Imagine Magazine - Johns Hopkins - November/December 2013 - (Page 40)

exploring career options Actuary Interview by Amy Entwisle Rita Zona Principal, Actuarial, Risk & Advanced Analytics Deloitte Consulting LLP What do farming, the travel industry, and municipalities have in common? They all have the potential to fail-or thrive-depending on the threat of climate change and how they respond to it. As an actuary, part of Rita Zona's job is to help groups like these, and the companies that insure them, understand the risks climate change poses to them and how to adapt their practices to address these risks. How did you become interested in actuarial science? When I was in college at Northwestern in the mid-1980s, they didn't even offer a major in actuarial science there. I was majoring in math, but I wasn't sure what I was going to do with it. I was thinking I might be a teacher or a statistician, but then an actuary came to speak to one of my classes. The actuarial field sounded really interesting to me because it pulled in not only math and statistical skills, but also business and communications skills. How did you break into the field? In order to be a credentialed actuary, you have to pass a series of exams, but you can be hired for a low-level actuarial position if you've already passed just one or two of them. After graduation, I got a job at an insurance company, and I was working while I was studying for the exams. Most companies give you some time to study, but each exam requires an estimated 300 hours of study as preparation. I encourage young actuaries today to focus on getting the exams done, and even to start taking them while they're still in college, because it's difficult to be working full time and trying to study all those additional hours in order to pass the exams. After the first four exams, you choose your area of specialty. For example, you can choose to be a life 40 imagine actuary, or a property casualty actuary. Each specialty requires that you pass two additional exams to become credentialed as an Associate. Then, to become a Fellow, you have to pass three more exams. Can you talk a bit about the different types of actuaries and what they do? Actuaries are central to the insurance industry. Most work with insurance companies or businesses that self-insure. Life actuaries refer to mortality tables, which show the mortality rates of different populations and segments of populations, to try to predict the cost of life insurance. Health actuaries deal with the cost of healthcare insurance and what it costs to keep people healthy. Then there are property casualty actuaries, who are also known as general insurance actuaries or non-life actuaries. That's my discipline. Property casualty actuaries deal with workers' compensation insurance, general liability insurance, and auto insurance. We determine how best to price the insurance and figure out how much money insurers need to have in reserve to pay claims. If we're evaluating auto insurance costs, we look at the historical data around the number of claims that have occurred for a particular model of car, the costs associated with those claims, and the average costs associated with those claims. Given that we now have a certain number of cars insured, we can project what the cost to the insurer will be. If you have an automobile accident and you're hurt and your car is damaged, the cost of the car is a fairly easy thing to determine. But figuring out how much it'll cost to get you better is a little more undetermined. Maybe you have an ache in your neck that, down the road, becomes a stress fracture. We use statistics to determine what the ultimate cost of claims in the aggregate would be. Actuaries try to put a price tag on risk. The interesting thing is trying to consider all the variables. How do you go about determining risk? We gather as much data as we can get our hands on about the particular kind of risk. To assess the risk to insurers of people slipping and falling in grocery stores, for example, we would gather historical data on the frequency of falls and what the costs associated Nov/Dec 2013

Table of Contents for the Digital Edition of Imagine Magazine - Johns Hopkins - November/December 2013

In My Own Words
Interested in Econ
The World in Numbers
Reckoning with Randomness
Elliptic Curves
A League of Our Own
More Than Math
Developing Your Numbersense
Where Math Meets Imagination
Selected Opportunities & Resources
Dancing in the Footsteps of My Ancestors
Off the Shelf
Word Wise
Exploring Career Options
Planning Ahead for College
Students Review
Mark Your Calendar
Knossos Game

Imagine Magazine - Johns Hopkins - November/December 2013