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Want to be an actuary? Odds are, you’ll fail the test

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Re: Want to be an actuary? Odds are, you’ll fail the test

#181

Post by hypersoar »

feoren wrote: post #25

To be honest, everyone working in science, engineering, data science, actuarial science, or really any numbers-heavy field should be able to answer that first question by reasoning through it. It may be slow, it may require drudging up some distant memories from college, or it may even require a visit to Wikipedia; but if you work with numbers and you can't do that example problem, you owe it to your profession to br…

As a math Ph.D. dropout who took the first two exams: the trouble is that you have to solve them quite quickly. The tests weren't too hard for me, but I did have to practice the sorts of problems I would see so that I didn't have to spend too much time thinking. Even then, I didn't walk in feeling like it was a slam dunk.

Re: Want to be an actuary? Odds are, you’ll fail the test

#182

Post by civilized »

aqualinux wrote: post #172
tzs wrote: post #153

Earlier quoted context omitted.

> you're constrained to legacy industries Is insurance really a legacy industry?

The incumbent insurance companies maintain their position in the market through having large amounts of capital which lets them ultimately offer lower premiums than a new competitor entering the market which may have less capital. This means the legacy insurance companies don't need to prioritise investing in innovation to maintain their position, hence the old companies stay around.

Also, insurance just doesn't have much interesting space for innovation.

In life insurance, for example, products other than simple term insurance really shouldn't exist. They're mostly just Rube Goldberg tax sheltered savings accounts for the wealthy.

In theory there ought to be some opportunity in the area of incentivizing people to improve their health behaviors. But carriers have been much slower to move on that than to futz around with the latest financial engineering and tax avoidance techniques.

Re: Want to be an actuary? Odds are, you’ll fail the test

#183

Post by refurb »

acchow wrote: post #135
d136o wrote: post #39

In this [1] interview by Barry Ritholtz, Markel CEO essentially told the origin story of an insurance giant. Basically a family member was a lawmaker, passed a law that drivers of the newly invented cars (maybe horse buggies?) must be insured. They simultaneously started a company that sold insurance. Over time they learned to make money from investing their customers capital. It blew my mind at how candid he was abo…

Title Insurance is anachronistic. In the internet age, there should be open APIs for someone to check the liens and names on titles. I guess this is 2021 so...something something... blockchain...?

Title insurance covers things like property line disputes, mistakes made by titling companies, etc.

It’s far more than “who actual owns this parcel of land”.

Re: Want to be an actuary? Odds are, you’ll fail the test

#184

Post by cortesoft »

not-my-account wrote: post #16

Is the answer to the question at the top 0.33? let pc = purchased_collision, pd = purchased_disability we have: 2 * P(pc) = P(pd) P(pc & pd) = 0.15 so P(pc) * P(pd) = 0.15 2 P(pc)^2 = 0.15 --> P(pc) = 0.274, P(pd) = 0.548 So the probability of neither pc nor pd is !P(pc | pd) = 1 - P(pc) - P(pd) + P(pc & pd) = 0.328 ~= 0.33? The addition of P(pc & pd) was to take account of the double counting of pc and pd. Please le…

Yeah, I couldn’t read the article but saw the first question… I got 33%, too.

Re: Want to be an actuary? Odds are, you’ll fail the test

#185

Post by cortesoft »

ummonk wrote: post #24
not-my-account wrote: post #16

Is the answer to the question at the top 0.33? let pc = purchased_collision, pd = purchased_disability we have: 2 * P(pc) = P(pd) P(pc & pd) = 0.15 so P(pc) * P(pd) = 0.15 2 P(pc)^2 = 0.15 --> P(pc) = 0.274, P(pd) = 0.548 So the probability of neither pc nor pd is !P(pc | pd) = 1 - P(pc) - P(pd) + P(pc & pd) = 0.328 ~= 0.33? The addition of P(pc & pd) was to take account of the double counting of pc and pd. Please le…

It is yes. Definitely need a calculator to be able to do sqrt(0.075) and calculate the result. Though I was able to figure it out in my head without a calculator by eliminating choice A and choice C (I tried pd=0.3 and pd=0.2 to prove the answer had to be >0.28 and <0.48).

