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  #11  
Old 11-16-2017, 01:46 PM
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Eddie Smith
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Hi, so I am working as an intern at a life insurance company. I was there full time this summer, continue to work part time, and have accepted a job in January.

I am worried about a couple of things for the profession.

Can insurance companies survive long term in a low interest environment? I know that the short term rate has started to go up, but the long term rate has not. The yield curve is flattening out which seems like it will be very negative for insurance companies.
Believe it or not, there was a time when people in the life insurance industry wondered if they could survive long-term in an ultra-high interest rate environment. The industry responded by going eyeball deep in deferred annuities, inventing UL, and later variable products to continue competing with investment products.

Key point #1: nothing lasts forever, but even the slow-moving insurance industry is good at adapting to economic environments.

Key point #2: interest rates are not guaranteed to be this low forever, and no one can predict what will happen with interest rates in the long-term.

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Also, it seems that many jobs that are done by a team of 10 people could be automated and turned into a 2 or 3 person job fairly easily. It seems that companies will need way less actuaries in the upcoming years because of this.
This is a rational perspective from someone in an intern position. Keep in mind that a lot of intern work could be automated, but that's not really the principle goal of intern work. You have to start somewhere, and the closer you can start to the ground, the better. There are plenty of credentialed actuaries doing work that does not lend itself to automation at all. Of course, I've seen plenty of FSAs doing work that could be automated, too, but I would argue that automating their drudgery would actually create more opportunities for FSAs (e.g. more time for analysis and less time spent on data hygiene).

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Finally I feel as though the exams are a huge waste of time and are preventing actuaries from learning valuable skills such as python, and data science related topics.
When I took exams, it did not stop me from amassing tons of additional technical skills. Take the initiative to learn as much as you can and avoid a victim mindset. Out-work the pack and differentiate yourself as much as possible.
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Last edited by E; 11-16-2017 at 01:51 PM..
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  #12  
Old 11-16-2017, 03:09 PM
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Carol Marler
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The real danger to life insurers is tax law disruption.
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  #13  
Old 11-16-2017, 03:35 PM
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The real danger to life insurers is tax law disruption.
Sure. But that is a political/regulatory risk that is difficult to mitigate, other than through intense lobbying.
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  #14  
Old 11-28-2017, 12:42 PM
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The real danger to insurers is technological disruption, specially at the underwriting level (which is expensive). That is where insuretech firms come in. They automate that process and make it far cheaper and faster, which can then ultimately result in better prices and more satisfied customers.
I concur. Actuaries aren't going away. But I'd be nervous if I was a junior life underwriter.

I'm taking a course on reserving. Lots of calculator work. Then we have a guest speaker who comes in to show us how it works in practice. Her point was basically 'we have computers do that crap, I'm expected to know what goes up and down if I change this input'. That's not getting automated any time soon.

But underwriting, companies are doing an excessive amount of work to decrease the human input on that job (at least on the life side). there's probably some non-traditional actuarial work down that rabbit hole.

that and agents. the companies I've spoken to on the subject want to make the entire retail distribution system disappear and replace it with a computer.
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  #15  
Old 11-28-2017, 12:45 PM
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the companies I've spoken to on the subject want to make the entire retail distribution system disappear and replace it with a computer.
Dream on. I'll believe this when it happens. If I'm still around by then.
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  #16  
Old 11-28-2017, 04:20 PM
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