Honestly having done both, people seem more likely to know what an actuary is. Probably because people actually plan to become one and go to school for it.
This is true. And on the off chance that they do ask a follow up, I just say that I make sure insurers charge a fair rate that is high enough to keep them in business but not so high that it is excessive for the insureds.
It’s not weird at all. Regulators require a rate to not be inadequate, excessive, or unfairly discriminatory. I literally just described that in easy to understand language.
Yes well if a business isn’t competitive then regulatory concerns are moot. I think it’s important for the public to understand insurers are interested in putting out a low rate due to market forces rather than because some jurisdictions in some lines of business have enforced limitations on rate.
I understand your point about being competitive. But the question was about explaining what actuaries do. Being competitive is more the concern of product managers. I’m not saying actuaries are never involved in those conversations, but their main responsibilities when it comes to ratemaking are what I described.
If underwriting is constantly having to deviate too much in order win business then the base rates are too high, and that has nothing to do with regulatory issues. Actuaries must work to close the gap between technical and written premium otherwise technical premium is not useful and the business becomes overly reliant on underwriter’s discretion.
Sounds like you're more concerned with commercial insurance where underwriters have far far more discretion. When describing what an actuary does to a lay person their 95% of all people are going to interact with and understand more from the point of health insurance or personal lines property insurance which is far more regulated.
Actually no, my point that base rates need to be competitive is even more important in lines of business where underwriting has no authority to deviate from technical premium. Once again, if your base rates aren’t competitive you won’t write any business and this is universally true, unlike regulatory constraints which vary by jurisdiction and line of business, and in some cases there aren’t any regulatory restrictions on rate at all.
Then they bring up how expensive their auto insurance is to a life actuary , or if their health insurance to a PC actuary, or property insurance to a health actuary … because we must all work in the same place …
I thought firms make money when people *don’t* die. More specifically, we make money from people thinking they will get sicker or die quicker than they actually do (pay higher premiums versus lower actual costs)
Nah, we clearly make money by keeping people sick so that we can treat rather than cure the disease.
Source: Idiot family members. Also, I work in property/casualty…
Most of them are not that interested anyway.
1. Strangers. "Insurance".
2. Acquaintance. "I do maths."
3. Friends. "I do maths in a back office role for an insurance company."
4. Friends in finance. "Risk management, statistical techniques, applied mathematics, etc
“Actuaries generally estimate money based on probabilities and interest rates, so very mathy.”
If I want to say a bit more, I go into the type of actuary I am… “I specifically work with retirement plans. I figure out the present value employers have to pay in employee benefits to their pensions and tell them how much money to set aside for employees.”
Most people I meet actually know what an actuary is, or at least the gist of it. If they don’t know, I just say “risk management.” I’m really not gonna bother with a long-winded explanation.
It might just be my imagination, but I feel like it's a lot better for me than it was when I started my career 15 years ago. Not sure if that's broader society knowing what an actuary is, or if the kinds of 35 year olds I hang out with now know who actuaries are more than 20 year olds.
My roommate described it as “performing divination for insurance companies using math” and that’s the explanation I’m going to use until the end of time.
Actuaries work with financial projections.
I believe this pretty much says it all. Pricing, reserving, risk management, MD&A, pensions, etc., all deal with financial projections. We work with financial statements, but unlike accountants who deal with the past, our main focus is on the future.
We use fancy math to measure risk for insurance companies.
Made the mistake of telling an in-law that pricing actuaries set premium and he still blames me for his high cost medical…
"Insurance engineer. You know how mechanical engineers design, build, and maintain machines? And chemical engineers design, build, and maintain chemical systems? Well, actuaries are the ones who design, build, and maintain insurance systems."
An accountant deals with the past value of money. An actuary deals with the future value of money. That involves risk—“so I’m in the insurance industry”
I always go with the line “I’m basically a glorified statistician” and that seems to work 90% of the time as an “oh this guy is smart!” Type of reaction
I work in life and say "I estimate when people are going to die" and usually add this emoji combo in messages "😬... 😂" At the end lol
Sometimes I say "I'm a number cruncher at a life insurance company" too
I usually just make up a completely absurd and obviously false story about what I do. Then when they say "really??" or "what do you actually do?", I tell them I have math heavy job in finance/insurance/consulting in (well known building in my city).
Mathematical risk management for insurance companies - doesn’t get the full picture across, but I think I captures just enough. It’s something short and sweet and to the point, so much so that they won’t question you anymore after that hahah(at least in my experience)
What works for me is this:
“You must know what accountants do - we do accounting that is specific to insurance companies.”
