The latest edition of the Jobs Rated Almanac lists actuary as the second best job in the US, out of 250. Jobs were ranked on the basis of six criteria: income, employment outlook, environment, physical demands, security, and stress. In two prior editions actuary was rated as the best job, and in two others actuary was rated second best. Actuary has never been rated lower than fourth. (Biologist is currently number one; lumberjack is the worst.)

    Actuaries sometimes describe themselves as mathematicians who evaluate the current financial implications of future contingent events. We assemble and analyze data and create mathematical models to estimate the probability and cost of events such as death, sickness, injury, loss of property, and lawsuits. We estimate the cost of such claims and then the premium to insure these claims and the amount of funds to set aside to pay them, sometimes decades in the future.

    Actuaries generally specialize in one of the following fields: life insurance, health insurance, pensions, property and casualty insurance, or financial and investment management. Actuaries work for insurance companies, consulting firms, government, organizations that buy insurance or serve the insurance industry, academia, etc. Some actuaries specialize in areas that are not purely actuarial such as underwriting, computers, or presidents of their companies - my own company president is an actuary, as is her boss who is the president of our holding company, as is his boss who is the chairman of our board of directors. A newly emerging specialty for actuaries is Enterprise Risk Management, where one tries to manage all of the company's risks, not merely the insurance risks, including their correlations.

    In addition to looking after the interests of participants of these programs, actuaries provide advice to shareholders, regulators, financial analysts and others. Some actuaries specialize in appearing as expert witnesses in court proceedings; for example, there are actuaries who calculate a fair division of future pension benefits in a divorce case.

    In the US, one becomes a fully credentialed actuary called a Fellow, by passing a series of actuarial exams given by either the Society of Actuaries or the Casualty Actuarial Society. The two societies offer the same exams for Exams 1, 2 and 4. After those exams, you would specialize in either life-health-pension and take the SOA exams, or you would specialize in property-casualty and take the CAS exams. Other countries such as Mexico and India have their own requirements and their own exams; students who wish to become certified in another country should refer to that country's actuarial society.

    There are over 250 credentialed actuaries in Dallas and its suburbs. Actuaries generally work in or near the bigger cities. The largest number of actuarial jobs are in Illinois, New Jersey, New York, and Connecticut, but there are actuaries in every state and in most big cities.

    Starting salaries for recent college graduates are in the $40 and low $50,000 range, with a greater salary for each actuarial exam passed. Experienced Fellows make base salaries in the hundreds of thousands, plus bonuses.

    I personally am a casualty actuary specializing in liability insurance, and I work for a reinsurance company. By reinsurance, I mean that my company insures other insurance companies. For example I do not deal with individuals buying a single auto insurance policy, but rather I deal with a portfolio of auto insurance policies, where the other insurance company wants to lay off the cost of claims say in excess of $1 million. The single largest deal I have worked on resulted in a premium to my company of about $75 million.

    I believe the property-casualty field is the more dynamic of the various insurance fields. In life insurance, people have been dying forever. As casualty actuaries we worry about things such as:

• New exposures to loss such as terrorism, Internet liability, the effect of cell phones on auto accidents, etc., which did not exist 5 years ago the way they do now. Should we plug trip sensors or other electronic devices into your car and collect detailed data on your driving behavior?
• How do we model catastrophic events? Can privtae insurance afford a catastrophic natural or man-made loss that we modeled with 1% probability but that costs in the hundreds of billion dollars?
• As attorneys devise creative approaches to win costly lawsuits, casualty actuaries are responding with new methods to price liability coverage adequately.
• The challenge of setting loss reserves for claims that will be settled decades in the future, and the effect of not estimating these values appropriately, is leading casualty actuaries to explore new methods for estimating future contingencies.
• Are we allocating our costs "fairly," for example between men and women, or between city drivers and suburban drivers? Is it "fair" to use credit-scoring as a rating variable? The trend is to analyze all risk factors simultaneously using multi-variate techniques, rather than analyze each factor separately.
• How much capital does an A-rated insurance company need so its probability of default is acceptably low? How do a company's risks correlate, and can we measure our financial and strategic risks as well as our underwriting risks? How do we make an efficient allocation of our capital and how do measure whether our returns are commensurate to our risk?

    The CAS requirement for Associateship membership is passing exams 1 through 7, attending a professionalism course, and having credit by Validation by Educational Experience (VEE) for economics, corporate finance, and applied statistical methods; for full Fellowship, the requirement is the above, plus passing exams 8 and 9.

    The SOA requirements for Associateship and Fellowship is similar to the CAS, although SOA requires one fewer exam.

    The customary way to get VEE credit is to get a grade of B- or better in courses approved by the SOA. For economics, this requires one semester of microeconomics and one semester of macroeconomics. For corporate finance, this is generally the second semester of a two semester sequence. For applied stats, this is one or two courses in regression analysis and time series. Due to the initiative of Professor Efromovich and others, the following UTDallas courses are approved by the SOA for VEE:
       Economics: ECO 2301, and either ECO 2302 or MECO 6303.
       Corporate Finance: FIN 6301 and FIN 6310.
       Applied Stats: either STAT 3355 or STAT 6337, and either STAT 4382 or STAT 6347.

    When hiring recent college graduates, we look for actuarial exams passed as the most important criteria and the potential to pass the remaining exams. Your particular major is less important than the potential, although if you are an English major you will have a hard time convincing us of your potential. We like computer proficiency in EXCEL and a computer language, and we like good writing and communication skills. Often you will be communicating your conclusions to someone who is not an actuary.

    You should try to pass at least one actuarial exam while you are still in college, and you should take courses that fulfill the VEE requirements. Besides math and statistics, some good courses would be accounting, business law, and introduction to insurance. Finance is being increasingly important, and we are adding more finance topics to several exams. Our exam two will have much more finance in 2007 than ever before.

    US citizenship is generally not a requirement for employment.

    Many universities offer a student-run actuarial club. These clubs encourage relationships among actuarial students, encourage relationships between students and local actuaries, provide resources for students taking actuarial exams, invite local actuaries as speakers, provide social events, publish newsletters, provide mentoring and employment advice, etc. If there are some interested students who are willing to take the initiative in starting an actuarial club, I would be happy to help.

    Here are some websites you may find useful:

    I have been an actuary for over thirty years. I have volunteered through the Casualty Actuarial Society to be the actuarial liaison to UTDallas. I am available by e-mail to discuss the actuarial profession, answer questions about the actuarial exams, make suggestions about courses, and help students contact potential actuarial employers.