8 ms·

One of the most frustrating aspects of the process is that once outside of insurance/insurance-adjacent industries, the credentials are useless. I have my FSA (

One of the most frustrating aspects of the process is that once outside of insurance/insurance-adjacent industries, the credentials are useless. I have my FSA (fellowship of the SOA) and CERA (chartered enterprise risk analyst) from the SOA. I no longer wanted to work in insurance and left for data science. I felt the need to obtain a graduate degree to feel qualified enough for the data science space. My Master's degree was a cake-walk compared to the actuarial process but that is what my peers care about, and I always feel not quite at the same level as my peers with PhD's. It's even more constrained than my experience. The U.S has two actuarial governing bodies: the CAS and SOA - the former handles P&C, the latter just about everything else (life, health, retirement). The two organizations hate each other and it's almost impossible to get a respectable job in one industry if you have the wrong credentials. What makes it even more crazy is that the two orgs have the same exact first couple of qualifying exams. My advice has always been: only consider dedicating your time to these exams if you're highly certain this is the career you want. The pay isn't as great as it once was, you're constrained to legacy industries, the process is as time-consuming as a PhD without getting the respect that comes along with it, and you need to decide early on which area of insurance you'll want to practice.

sjg007 5y ago
You came to the right place if you want to disrupt things with a startup.
- throwawaygh 5y ago
  I'm not sure there's much to disrupt in that industry.
tzs 5y ago
> you're constrained to legacy industries Is insurance really a legacy industry?
- monkeybutton 5y ago
  The incumbent companies in that space are.
- MattGaiser 5y ago
  They are a strong candidate for greatest technological backwater.
- aqualinux 5y ago
  The incumbent insurance companies maintain their position in the market through having large amounts of capital which lets them ultimately offer lower premiums than a new competitor entering the market which may have less capital. This means the legacy insurance companies don't need to prioritise investing in innovation to maintain their position, hence the old companies stay around.
  - civilized 5y ago
    Also, insurance just doesn't have much interesting space for innovation. In life insurance, for example, products other than simple term insurance really shouldn't exist. They're mostly just Rube Goldberg tax sheltered savings accounts for the wealthy. In theory there ought to be some opportunity in the area of incentivizing people to improve their health behaviors. But carriers have been much slower to move on that than to futz around with the latest financial engineering and tax avoidance techniques.
    - mleonhard 5y ago
      I tried to buy decreasing term life insurance, where the benefit decreases continuously over 20 years, matching the needs of my family. I consulted with several agents and none of them could sell it to me. The best they could do was to divide the term into three time periods with different benefit amounts. One agent told me that most customers drop their policy after a few years. The companies earn most of their income from the initial periods of policies, when payouts are rare.
      - lotsofpulp 5y ago
        I applied for term life insurance at 3 or 4 life insurance companies, and they all allowed you to reduce the benefit amount a few times over the term. Not every year, but they said it was no problem if you wanted to halve the benefit halfway through or even a second time after that (and they would lower the premiums commensurately of course). I have Principal and Protective in the US.
erik998 5y ago
I liked watching these videos from Ostaszewski https://www.youtube.com/watch?v=Jc335qIQZgg https://www.youtube.com/watch?v=Jc335qIQZgg https://math.illinoisstate.edu/actuary/faculty_staff/ https://math.illinoisstate.edu/actuary/faculty_staff/ https://math.illinoisstate.edu/krzysio/pass.html?_url=%2Fpass https://math.illinoisstate.edu/krzysio/pass.html?_url=%2Fpas...
aqualinux 5y ago
Qualified actuary here also from UK. You're right about insurance being a legacy industry. In terms of the exams, if you can pass A-level maths, you can pass the actuarial exams. I found the main reason they were considered hard is not because of the subject matter, but due to the amount of content that had to be learned in a short space of time.
- xeRTRex 5y ago
  And the esoteric notation!
- zaphirplane 5y ago
  > Insurance is legacy why it’s hardly getting superseded at least for car, home, medical, life, injury , income and travel Actuarial ppl shouldn’t really care if it’s run on mainframe not k8s (if that’s the reason)
- pfortuny 5y ago
  The fact that its day-to-day application it is “legacy” is probably a good thing, as reinforced concrete is already “legacy” in tha sense or stailess steel.
Aeolun 5y ago
Based on the question in the article the skills you get from this would carry over.
- xeRTRex 5y ago
  The fundamentals of actuarial science: probability, time-value of money, and tail-risk have absolutely benefited me. I do gripe that much of the material is out-dated. I sat for all my exams within the past 15 years and (for example) we had a lot of option pricing models that have been archaic since the 90's and no machine learning (material has been updated with ML, but it constantly feels a couple decades behind).
  - aqualinux 5y ago
    The ML skills update was a very basic update. Proper ML skills take a long time to learn and can't be taught through an exam, the material for which gets forgotten very quickly afterwards.
civilized 5y ago
The exams have two ultimate objectives: 1. Perpetuate the actuarial guild 2. Shovel money from aspiring actuaries and insurance companies into the SOA's coffers They aren't really, and aren't really meant to be, a marker of general, transferable intellectual skills or achievement outside the insurance industry. So it's not surprising that no one other than the parties involved (the SOA, aspiring actuaries, and insurance companies) recognizes them as a meaningful credential.
