CAS or SOA...please help

[cablepro]

Would someone be so kind as to give me a brief rundown of the pros/cons of each field? Or even just any significant differences between the two.

[Macroman]

The CAS and SOA are not really fields, they are organizations that support alternative qualification processes in the USA. The major fields are Life, Casualty, Health and Pension. There are also actuaries doing work in other areas like manufacturing or banking but these are certainly the exception rather than the rule.

The CAS process is used primarily by those in the casualty field. Most other actuaries go the SOA route. Pension actuaries also have other alternatives. Strictly speaking the method of qualification does not restrict you to a particular field, but the American Academy of Actuaries (the organization which actually decides who can sign official actuarial documents) does have some vague language in thier code of conduct about being qualified through education and experience for the work that you do.

Try visiting http://www.beanactuary.org and see if you can come up with a more specific question. Are you interested in the work, the exams, some combination? In general I believe the differences in work are more signifficant between firms and consulting vs insurance than between the fields. An internship is an excellent way to figure out if it's really for you.

One thing you have going for you is that as a student you don't need to decide which field you are interested in to start taking exams. The CAS and SOA share the same exams for courses 1-4, and these exams also help prepare you for the pension exams.




<font size=-1>[ This Message was edited by: Macroman on 2002-01-06 17:25 ]</font>

[cablepro]

I appologize for my improper method of saving words. I will expound here.

I do completely understand that SOA and CAS are not fields. However, from what I have read, actuaries in the casualty field generally sit for exams administered by the CAS, and actuaries in the health/life field generally sit for exams administered by the SOA.

My question should have been more along the lines of: Can someone give me insight as to the differences between working in the casualty and health/life fields?

It strikes me as curious that on the D.W. Simpson site, the average salary is significantly greater in casualty than in health/life.

I have come up with two possibilities. Either this is an accurate depiction, or it is skewed in some way. One possible problem, might be if most jobs in casualty are in higher COL areas, thus salaries would appear higher.

Please advise

[Macroman]

On 2002-01-06 22:04, cablepro wrote:
My question should have been more along the lines of: Can someone give me insight as to the differences between working in the casualty and health/life fields?

It strikes me as curious that on the D.W. Simpson site, the average salary is significantly greater in casualty than in health/life.

I have come up with two possibilities. Either this is an accurate depiction, or it is skewed in some way. One possible problem, might be if most jobs in casualty are in higher COL areas, thus salaries would appear higher.

Please advise


I'm certainly not the best person to answer this, since my limited view is from 1 company in the health field. There are few people around who are legitamately qualified to compare fields, since most spend their entire career in one field. However, I'll give you my viewpoint and try to relate a little about what I have heard.

The biggest difference would be between insurance and consulting. Consultant's pay is closely tied to productivity. They generally work more hours, harder, and get paid more than insurance company counterparts.

As for comparisons between Life, Health and Casualty, I don't think the difference is all that great. Health and Casualty probably will work harder than Life conterparts. I work in renewal pricing at a Health insurer and it's a lot of ongoing work. Policies need to have regualr rate revisions, which occupies much of our time. This would also be true for Casualty. By contrast, Life plans would generally have their rates set for the entire life of the policy at issue. The bulk of the work in the Life area would be related to new business development.

As for salary differential, I suspect that this is more a matter of scarcity and may be a temporary phenomenom. On the other hand, the Casualty side has been used to easier math oriented exams than the SOA and may experience a continued shortage of qualified actuaries with consequent sustained higher wage rates.

Please feel free to add/correct/critcize...

[Troy McClure]

On the other hand, the Casualty side has been used to easier math oriented exams than the SOA and may experience a continued shortage of qualified actuaries with consequent sustained higher wage rates.


Not sure I follow the correlation of easier math exams with continued shortage and higher wages?

My take is that there is no distinct advantage based purely on dollars - actuaries in general do pretty well, but don't expect to keep up with the I-banker next door.

I think the salary differential might disappear if you compared consulting actuaries to consulting actuaries, regulatory to regulatory, company to company. I believe that a significantly higher percentage of P/C actuaries are in consulting.

