BSC in Actuarial Science and Risk Management

BSC in Actuarial Science and Risk Management

BSC in Actuarial Science and Risk Management Presentation by Mark Farrell (Actuarial Science and Risk Teaching Fellow)

What is an Actuary? Someone who uses mathematics to solve business problems An actuary is a business professional who deals with the financial impact of risk and uncertainty Actuaries apply financial and statistical theories to solve real business problems.

What is an Actuary?

What does an actuary do? Employed to quantify financial risks Looks at past experience Models experience using statistical models Projects the model forward into the future. Estimates the timing and amount of future cashflows Puts a price (present value) on those expected future cashflows Advises the client on how to fund for, or mitigate against those risks.

Career Opportunities for Actuaries Actuarial pensions consultancies/firms Insurance and reinsurance industry Risk management in finance/banking Public sector/government agencies

Where do actuaries work? The majority of actuaries are based in London Edinburgh, Manchester, Birmingham, Glasgow also have many actuarial firms Bristol, Cardiff, York have more than a handful of firms Northern Ireland has 6 actuarial firms

Actuaries in Northern Ireland?

Actuaries in London? Aon Consulting Limited APR LLP AXA UK Barnett Waddingham LLP BDO Stoy Hayward Buck Consultants Deloitte LLP EMB Consultancy LLP Financial Services Authority GAAPS Actuarial Genworth Financial Government Actuary s Department Grant Thornton UK LLP HSBC Actuaries and Consultants Limited Hymans Robertson LLP Jardine Lloyd Thompson plc KPMG Lane Clark & Peacock LLP Lucida plc Mercer Limited Milliman Limited Munich Re UK Life Branch Nigel Sloam & Co Actuaries & Consultants Pearl Group Punter Southall Limited Prudential Royal London Group Towers Perrin Watson Wyatt Ltd Xafinity Consulting Ltd

Salary Rewards On qualifying as an actuary salaries are in excess of 45,000 and can be as high as 60,000 depending on location. Five years post qualification salaries can be in excess of 100,000 Job Opportunities in London, Birmingham, Manchester, Edinburgh, Belfast, Dublin Internationally recognised qualification job opportunities worldwide

Actuarial Science and Risk Management Key Features Degree commenced September 2007 Original name was Actuarial Studies Four year degree (3 years at university; 1 in an industrial placement) Second cohort of students started placement this year A broad based intellectually demanding degree which includes: mathematics, statistics, probability, actuarial modelling, finance, accounting and economics

Actuarial Science and Risk Management Entry Grades For entry in September 2011 A-Level requirements will be AAA plus a fourth A at AS-level One of the A-Levels must be in Mathematics Likely intake in September 2011 is 40 home based students. Further Mathematics is not a requirement but is recommended.

Actuarial Science and Risk Management Year One Semester 1 Financial Reporting and Analysis Probability Microeconomics Semester 2 Statistics Macroeconomics Financial Institutions and Markets

Actuarial Science and Risk Management Year Two Semester 1 Actuarial Methods in General Insurance Investment Analysis Placement Learning Semester 2 Principles of Actuarial Modeling Actuarial Mathematics Mutual and Pension Fund Management

Actuarial Science and Risk Management Year Three Combines academic theory with industry relevant focus Year 3 is spent in a high quality and salaried actuarial placement Examples of placements will include: Spence & Partners, Kerr Henderson Hewitt, Buck Consulting, Allstate, AXA, several Lloyds syndicates... Located in, London, Edinburgh, Manchester, Birmingham, Bristol, Dublin Belfast and overseas.

Placement Year The Student Perspective The placement year has been the best experience of my degree so far. Moving away from home and working in London has really opened my eyes to what is out there. Great to be able to see insurance module being put into practise and also learning new terminology. Structured learning good incorporation of class and work based learning. Very friendly team and company. Placement is a good stepping stone for the final year. I particularly liked putting my understanding of the pensions module into practice. I Feel I have a better understanding of what an actuary does which will help in other modules and future career decisions. The first two years of university has given a useful broad base of economics, maths and finance and actuarial however being here has really given insight to what to expect in future

Actuarial Science and Risk Management Year Four Semester 1 Stochastic Processes Capital Markets Time Series Financial Econometrics Semester 2 Actuarial Modelling Financial Engineering Fixed Income Instruments

Accreditation What s it all about? The Actuarial Studies degree at Queen s has been accredited by the Institute of Actuaries Exemption from subjects CT1 CT8 of the professional exams Students must achieve 65% or more to get all 8 exemptions

After your degree Enter paid employment and undertake professional examinations as offered by the Institute of Actuaries. Professional examinations will take around a further 3 / 4 years to complete. Enter paid employment in a risk management setting but not progressing to become an actuary Continue in education and study the Msc in Finance or the Msc in Risk Management

Checklist when choosing your degree Does the degree subject material match my strengths? Is the degree structure interesting? Is the university offering the degree of good quality? Are the academics teaching on the programme engaged in high quality teaching and research? Are the students leaving the degree employable and in rewarding careers?

Who is this degree for? Enthusiastic about Mathematics? Going to achieve an A at A-level Mathematics without any problems? Want a career where numerical skills are highly regarded? Want a professional career which is highly regarded around the world For more information about Actuarial Science and Risk Management visit the website: http://www.qub.ac.uk/mgt/

A Practical Example The government is concerned about the future occurrence of extremely harsh winters, over the next 5 years, leading to high costs for the various councils. They have decided to ask an actuary to perform an analysis and calculate the expected cost today of dealing with the repercussions. Discuss: - What high level information might an actuary require to perform the analysis?

A Practical Example The actuary has calculated that the yearly costs for winters classified as mild, normal and severe are 200 million, 400 million and 700 million respectively. He has also calculated the probability of these winter types occurring over each of the next 5 years as 0.2 (mild), 0.7 (normal) and 0.1 (severe). Current interest rates are 10%. What is the expected cost today?

A Practical Example: Solution The expected annual cost (in millions) is: (200x0.2)+(400x0.7)+(700x0.1) = 40+280+70 = 390 Million The expected total cost today over the next 5 years is: 390/1.1 + 390/1.1 2 + 390/1.1 3 + 390/1.1 4 + 390/1.1 5 = 1,478 Million (or 1.5 Billion)