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Old 08-14-2019, 03:30 PM
koudai8 koudai8 is offline
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Default Why would anyone become a life actuary if they can simply become a programmer

I am an ASA in the development program of a life insurance company with roughly two years of experience making 91k.

I have a few data points collected personally.

A Senior Director from my company (Ph.D. and FSA with 11 years of actuarial experience) makes $190,000, and a software developer (age 23) in my building with less than 2 years of experience makes $150,000. The issue is not how much they're making now, but rather their age differences and how much compounding in terms of raises the SE can get by starting out so high.

The senior director just came from another company, so the person is likely to make more now than at the old company. Both people in the picture work in the Greater New York area.

While I have some other friends in banks making slightly lower than 150K, I think the example above provides the starkest contrast.

I am wondering, why, that as (life) actuaries we plow through the grueling exam process sacrificing personal time and life expectancy, deal with the most complex products where interaction of risks is very unique (biometric risks and financial risks) and that things can go wrong either way -- the classical short straddle problem -- where the insurer suffers if rates go up or down, and that we as actuaries get so little monetary recognition.

My cousin (5 years younger than I) interns at a tech company as a programmer, and she founds out they pay the entry-level (lowest level) software developer 110K and thought that's low. I said, I'll be making that after I get my FSA and a promotion.

I understand that the sample size is small; I am drawing dangerously general conclusions from my sample, both person may have their own circumstances making them incomparable, and I am only comparing them across one dimension (salary + bonus). But I feel compelled to make this comparison.

Furthermore, in my opinion, becoming a programmer is much easier if we only compare the study methods. For programmers who want to land a job in a tech company, they need to master the coding interview by going through sites like LeetCode to solve problems. Once they mastered the numerous algorithms and developed a good handle on when and how to use different data structures to solve problems, they can apply that skill in the next and more complex problem. Programmers would get hands-on experience whether it's on the job, or off the job preparing for interviews. For actuaries, the knowledge we learn are often fragmented, abstract and irrelevant to our jobs. (Yes I hear a lot of actuaries in life insurance complaining CFE/QFI track actuaries about the uselessness of their exams if they are not doing risk management or hedging related work.)

Lastly, did I mention programmers do not have professional exams to take, while actuaries often get additional credentials such as CFA and to a lesser extend FRM to help advancing their career?

In any case, any comment is welcome.
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Last edited by koudai8; 08-14-2019 at 03:38 PM..
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Old 08-14-2019, 03:33 PM
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Depends on where you see yourself ending up down the road. I'm in a more traditional actuarial role but have a high ceiling on the corporate ladder rather than just being a programmer imo.
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Old 08-14-2019, 03:39 PM
Dr T Non-Fan Dr T Non-Fan is offline
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You should probably become a programmer.

Probably best for all of us.
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Old 08-14-2019, 03:43 PM
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Quote:
Originally Posted by Abelian Grape View Post
Depends on where you see yourself ending up down the road. I'm in a more traditional actuarial role but have a high ceiling on the corporate ladder rather than just being a programmer imo.
The room for upward growth and increases in salary are still greater for an actuary. Same comparison can be made to a pharmacist. They're going to start out higher but salary isn't going to go up as quickly as an actuary passing exams/taking new roles. Of course, the need to pass exams and find new roles is part of the problem I think OP is suggesting.
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Old 08-14-2019, 03:45 PM
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some people like life insurance and life insurance accessories
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Old 08-14-2019, 03:46 PM
koudai8 koudai8 is offline
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The room for upward growth and increases in salary are still greater for an actuary. Same comparison can be made to a pharmacist. They're going to start out higher but salary isn't going to go up as quickly as an actuary passing exams/taking new roles. Of course, the need to pass exams and find new roles is part of the problem I think OP is suggesting.
But I think it's pretty clear that an average entry-level actuaries will not catch up with an average software engineers for quite a few years, if ever. Considering the same compounding from raises and switching jobs which will give the SE an advantage.
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Old 08-14-2019, 03:47 PM
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Why don't we all just become traders? I heard you can make millions in bonus in your 20s. Or even better, start our own companies? I heard you can become a billionaire without finishing college.
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Old 08-14-2019, 03:56 PM
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Or better than what you've suggested in the OP, go P&C...
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Old 08-14-2019, 04:12 PM
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I wouldn't say I ever explicitly chose between the 2. So ive never really compared them. Are we making the assumption that anyone that became an actuary would have been an equally good soft dev?

I agree that soft dev looks like a good career if you can jump the right hoops. Only soft dev I know with a BS is making about 100k with 10 years (po town). DS masters Ive seen a few making 150k before 30.

lots of options to use tech skills to make money, choose the right path for you.
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Old 08-14-2019, 04:14 PM
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A lot of actuaries just don't like coding period. I would estimate that most of them have no interest in it whatsoever and find that the actuarial route is the best path for their interests. There are ones that do of course, and many of them leave to go into software dev and related fields.
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