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  #1  
Old 04-15-2019, 07:04 PM
ActuaryFromMTL ActuaryFromMTL is offline
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Default Actuarial position in an audit firm

Hi everyone,

I have an interview in the next few days for an actuarial position with one of the Big 4 audit firms. I was originally looking for a role in a life insurance company but there are almost no job openings.

I have some questions:

1. The position is in life insurance, so as per my understanding I will be reviewing other life actuaries work. However, why would insurance companies outsource this task since they have so many actuaries internally? Is there a law that makes it mandatory?

2. I was pretty excited at first about this opportunity because on the surface it seemed that it was everything I'm looking for. However, as I dived more into it, I've read that actuarial work in an audit firm is similar to actuarial in a consulting firm (stress, OT, pressure). Of course, I will discuss this with them during the interview, but can anyone comment on the work-life balance of such a role?

3. If I want to change for a job at a life insurance company in the future because I don't like it, how useful will this experience be for me and how much more attractive will I be for potential recruiters?


Thank you.


PS: the pressure at work is my main fear, I don't want a heart disease at 30.
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  #2  
Old 04-15-2019, 07:51 PM
Dr T Non-Fan Dr T Non-Fan is offline
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Fear is for suckers.
Second, you don't even have the job yet.
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  #3  
Old 04-15-2019, 09:06 PM
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Originally Posted by ActuaryFromMTL View Post
PS: the pressure at work is my main fear, I don't want a heart disease at 30.
If you know long hours is going to be a dealbreaker for you at the outset it's hard to imagine how a big4 firm could work out...

That said sometimes you do long hours at insurance companies too, can vary a lot with all sorts of things. The actual stress you feel can also vary a lot with and without number of hours.
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Old 04-16-2019, 03:07 AM
Westley Westley is offline
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Originally Posted by ActuaryFromMTL View Post
1. The position is in life insurance, so as per my understanding I will be reviewing other life actuaries work. However, why would insurance companies outsource this task since they have so many actuaries internally? Is there a law that makes it mandatory?

2. I was pretty excited at first about this opportunity because on the surface it seemed that it was everything I'm looking for. However, as I dived more into it, I've read that actuarial work in an audit firm is similar to actuarial in a consulting firm (stress, OT, pressure). Of course, I will discuss this with them during the interview, but can anyone comment on the work-life balance of such a role?

3. If I want to change for a job at a life insurance company in the future because I don't like it, how useful will this experience be for me and how much more attractive will I be for potential recruiters?
1 Sounds like you're referring to the "audit support" portion of the work, which usually isn't the entire job, but can be. This isn't mandated by law, but the way business practices and financial reporting are set up, that may as well be the case. Basically, they want an outside audit firm to state that management has reported the financials accurately in all material aspects. And to do that, the outside audit firm will need to have their own actuaries review the work of the company's actuaries.
2 Yes, audit firms have some of the worst work-life balance IME. Whether that works for you or not is something to learn. TBH, I liked it. Today, I have a much better balance, but wouldn't say I'm in any way happier overall.
3 Very useful. Definitely would recommend having audit firm experience.


Overall, you're asking the right questions and should ask the same questions when you interview.GL
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Old 04-16-2019, 07:25 AM
ActuaryFromMTL ActuaryFromMTL is offline
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Originally Posted by NormalDan View Post
If you know long hours is going to be a dealbreaker for you at the outset it's hard to imagine how a big4 firm could work out...

That said sometimes you do long hours at insurance companies too, can vary a lot with all sorts of things. The actual stress you feel can also vary a lot with and without number of hours.
Thank you for the advice. This is definitely something to discuss with them.

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Originally Posted by Westley View Post
1 Sounds like you're referring to the "audit support" portion of the work, which usually isn't the entire job, but can be. This isn't mandated by law, but the way business practices and financial reporting are set up, that may as well be the case. Basically, they want an outside audit firm to state that management has reported the financials accurately in all material aspects. And to do that, the outside audit firm will need to have their own actuaries review the work of the company's actuaries.
2 Yes, audit firms have some of the worst work-life balance IME. Whether that works for you or not is something to learn. TBH, I liked it. Today, I have a much better balance, but wouldn't say I'm in any way happier overall.
3 Very useful. Definitely would recommend having audit firm experience.


Overall, you're asking the right questions and should ask the same questions when you interview.GL
Awesome. So basically, insurers pay audit firms to review their work so that in case something is wrong with their financials or the way they do things, they want to be able to explain that they took every precautions possible to make sure everything is correct, and to exempt themselves from all intentions of wrongdoing.

And yes, I should bring up my questions about work pressure with them.