[E. Blackadder]

Broadly casualty is the study of the financial impact of events that may happen in a given time period. Life is the study of events that will happen, at an indeterminate time.

Casualty tends to be played for higher stakes, and is less regulated. Asbestos litigation and the WTC are examples of casulty events. In the case of the WTC, billions of dollars will flow depending on whether the plane impacts were one event or two. And at this level of incident, insurance companies insure other insurance companies.

Personal lines casualty is less exciting from this perspective, but there is a lot of it.

Health is much like casualty, except the time from incident to payment tends to be shorter, sometimes much shorter.

[Macroman]

Tony:

The CAS formerly had their own coure #3 and #4 exams and now share these with the SOA. The old CAS exams were somewhat easier mathematically with more emphasis on memorization. I believe that there is some concern in the casualty field that they will have trouble getting students thru the current courses #3 and #4, putting those who do (in the casualty area) at something of an extra premium.

I did not know that the Casualty sector had a higher percentage of consultants, that certainly would help explain the differential as consultants are a higher paid (and harder working) group.

[cablepro]

My cousin is an investment banker. And he feels that with my gpa and experience of running our(wife and I) corporation, that I have a shot at getting into a top 15 business school.

However, my cousin probably works about 80 hours a week, and hardly even gets to SEE his family. I have no idea how much he earns, but I know he is well beyond 200k.

It is my understanding that actuarial work require 40-45 hours of work, and then additional study time. Is the study time great enough to equate to a 70-80 hour workweek?

[Don Quijote]

On 2002-01-06 22:46, Macroman wrote:
Health and Casualty probably will work harder than Life conterparts.

Couldn´t prove that by the relative volume of posting since the WC shut down... :smile:

To Cablepro... very few people under 50 earn over $200K annually without working in excess of 60 hours per week.

The beginning stages of an actuarial career would have you working 35 - 45 hours per week, with some paid study time included in those hours. Depending on your own eductional background and intellectual power, you will add additional study hours on your own time. It would surprise me greatly if successful exam candidates work/study 70 hours per week over any significant period of time. 70 hours in the May / November exam seasons, perhaps.

[cablepro]

do you feel the actuarial field to be a more stable field, while still providing above average income, in comparison to management consulting or invenstment banking?

[Maine-iac]

I'll throw in a few random comments to the mix. I am an FSA in the SOA (worked mostly in health) and am pursuing CAS credentials now. (Small regional P&C carrier) I've never worked as a consultant.

Actuarial work is relatively stable, but no job is layoff proof. An actuary can almost always find another job, if he or she is willing to relocate. If not, it can be tough to find another position when a major insurer in an area lays off.

The salaries are quite decent, though not extravagant, usually. Not Wall Street levels, but not Wall Street volatility or hours either.

Consulting is more demanding (and generally pays better), but the average insurance company job takes roughly 40 hours a week, with occasional periods of higher demand. While studying (8 to 10 months a year) figure you will need to sacrifice 10 to 15 hours of personal time a week to the cause. Its gruelling, but once its over there are rewards. Bare minimum of 5 years, more likely 8 to 10, can be more.

I don't think you can say life work or casualty work is more difficult or more interesting. It depends a lot on your interests. Most casualty and health insurance evolves rapidly, is highly regulated (a frustration), and is focused on the short to medium term. Most life insurance has a longer time horizon, less regulatory scrutiny (though no insurance avoids it), and more conncections to finance and investment since they hold onto reserve funds much longer.

These are gross generalizations, and just my opinion, of course.

[Minerva]

As one who has spent her entire career in life insurance and not consulting, IMO the statements that "Life actuaries spend less time" and that "Consultants spend more time" are not necessarily accurate. IT DEPENDS - largely on the company and the level of responsibility. I know casualty actuaries who spend 40-50 hours a week and life actuaries who spend 60-80, and vice-versa.

Granted, in the company venues there is not the pressure for billable hours - but the pressure to get the work out is definitely there.

