarial CareerInsurance / Actuarial Career
Began with Travelers Insurance Co.-1976Began with Travelers Insurance Co.-1976
Got into Consulting Upon Becoming an Got into Consulting Upon Becoming an FCAS - 1985FCAS - 1985
Became active in the CAS upon becoming Became active in the CAS upon becoming an FCASan FCAS
Actuaries – “Risk is Opportunity”Actuaries – “Risk is Opportunity”
Actuaries are experts in:Actuaries are experts in: evaluating risk, evaluating risk, designing creative ways to reduce risk potential, designing creative ways to reduce risk potential, decreasing the impact of undesirable events that do decreasing the impact of undesirable events that do
occur. occur.
Actuaries evaluate the financial impact of current Actuaries evaluate the financial impact of current economic, legal, and social trends on future economic, legal, and social trends on future events. events.
We focus on accurate and responsible matching We focus on accurate and responsible matching of risk to price.of risk to price.
Challenges for the P/C ActuaryChallenges for the P/C Actuary
Setting the Price to Charge for the Setting the Price to Charge for the Insurance ProductInsurance Product
Challenges for the P/C ActuaryChallenges for the P/C Actuary
Determining the appropriate level of Determining the appropriate level of reserves to set – varies by exposure:reserves to set – varies by exposure: Short “Tail”– Property , Physical DamageShort “Tail”– Property , Physical Damage Medium “Tail” – Auto LiabilityMedium “Tail” – Auto Liability Long “Tail” – Workers CompensationLong “Tail” – Workers Compensation What Will the Lawyers Dream Up Next “Tail” – What Will the Lawyers Dream Up Next “Tail” –
Asbestos, Pollution, Tobacco, Firearms, MoldAsbestos, Pollution, Tobacco, Firearms, Mold
Challenges for the P/C ActuaryChallenges for the P/C Actuary
Enterprise Risk Management – Helping Enterprise Risk Management – Helping businesses manage businesses manage allall risks facing the risks facing the organization:organization: Hazard RiskHazard Risk Financial RiskFinancial Risk Operational RiskOperational Risk Strategic RiskStrategic Risk
Enterprise Risk Management - Enterprise Risk Management - ExampleExample
Coldhard Steel Company (CSC) Coldhard Steel Company (CSC) manufactures steel products. It’s a family manufactures steel products. It’s a family owned business operating in the owned business operating in the Midwestern US and has a unionized labor Midwestern US and has a unionized labor force.force.
Enterprise Risk Management - Enterprise Risk Management - ExampleExample
Types of RiskTypes of Risk Hazard RiskHazard Risk
11stst Party – Loss to building & equipment due to fire, Party – Loss to building & equipment due to fire, tornadoes, etc.tornadoes, etc.
22ndnd Party – Injury or illness to employees included Party – Injury or illness to employees included work related injurieswork related injuries
33rdrd Party – Slip/falls, product recalls, product Party – Slip/falls, product recalls, product lawsuitslawsuits
Enterprise Risk Management - Enterprise Risk Management - ExampleExample
Types of RiskTypes of Risk Financial RiskFinancial Risk
Foreign exchange risk - CSC has large volumes of Foreign exchange risk - CSC has large volumes of sales in Latin Americasales in Latin America
Commodity risk – changes in prices of raw Commodity risk – changes in prices of raw materialsmaterials
Credit risk – CSC has a large accounts receivableCredit risk – CSC has a large accounts receivable
Enterprise Risk Management - Enterprise Risk Management - ExampleExample
Types of RiskTypes of Risk Operational RiskOperational Risk
Labor relationsLabor relations
Family succession planningFamily succession planning
Assessment of the reliability of machinery and Assessment of the reliability of machinery and processesprocesses
Enterprise Risk Management - Enterprise Risk Management - ExampleExample
Types of RiskTypes of Risk Strategic RiskStrategic Risk
CompetitionCompetition
Regulatory/political issuesRegulatory/political issues
Technological advances that could leave CSC Technological advances that could leave CSC obsoleteobsolete
Enterprise Risk Management - Enterprise Risk Management - ExampleExample
The Casualty Actuary will:The Casualty Actuary will: Assess the hazard riskAssess the hazard risk Work with others to assess the financial, Work with others to assess the financial,
operational and strategic risksoperational and strategic risks Develop models that will integrate all of the Develop models that will integrate all of the
potential risk outcomes/probabilities so that potential risk outcomes/probabilities so that an overall impact on CSC’s results can be an overall impact on CSC’s results can be understood and managed.understood and managed.
Actuarial CareerActuarial Career
Why Consulting ?Why Consulting ? DiverseDiverse ChallengingChallenging Projects Completed in Short TimeframeProjects Completed in Short Timeframe Deal w/ Senior ManagementDeal w/ Senior Management Global OpportunitiesGlobal Opportunities Very Good CompensationVery Good Compensation
Actuarial CareerActuarial Career
Why Why NotNot Consulting ? Consulting ? Long HoursLong Hours Often UnpredictableOften Unpredictable Actuaries in the “Hot Seat”Actuaries in the “Hot Seat”
Exciting AssignmentsExciting Assignments
M&A Due Diligence AssignmentsM&A Due Diligence Assignments
Operational ReviewsOperational Reviews
Reserve ReviewsReserve Reviews
Captive Insurance AssignmentsCaptive Insurance Assignments
Web-Sites and Contact InfoWeb-Sites and Contact Info
Good web-sites to learn more about an Good web-sites to learn more about an actuarial career:actuarial career: www.BeAnActuary.orgwww.BeAnActuary.org www.casact.orgwww.casact.org www.actuarialfoundation.orgwww.actuarialfoundation.org
Actuarial jokes:Actuarial jokes: http://users.aol.com/fcas/jokes.htmlhttp://users.aol.com/fcas/jokes.html
My contact info:My contact info: gail.ross@milliman.comgail.ross@milliman.com