Thank you both for your inputs.
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Old 04-16-2019, 09:59 AM
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Awesome. So basically, insurers pay audit firms to review their work so that in case something is wrong with their financials or the way they do things, they want to be able to explain that they took every precautions possible to make sure everything is correct, and to exempt themselves from all intentions of wrongdoing.
OK, anybody who's young and reading this, here's a lesson for you. The OP read what I wrote, re-wrote it to succinctly explain his understanding, and put it back so that I can confirm that he's right or wrong. This kind of clarifying is something that a lot of recent grads (and I'm old, so "recent" means several years) don't know how to do because they're used to a college format where the teachers are more spoon-feeding it, and besides if you missed something you can probably look it up in the book. This is an important skill. In this case the OP was wrong and can learn a bit more.

You're not way off, and with respect to what actuaries do, you're close enough that there's not a difference. But, to capture the big picture, you need to understand the corporate structure just a bit.

The company is owned by the shareholders (or a mutual is owned by the policyholders). The owners select* a Board of Directors to make the high-level decisions - primarily choosing the management and especially CEO. The CEO and C-Suite run the company on a day-to-day basis. Because management is sometimes dishonest**, or can make mistakes and just try to obscure things, or other times is just so overly-optimistic that the financials aren't a fair representation of what's going on - the Board (actually the audit committee, which is a subset of the Board) selects an independent outside firm to review management's financial statements and state an opinion on the accuracy of those statements.

So, you were close, but it's not "the insurers" and it's important to understand the difference here between the audit committee (the Board) and management of the company.



*This is clearly technically correct, although there's lots of people that would argue that shareholders' decisions get over-written by management through their own machinations - there's some merit to it but it's beyond the scope of this discussion.
**It's arguable whether the audit firm is supposed to catch blatant dishonesty like Enron and similar frauds
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Old 04-16-2019, 09:59 AM
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I work at an audit firm. PM me if you wish
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  #8  
Old 04-16-2019, 11:59 AM
ActuaryFromMTL ActuaryFromMTL is offline
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Originally Posted by HaloPewPew View Post
I work at an audit firm. PM me if you wish
I will shoot you a DM. Thanks.

Quote:
Originally Posted by Westley View Post

The company is owned by the shareholders (or a mutual is owned by the policyholders). The owners select* a Board of Directors to make the high-level decisions - primarily choosing the management and especially CEO. The CEO and C-Suite run the company on a day-to-day basis. Because management is sometimes dishonest**, or can make mistakes and just try to obscure things, or other times is just so overly-optimistic that the financials aren't a fair representation of what's going on - the Board (actually the audit committee, which is a subset of the Board) selects an independent outside firm to review management's financial statements and state an opinion on the accuracy of those statements.

So, you were close, but it's not "the insurers" and it's important to understand the difference here between the audit committee (the Board) and management of the company.



*This is clearly technically correct, although there's lots of people that would argue that shareholders' decisions get over-written by management through their own machinations - there's some merit to it but it's beyond the scope of this discussion.
**It's arguable whether the audit firm is supposed to catch blatant dishonesty like Enron and similar frauds
Crystal-clear and easy-to-follow explanation. You were right, I didn't understand the difference between the Board of Directors and the Management. Everything makes sense now. Thank you.
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Old 04-16-2019, 01:18 PM
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OK, anybody who's young and reading this, here's a lesson for you. The OP read what I wrote, re-wrote it to succinctly explain his understanding, and put it back so that I can confirm that he's right or wrong. This kind of clarifying is something that a lot of recent grads (and I'm old, so "recent" means several years) don't know how to do because they're used to a college format where the teachers are more spoon-feeding it, and besides if you missed something you can probably look it up in the book. This is an important skill. In this case the OP was wrong and can learn a bit more.


Can't say that enough!
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Old 04-16-2019, 10:43 PM
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ShivamS ShivamS is offline
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Others have answered your questions pretty well. I’ll add a couple more things.

It’s pretty hard coming into a B4 at the Manager+ Level. There are a lot of expectations that you’re not aware of and, quite frankly, training and onboarding can suck. This doesn’t matter if your plan is to do 2 years and bounce - but does matter a lot if you’re trying to get promoted. I’m not sure what level you’re at, but this is important to consider.

Second thing, you’re thinking of yourself being in a static role. There’s a very high chance you’re not on recurring work and are thrown onto projects outside your experience and comfort zone. Outside of Life Actuarial, even. Sometimes outside of even actuarial altogether. I don’t think it’s a bad thing - just want to set expectations that you likely won’t be doing audit support only. That’s not how we deploy resources typically.

Final thing - get the offer and then waste time thinking about this.

On my phone - sorry if it was hard to read
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