[Gore Tree Lover]

You will make good money as an actuary. You will make much more money in investment banking and likely also in management consultant. I would say actuary is somewhat more stable than m. cons and much more stable than i. banking - this is usually where the first cut backs are when the economy tanks. Overall, your job search should not be about how much money you make (this is of course a key ingredient) however you need to consider what you like to do, how much balance you want between work and other aspects of your life and what kind of money you truly need to be satisfied. If you are full of ambition and want to run the world and would not be happy making less than 200K, actuary is probably not the right career for you, there are exceptions of course, top consultants and executives in insurance.

[cablepro]

by no means do I want to "run the world"...but I would like to feel that I made a good "investment" in school. One that I will get a good return on. And since I currently earn 50-60K a year working for myself, I really would like to increase my earnings a bit, especially considering that I will have to add my student loan payments.

maybe I am just grumpy, but it seems that work is work...and that even the best jobs become WORK after some time...I do enjoy a career that I can be challenged, and in turn, try to produce better than the next guy...but I have learned to have my real fun while NOT WORKING (ie: flying my remote control helicopters, taking cruises, watching movies from bed).

I have been working full time running cables for the past 12 years (even still, while earning my degree full time). So I am definitely ready for a change...I am simply not challenged anymore, because I have seen everything in the business.

I would like to get some input as to what % of students that start taking the exams, actually make it through all of them. What are my chances? I do well in school, and since many of my professors can't seem to teach, I have to learn the material on my own (differential equations, linear algebra, physics 1,2, JAVA 1,2). However, I keep hearing how the process is more difficult than obtaining a PhD.

[Gore Tree Lover]

A ph.d is more difficult. the difficulty with the actuarial exams is balancing work with studying and other life commitments, you seem to have that mastered already. I am sure you will get through the exams. Most people do not fail out of exams out of due to lack of ability, it is usually due to not effectively mananging their time or burning out or having family and deciding that is more important than studying.

I have been taking exams for about six years now, just passed my ASA. Every exam I have failed has been due to lack of preparation or not focusing properly on the material not because the material was too hard. The exams can be tricky sometimes but if you are sufficiently prepared you will pass.

<font size=-1>[ This Message was edited by: on 2002-01-07 17:59 ]</font>

[Anonymous]

On 2002-01-07 10:36, wrote:
You will make good money as an actuary. You will make much more money in investment banking and likely also in management consultant.


I don't know what kind of numbers you are expecting to see in your paycheck, but I've found that there is a local maximum compensation for every age above which you trade dollars for personal freedom at a very unfair rate. At entry level that point is about $50,000 these days. At my level (4 years of experience) it's more like $60,000. Remember, I'm talking total comp. And it varies with age. So when you think about how much money you ultimately want to make, you also have to map out WHEN you want to earn that money, because if you start earning mad coin beforehand you'll pay for it in other ways.

<font size=-1>[ This Message was edited by: 3Sheets2thewind on 2002-01-07 18:35 ]</font>

[Macroman]

Cablepro:

If you already have a bachelor's degree, I would not reccommend returning to school full time in your circumstances. If you have mastered Differential Equations, then all you need for a good start on the exams is some economics and some statistics. I would think you could get these on a part time basis.

It's possible you would not need additional college at all, but I can't say for certain not knowing you.

If you are going for some additional classes, go for the calculus oriented STAT and ECON...They should be a breeze for you and really help you with the first couple exams...

[cablepro]

I'm not done with undergrad yet. The only additional class I would be able to fit in would be the calculus based probability and statistics class.

I have taken macroeconomics, but was not calc based, so I don't think it's going to be very much help.

Basically, any additional education I will require to pass these exams (aside from Prob&Stats) will have to be obtained through self-learning.

In Calculus, there was a series called the "Shaum's series" of problem solvers. Maybe they have something like this for economics and statistics. Then I might be able to pass the first couple exams by going through a couple textbooks, problem solvers, and study guides.


Also, I was just reading on another forum that there is a trend towards oversaturizing the actuarial field. But I've always been a believer that hard working, honest, dependable people would always get work. However, in an industry this small, is this still a valid argument?