- zeckalpha 5y ago
  Seems like the association should do a, you know, risk analysis on what will happen if these trends continue.
- newyankee 5y ago
  In India, I feel the same about Chartered accountants and Lawyers. Not trying to dismiss their knowledge and expertise, but it is crazy the amount of stuff you can do yourself in this day and age but still need their signature. Low key I feel the same about some of the lower skilled Doctors too, although it is a very different ball game risk wise.
- seibelj 5y ago
  This is the same model of all licenses, which is inherited from the guild system common throughout all of human history (the government (monarchs, oligarchies, democracies) protect favored industries from competition). I put them on a spectrum: - Licenses that anyone can obtain by showing the requisite skills. This is the least nefarious, and the clearest example would be driver's licenses. In a perfect world anyone can apply for and receive a driver's license. It gets corrupted by requiring training from other state-approved schools, but in its purest form it achieves, "If you can pass the driver's test, you get a license." Interestingly enough even advanced degrees sometimes achieve this goal - in California anyone can take the bar exam and get licensed to practice law without ever attending an accredited law school. Every other state requires you to attend law school (and the required cost / debt) before getting licensed. - Licenses that you can obtain only after attending approved schools. This would be doctors, dentists, accountants, and nearly every lawyer (see above). The filter for the guild is getting into the approved school. If you manage to get accepted into and complete the program, you will succeed in getting licensed based on raw intelligence (meritocracy). The primary filter that protects the guild is getting into the approved schools (although there exists a subset of people who make it into school and fail the license exam, most commonly in law). - Licenses that anyone can get, but require some absurd amount of hours of training, which usually costs absurd amounts of money that achieves nothing and are government mandated because of various entities that lobby politicians. These would be all of the blue-collar guilds like hair stylists, interior decorators, and being a florist in Louisiana (seriously - https://www.kplctv.com/story/37848470/requirements-for-louisiana-floristry-license/ https://www.kplctv.com/story/37848470/requirements-for-louis...). You can learn the basics of hygiene and sweeping hair in a 60 minute youtube video, but the 1000 hour requirement in a for-profit cosmetology school in Massachusetts (https://www.mass.gov/service-details/how-can-i-become-a-cosmetologist-manicurist-or-an-aesthetician https://www.mass.gov/service-details/how-can-i-become-a-cosm...) is absolutely absurd, especially considering becoming an EMT - someone that literally saves lives and gets dying people to hospitals - is a $950 six-month part time program (https://www.boston.gov/departments/emergency-medical-services/how-become-boston-ems-emt https://www.boston.gov/departments/emergency-medical-service...). Even worse, very rarely these licenses are transferrable between states, making the blue collar employee both indebted and chained to a particular area. - Licenses that anyone can get, but are purely graded on a curve in order to protect existing members. Finally we get to the actuarial licenses! Similar licenses would be Michelin star restaurants and wine sommeliers. Only a very small community appreciates these licenses, but the value to those that have them is high via the artificial scarcity. In order to keep them fair they offer the test(s) to anyone, but grade on an absurdly difficult curve to make them essentially random, and then take only the top scorers to preserve their scarcity. The process to get the license is to cram test exams ad infinitum and continue to take the test until you randomly get the top score. They ultimately mean nothing, at least compared to the amount of people who deserve the license vs. those that have them. In summation, licenses are an atrocious relic of a bygone era, but because of economic incentives they live on in a variety of forms and have little chance of ever being eliminated. Addendum - occasionally I will see an HN poster asking why there isn't some sort of certification or license for software engineers (perhaps in some countries these exist, but not in the USA where software engineers are the top-tier of salaries across all industries). My argument against this is that the lack of licenses is exactly why US tech companies dominate the world - anyone can succeed whether they are an ethnic or sexual minority, autistic / neuroatypical, paraplegic, etc. can learn to code and make an impact - and at any age! Licenses mean nothing to technology, and the moment they appear is a signal that something significant has changed and the industry in that country will collapse when compared to all the other countries that don't artificially restrict talent.
starwind 5y ago
> The pay isn't as great as it once was Not to mention there aren't that many entry-level openings so you don't get much choice on where you live after college
pyuser583 5y ago
I’ve hear actual certification held out as a decent alternative to requiring a degree for everything. I’ve also seen similar complaints from lawyers: you’re basically stuck in whatever state you passed the bar exam in.
noxvilleza 5y ago
When I left high school I loved maths and stats, so I started a degree in Actuarial Science. Was totally bored by it by the end of first year - could not be motivated at all by it. There was no semblance of problem solving, it was primarily just applying a few types of formulae to a situation. Sometimes normalizing some input, sometimes adjusting something in a tiny way - but essentially the same stuff over and over again. Looked at past-papers for years 2 and 3, and it didn't any more interesting. I realized towards the end of first year that the idea of doing an entire degree and then 4-10 years doing board exams just seemed a sort of narrow path to take - few alternatives to swap to once you go too far. Ended up changing to Computer Science.