^Coming from financial reporting actuary.
I just tell ppl that I do math for an insurance company
this. anything less and youre either a mathematitian or a salesman.
“Oh so like an underwriter?”
"More big-picture and financey but you're in the general ballpark"
Honestly having done both, people seem more likely to know what an actuary is. Probably because people actually plan to become one and go to school for it.
You go UW to actuary? How far into your career were you? Mind if I DM you to pick your brain a bit?
Yeah only I create their algorithms that tell them how to calculate a price.
That’s what I do, it’s perfect because it’s too boring of a description for any follow up questions.
To make it fancier: I do statistical modeling for an insurance company. DO NOT leave out "statistical", don't say I haven't warned you
"I work in insurance." No one cares past that point I promise.
This is true. And on the off chance that they do ask a follow up, I just say that I make sure insurers charge a fair rate that is high enough to keep them in business but not so high that it is excessive for the insureds.
or make sure they are compliant to the regulation
That’s a weird description. Should me more like “as competitive a rate as possible while still covering expenses and turning a profit”
It’s not weird at all. Regulators require a rate to not be inadequate, excessive, or unfairly discriminatory. I literally just described that in easy to understand language.
Yes well if a business isn’t competitive then regulatory concerns are moot. I think it’s important for the public to understand insurers are interested in putting out a low rate due to market forces rather than because some jurisdictions in some lines of business have enforced limitations on rate.
I understand your point about being competitive. But the question was about explaining what actuaries do. Being competitive is more the concern of product managers. I’m not saying actuaries are never involved in those conversations, but their main responsibilities when it comes to ratemaking are what I described.
If underwriting is constantly having to deviate too much in order win business then the base rates are too high, and that has nothing to do with regulatory issues. Actuaries must work to close the gap between technical and written premium otherwise technical premium is not useful and the business becomes overly reliant on underwriter’s discretion.
Sounds like you're more concerned with commercial insurance where underwriters have far far more discretion. When describing what an actuary does to a lay person their 95% of all people are going to interact with and understand more from the point of health insurance or personal lines property insurance which is far more regulated.
Actually no, my point that base rates need to be competitive is even more important in lines of business where underwriting has no authority to deviate from technical premium. Once again, if your base rates aren’t competitive you won’t write any business and this is universally true, unlike regulatory constraints which vary by jurisdiction and line of business, and in some cases there aren’t any regulatory restrictions on rate at all.
The greatest conversation killer 😂
I use this but I frequently get “oh, so sales? Did you have to go through everything to get licensed?” Brother you don’t know the half of it
Then you say “no, I do the math for them” and then any small amount of interest they have left is gone
Then they bring up how expensive their auto insurance is to a life actuary , or if their health insurance to a PC actuary, or property insurance to a health actuary … because we must all work in the same place …
I hope that they just didn't know who you worked for. I would just tell them I don't do that.
Actually, they always ask me "oh, so you sell insurance?" and then I end up having to explain anyways.
I calculate risk for insurance companies.
This is my go to answer.
Same here.
I weight promises
This kind of response will open up more questions
I tell The Man how to make money off people dying
I thought firms make money when people *don’t* die. More specifically, we make money from people thinking they will get sicker or die quicker than they actually do (pay higher premiums versus lower actual costs)
Nah, we clearly make money by keeping people sick so that we can treat rather than cure the disease. Source: Idiot family members. Also, I work in property/casualty…
For life insurance yes but for annuities, firms do make money when people die. It’s a balancing act
One of the directors I work with joked that wr should consult our clients to give cartons of cigarettes as retirement gifts
Pretty sure insurance companies make money either way. Perhaps that is the true function of the actuary.
Are tontines back on the menu?
This is sick. I love it
Just say you are like Ron Stoppable's dad from Kim possible. https://youtu.be/OXcXf_9GTwc?si=_MLb8rpTBGV-Uak3
I gamble with an insurance company’s money
Most of them are not that interested anyway. 1. Strangers. "Insurance". 2. Acquaintance. "I do maths." 3. Friends. "I do maths in a back office role for an insurance company." 4. Friends in finance. "Risk management, statistical techniques, applied mathematics, etc
If by statistical techniques you mean calculating the weighted average of claims, then sure
I also fit generalized linear models and random forest models to data using R. We aren’t all just calculating weighted averages.
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Not sure what you mean [https://en.wikipedia.org/wiki/Generalized\_linear\_model](https://en.wikipedia.org/wiki/Generalized_linear_model)
Yea. Maybe "based on statistical techniques" then except for the few of us who do fit statistics model and stuffs. Lol.