<font size=-1>[ This Message was edited by: cablepro on 2002-01-07 20:54 ]</font>

[Dr T Non-Fan]

1. Your macroeconomics should be plenty for Course 2.
2. Yes, take the calc-based stat course. Lots of continuous random variable stuff to learn.
3. There can never be enough oversatirizing of the actuarial field.
4. I believe there are Schaum's Outlines for just about everything. A quick check of Yahoo! Shopping finds a few of each or economics and statistics. Check an available college bookstore for all possible ones.
5. Your chances are probably a lot different from the average exam taker. We made some assumptions and estimated the fallout rate in a past discussion board. I'm guessing 10% who ever take an exam eventaully become fellows. A Q&D analysis: last May, 3500 candidates took Course 1, while 612 passed Course 6. Every year, about 6000 new people take Course 1 (some retakers, but plenty don't retake #1), and 10% of them pass Course 6, which I consider one of the bellweather Fellowship exams (if you can pass it, then you're likely to be able to pass the other fellowship exams).
Extremely Q&D (lots of assumptions going unstated), and don't expect any help from the Societies about drop-out rates. I don't think anyone's allowed to analysis on it. They turn a blind eye to the "life" contingencies of actuarial exam taking.

In regards to one society or the other: it doesn't really matter. Find the company that appeals to your goals. Worry about the work aspects later. However, I would not recommend committing to the actuarial profession without looking for something in your own field. From your posts, you seem to have actual working skills, which are frowned upon in the actuarial world.

What's "running cable," anyway? Is that outdoor or indoor? Are you one of those black market guys (de Niro) from "Brazil"?

[cablepro]

I started out installing cable TV and satellite systems. Over the years I began installing computer cabling as well. Now my company is essentially a vendor to another company that sells intra-oral camera systems, video network, computer networks, and simulation software to dental practices.

After being a vendor for just a year, I negotiated a 25% share of the other company as well. So now I get profit from building/selling them computers and installations. As well, I get a share of the profit that the other company makes when they sell the equipment to the doctors.

It sounds like a very lucrative enterprise, and I am in a unique position of being the only one in the company that has much technology and business sense. However, my partners in the other company are someone inept. Their only worth is their sales ability. I find myself on a daily basis just praying that the business will stay alive long enough for me to finish my degree.

Once I finish school, I could break off and do all of it on my own, but it would require me to become primarily a salesperson, and that's not really what I want to do. I would like a career that I can earn a nice living, and be able to have intellectual conversations with coworkers or clients. My current coworkers don't know what intellectual conversation is, and the dentists don't know anything about what we do...they only care about, "it will make me more money? ok, install it next weekend"

Hence the shopping around for a new career...

[Dr T Non-Fan]

Good luck!

You might want to try getting a job at a place that will pay for your MBA. First, try to get accepted at one of the top 15. If so, then try to get a job in the area of one of the accepting colleges, and ask them to hold your app for a year. (No, I don't know if they'll do this, but it's worth a shot.) Don't tell prospective employers about this, or you'll scare them away. Ask about the continuing education policies.
With this tactic, you might as well not go into the actuarial field.

[jerrytuttle]

Stuart Klugman, a professor of actuarial science who has worked in neither the life nor the p/c field, allowed me to post his thoughts on the differences between life and p/c actuarial work in my web site http://users.aol.com/fcas/advice.html

[Anonymous]

You will make good money as an Investment Banker. You will make much more money in casualty actuarial work and likely also in Life actuarial work. I would say Investment Banking is somewhat more stable than Actarial work and much more stable than management consulting- this is usually where the first cut backs are when the economy tanks. Overall, your job search should not be about how much money you make (this is of course a key ingredient) however you need to consider what you like to do, how much balance you want between work and other aspects of your life and what kind of money you truly need to be satisfied. If you are full of ambition and want to run the world and would not be happy making less than 200K, investment banking is probably not the right career for you, there are exceptions of course, such as being the CEO of CITIcorp, Merryl Lynch, or Lehman Brothers.