I did trial and error with some possible numbers until I got really close with .55 and .275… then I used those and got .32625, which was really close to 33%

Re: Want to be an actuary? Odds are, you’ll fail the test

#186

Post by throwawaygh »

sjg007 wrote: post #131
xeRTRex wrote: post #118

One of the most frustrating aspects of the process is that once outside of insurance/insurance-adjacent industries, the credentials are useless. I have my FSA (fellowship of the SOA) and CERA (chartered enterprise risk analyst) from the SOA. I no longer wanted to work in insurance and left for data science. I felt the need to obtain a graduate degree to feel qualified enough for the data science space. My Master's de…

You came to the right place if you want to disrupt things with a startup.

I'm not sure there's much to disrupt in that industry.

Re: Want to be an actuary? Odds are, you’ll fail the test

#187

Post by jjnoakes »

refurb wrote: post #179
jjnoakes wrote: post #140

Earlier quoted context omitted.

A counterpoint (not necessarily my view but a view nonetheless) would be that if everyone pays into a single required insurance pool then the risk doesn't need to be accurately determined a priori. Each individual's rates might be the same, but they could be lower overall because there are more paying in. A low risk driver may pay more than they use, but it could be less than the market rate regardless.

The risk still needs to be accurately determined, even if not for each individual. If 100 people in a population will be injured and get a pay out of $100k, you need to know that to set general rates. What I’ve seen in places that have government insurance is the government is constantly trying to backstop the insurance. Why? It becomes a political hot potato when rates go up, so there is pressure to keep them down w…

You can just update rates after the fact if necessary. I don't really see the problem with that. People with a bad history may get higher rates, just not based on risk analysis but based on their actual history.

Re: Want to be an actuary? Odds are, you’ll fail the test

#188

Post by [deleted] »

gompertz wrote: post #89

Actuarial major here (early 2000s). These exams are indeed quite hard - and if not hard (by someone's personal definition), just cover such a grotesque amount of material for a single exam that by the time you get to the last 20% of the syllabus, the first 80% feels like another lifetime ago. I have passed three of the SOA (society of actuary) exams, and wrote a fourth and bombed it in ~2005 and never wrote again - r…

[deleted]

Re: Want to be an actuary? Odds are, you’ll fail the test

#189

Post by cortesoft »

omosubi wrote: post #2

I feel very difficult exams should be commonplace. Everyone should be held to very high standards. It's surprising how many professions don't do this. For example, I've been to several physical therapists who barely seemed to understand what was wrong with me even after several visits. Each gave me what seemed like the same standard routine that they give everyone with problem.

It depends… if you set the standards too high, then fewer people are going to be able to do it, and then you either have a shortage or you have to increase salaries to attract more candidates. However, if you are expecting high standards at ALL professions, then even raising salaries won’t fill your candidate pool enough to find sufficient qualified people.

Raising standards won’t suddenly increase the number of people who can meet those standards. It is likely you will just end up with a lot of shortages for important positions.

The standards have to be considered very carefully to find a balance between ensuring enough quality to be effective but not so high that you can’t fill the need.

Re: Want to be an actuary? Odds are, you’ll fail the test

#190

Post by heavyset_go »

gurchik wrote: post #158
heavyset_go wrote: post #74

Earlier quoted context omitted.

> I also pay for pet insurance. Again, not required to have it but when I considered cancelling and self-insuring I filed a claim and was immediately paid out hassle free. That convinced me to keep it. Don't get rid of it, the cost of healthcare for pets is quickly reaching the cost of healthcare for humans.

I believe it. I had a high deductible health insurance plan and had a serious injury that required a hospital stay. Even though I paid for all of it before meeting my deductible, it was still cheaper than the medical costs I have spent on one of my three pets who is actually young and very healthy, but accidents happen.

A family member's dog's ACL surgery cost more than the ACL surgery they themselves got a few years before. Pet medicine is filled by pharmacies and costs as much as human medicine does. It's nuts.
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