Actuarial Training at Stony Brook
Who determines what life insurance or automobile insurance should cost for a member of a particular group? Who decides the amount a company should contribute annually to its pension fund? What profession has often been ranked Number 1 by recent editions of the Rand- McNally Guide to Professions? The answer in all cases is: an ACTUARY, a specialist in the mathematics of risk analysis and planning. Because the employment of these well-paid professionals is expected to grow at an above average rate for many years, the actuarial profession is an excellent career choice for those who enjoy and excel at applied mathematics.
Approximately half of all actuaries work in the insurance industry. Of these, most work for life insurance companies. Others specialize in property and casualty insurance. Still others specialize in pension plans or other employee benefits. Actuaries employed by the Federal government oversee particular insurance or pension programs. State governments employ actuaries to regulate insurance companies and to handle unemployment insurance or workers' compensation problems. Consulting actuaries are hired on a fee basis to provide advice to clients ranging from corporations to labor unions.
Since most actuarial work involves assembling and analyzing statistics to calculate probabilities, a strong background in these areas of mathematics is obviously essential. Courses in finance, accounting, and computer science are also useful. Because actuaries gather statistics from many areas of society, they must become knowledgeable about economic, social, legislative, and health trends. Many actuaries advance to management positions involving marketing, advertising, and corporate planning.
The program of studies leading to actuarial careers is also useful preparation for careers in banking and investment. Many areas of the program are also of general interest as preparation for advanced study in statistics, applied mathematics, and operations research.
Entry into the actuarial profession and advancement within the profession involves passing a series of examination administered by the actuarial societies. The Society of Actuaries gives examinations covering life and health insurance and pension planning. Examinations given by the Casualty Actuarial Society cover the property and liability field.
ORGANIZATION OF ACTUARIAL STUDENTS (OAS)
Actuarial students in the Applied Math department run a student society called the Organization of Actuarial Students. Meetings include advice about studying for the actuarial exams and talks alumni in senior actuarial positions and actuarial recruiters. For further information go to the OAS website or the OAS president at firstname.lastname@example.org.
Join us at OAS, Stony Brook's Actuary club. Learn about being an actuary, network and meet people from this profession.
Actuaries analyze the financial costs of risk and uncertainty. They use mathematics, statistics, and financial theory to assess the risk that an event will occur and they help businesses and clients develop policies that minimize the cost of that risk. Actuaries’ work is essential to the insurance industry. This organization strives for awareness of this career, for people that fulfill the requirements to take the tests. We also endeavor to help our members through study groups, participation in job-fairs, and corporate presentations.
The first two exams in the series are sponsored jointly by the two Societies: the first exam, Exam P, covers probability material that is covered in AMS 311, Probability Theory; the second exam, Exam FM, covers the theory of interest which is the subject of AMS 318. The department also offers a review course, AMS 410, for Exam P.
The department frequently receives funds to help defray the cost of an actuarial exam for students who take the exam. Reimbursement is on a first come, first served basis and is contingent upon the availability of funds. Contact Janice Hackney for more information.
Validation by Educational Experience-
Students can also earn Validation by Educational Experience (VEE), instead of taking exams, in the areas of mathematical statistics, finance and economics by taking pairs of approved courses at Stony Brook in each subject and obtaining grades of B- or better. For mathematical statistics, the course is AMS 412, Introduction to Mathematical Statistics (for graduate students, AMS 570, Mathematical Statistics); for finance, ECO 389 and BUS 355; and for economics, ECO 303 and 305. Note: A student must pass Exam P or FM before they are eligible for the VEE option (https://www.soa.org/Education/Exam-Req/edu-vee.aspx).
For more details about the actuarial exams, please refer to the Society of Actuaries website www.soa.org . Currently, a student typically needs to pass the first actuarial exam, Exam P, and have at least one VEE subject passed to be qualified for an entry actuarial position.
Once employed, graduates who are employed as actuaries are expected to continue their studies to pass further exams, and are normally given 80 hours of released time by their employers to study and attend classes for each actuarial exam. People also form study groups, and there are study guides for the exams. These all help in the preparation for the exams, but one should still expect to study 10-20 hours per week after work and on weekends for several months.