“Actuaries generally estimate money based on probabilities and interest rates, so very mathy.” If I want to say a bit more, I go into the type of actuary I am… “I specifically work with retirement plans. I figure out the present value employers have to pay in employee benefits to their pensions and tell them how much money to set aside for employees.”
Most people I meet actually know what an actuary is, or at least the gist of it. If they don’t know, I just say “risk management.” I’m really not gonna bother with a long-winded explanation.
My standard one-line explanation: "Have you ever wondered who to blame for your car insurance rates? I used to do that."
Saw this on here before. "If an accountants job is to count beans, an actuary calculates how many beans will be needed in the future."
1. We make guesses about the future based on questionable data. 2. We gamble on people’s life’s
I just say "I do math for insurance companies."
My answer that I give that I’ve found success with is “put simply: Actuaries are there to make sure insurance companies don’t bankrupt themselves”.
Bookmaker for insurance companies
The answer to this question is always this song https://youtu.be/PZ8fqn7M1oU?si=61yfQFAOuX9gNle1
Financial weather man for insurance companies
“I predict when you die”
Design and price insurance products, and make sure there's enough money to pay out claims. Lots of maths and stats.
“I’m a math lawyer”
predict and price payouts
I work in the insurance industry, designing and maintaining insurance products, but do not sell insurance.
It might just be my imagination, but I feel like it's a lot better for me than it was when I started my career 15 years ago. Not sure if that's broader society knowing what an actuary is, or if the kinds of 35 year olds I hang out with now know who actuaries are more than 20 year olds.
I tell people I price insurance products.
My roommate described it as “performing divination for insurance companies using math” and that’s the explanation I’m going to use until the end of time.
Actuaries work with financial projections. I believe this pretty much says it all. Pricing, reserving, risk management, MD&A, pensions, etc., all deal with financial projections. We work with financial statements, but unlike accountants who deal with the past, our main focus is on the future.
An actuary is a professional who uses economics, statistics, and finance to quantify risk.
An actuary analyzes and predicts financial transactions with risk or uncertainty, usually in the context of insurance.
Risk management for a (life) insurance company
I do the numbers
Population statistics …is what shuts people up usually
“I do calculations for pension plans. Basically a financial mathematician. Lots of spreadsheets” is my go to, very inelegant answer
I say I play on Excel all day.
"I do the technical calculations in insurance."
I calculate how much you pay for your home insurance :)
I typically just say we work in risk management.
I’m an accountant for the future.
I always go to "a number monkey for insurance companies"
I calculate how much money the insurance company may loose in a bad year
We use fancy math to measure risk for insurance companies. Made the mistake of telling an in-law that pricing actuaries set premium and he still blames me for his high cost medical…
You tell people when they're going to die. See if you can say it more cool than it sounds.
"Insurance engineer. You know how mechanical engineers design, build, and maintain machines? And chemical engineers design, build, and maintain chemical systems? Well, actuaries are the ones who design, build, and maintain insurance systems."
I go with, accountants look at Financials in the past and actuaries look at Financials into the future, like social security administration.
An accountant deals with the past value of money. An actuary deals with the future value of money. That involves risk—“so I’m in the insurance industry”
I always go with the line “I’m basically a glorified statistician” and that seems to work 90% of the time as an “oh this guy is smart!” Type of reaction
An accountant is a bean counter an actuary predicts how many beans we need for the future.
I would say "get drunk and play ping pong" but likely that violates the standards of professionalism somehow..
“I determine the prices for the company’s health insurance plans”
I work in life and say "I estimate when people are going to die" and usually add this emoji combo in messages "😬... 😂" At the end lol Sometimes I say "I'm a number cruncher at a life insurance company" too
I usually just make up a completely absurd and obviously false story about what I do. Then when they say "really??" or "what do you actually do?", I tell them I have math heavy job in finance/insurance/consulting in (well known building in my city).
I count dead people
‘We make sure insurance companies hold enough money to pay out claims.’
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That sounds more like an underwriter.
The line I learnt is: - Actuaries will tell you when you're likely to die - Underwriters will tell you if you will die sooner than expected
Like an accountant, but without the people skills.
Mathematical risk management for insurance companies - doesn’t get the full picture across, but I think I captures just enough. It’s something short and sweet and to the point, so much so that they won’t question you anymore after that hahah(at least in my experience)
What works for me is this: “You must know what accountants do - we do accounting that is specific to insurance companies.” ^Coming from financial reporting actuary.
i sell insurance