After passing 10 exams of the Society of Actuaries, one is eligible to become an Associate Fellow of that society. For more details, see the Associateship and Fellowship Catalogs of the SOA and the Syllabus of Examinations of the CAS.
Scores of its B.S. graduates and those who have earned the M.S. degree in Statistics or Operations Research, now hold actuarial positions at companies such as Metropolitan Life, Prudential Life, NYLife, Chubb Insurance Cos., and AT&T. Through the accomplishments of these graduates, the Actuarial Sciences program at Stony Brook has become highly regarded by insurance companies and has been cited by them as a model to other universities starting actuarial programs in the New York metropolitan area.
ACTUARIAL CAREER DAY
Each year in early January, the Actuarial Society of New York (ASNY) organizes a large Actuarial Day event in New York City where insurance companies and actuarial consulting firms have applications for summer actuarial internship programs. For details, go to ASNY Webpage.
Profiles of Two AMS majors now working as an actuary:
Thalia Bouklas graduated from Stony Brook in 1986 with a Bachelor's degree in Applied Mathematics and Statistics and a Master's degree in Statistics. Upon graduation, she took a position as an Actuarial assistant in the Life and Health Insurance field at a nearby office of Metropolitan Life Insurance Company. Thalia first learned about the actuarial profession in high school, and as a Stony Brook undergraduate, took and passed the first two actuarial exams. Building on coursework in applied, operations research, and numerical analysis, she took and passed the next three exams of the Society of Actuaries shortly after leaving Stony Brook.
She found that an actuary's job is varied, encompassing many duties: general management, marketing, research, underwriting, investments, accounting, administration, and long-range planning. She notes, "Actuarial work gives a statistician or applied mathematician a chance to apply his or her mathematical skills in the real world. It requires a good mix of actuarial and business thought and offers the opportunity to delve into topics of both a mathematical and non-mathematical nature. Someone who has a talent for, and is building a strong foundation in, mathematics and statistics will find that actuarial work can provide an exciting and financially rewarding career that is challenging and offers many avenues for advancement in managerial roles."
Terri McNamee received her B.S. in Math and Philosophy from SUNY-Oswego. She wanted further training that combined mathematics with business. She chose the Applied Mathematics and Statistics graduate program at Stony Brook because she grew up in the neighboring town, Smithtown. Terri received her M.S. in Operations Research in December, 1990 but was unsure how to get an entry level job in her field of expertise. She heard about the actuarial field and that many entry-level opportunities exist for individuals without work experience.
In November, 1990, she passed her first actuarial exam. In January, she went to the annual Actuarial Career Day in New York City where she obtained more information about the three actuarial disciplines: Pension Consulting, Life Insurance, and Property/Casualty. "Pension Consulting had the most appeal since it seemed like the perfect fit for combining math with business. To this day, I feel I made the right choice for myself." She gave her resume to a few consulting firms that attended the Career Day and by April 1991 had two job offers (and had also passed her second actuarial exam). Terri started her actuarial career in August 1991 working for Cooper & Lybrand (currently called PriceWaterhouseCoopers) in New York City. In February 1994, she transferred to Sedgwick Noble Lowndes in Melville and is currently working for Milliman USA in the same office (due to an acquisition). She became an Associate of the Society of Actuaries in May 1994 and an Enrolled Pension Actuary in April 1998. She has had the opportunity to be the Manager of the Pension Department, the Actuary for a handful of pension plans, work on the projection of medical benefits, and work flex time from home.
"Many people believe that Traditional Pension Plans are a dying breed with the growth of 401(k) Benefit Plans. These Pension Plans have been around for many years and are beneficial to employees since they define the pension benefit when an employee retires, are regulated by the IRS, and are guaranteed by a government organization. It is the employer's responsibility to maintain the fund at a certain level and make contributions to obtain that level. On the other hand, 401(k) plans only define the amount deposited into the fund (usually a percentage of payroll) which grows at current rates of interest with the risk of return borne upon the employee. Although it is more expensive for a company to sponsor a Traditional Pension Plan, it is the type of plan that the employees do not risk their retirement income. The Plan's Actuary determines the level of contributions required such that the fund passes strict IRS regulations. I feel I have a very important job because it is the responsibility of the Actuary to make sure that there is enough money in the fund to pay current and future benefits.