sjg007 5y ago

You came to the right place if you want to disrupt things with a startup.

throwawaygh 5y ago
I'm not sure there's much to disrupt in that industry.

tzs 5y ago

> you're constrained to legacy industries Is insurance really a legacy industry?

monkeybutton 5y ago
The incumbent companies in that space are.
MattGaiser 5y ago
They are a strong candidate for greatest technological backwater.
aqualinux 5y ago
The incumbent insurance companies maintain their position in the market through having large amounts of capital which lets them ultimately offer lower premiums than a new competitor entering the market which may have less capital. This means the legacy insurance companies don't need to prioritise investing in innovation to maintain their position, hence the old companies stay around.
- civilized 5y ago
  Also, insurance just doesn't have much interesting space for innovation. In life insurance, for example, products other than simple term insurance really shouldn't exist. They're mostly just Rube Goldberg tax sheltered savings accounts for the wealthy. In theory there ought to be some opportunity in the area of incentivizing people to improve their health behaviors. But carriers have been much slower to move on that than to futz around with the latest financial engineering and tax avoidance techniques.
  - mleonhard 5y ago
    I tried to buy decreasing term life insurance, where the benefit decreases continuously over 20 years, matching the needs of my family. I consulted with several agents and none of them could sell it to me. The best they could do was to divide the term into three time periods with different benefit amounts. One agent told me that most customers drop their policy after a few years. The companies earn most of their income from the initial periods of policies, when payouts are rare.
    - lotsofpulp 5y ago
      I applied for term life insurance at 3 or 4 life insurance companies, and they all allowed you to reduce the benefit amount a few times over the term. Not every year, but they said it was no problem if you wanted to halve the benefit halfway through or even a second time after that (and they would lower the premiums commensurately of course). I have Principal and Protective in the US.

erik998 5y ago

I liked watching these videos from Ostaszewski https://www.youtube.com/watch?v=Jc335qIQZgg https://www.youtube.com/watch?v=Jc335qIQZgg https://math.illinoisstate.edu/actuary/faculty_staff/ https://math.illinoisstate.edu/actuary/faculty_staff/ https://math.illinoisstate.edu/krzysio/pass.html?_url=%2Fpass https://math.illinoisstate.edu/krzysio/pass.html?_url=%2Fpas...

aqualinux 5y ago

Qualified actuary here also from UK. You're right about insurance being a legacy industry. In terms of the exams, if you can pass A-level maths, you can pass the actuarial exams. I found the main reason they were considered hard is not because of the subject matter, but due to the amount of content that had to be learned in a short space of time.

xeRTRex 5y ago
And the esoteric notation!
zaphirplane 5y ago
> Insurance is legacy why it’s hardly getting superseded at least for car, home, medical, life, injury , income and travel Actuarial ppl shouldn’t really care if it’s run on mainframe not k8s (if that’s the reason)
pfortuny 5y ago
The fact that its day-to-day application it is “legacy” is probably a good thing, as reinforced concrete is already “legacy” in tha sense or stailess steel.

Aeolun 5y ago

Based on the question in the article the skills you get from this would carry over.

xeRTRex 5y ago
The fundamentals of actuarial science: probability, time-value of money, and tail-risk have absolutely benefited me. I do gripe that much of the material is out-dated. I sat for all my exams within the past 15 years and (for example) we had a lot of option pricing models that have been archaic since the 90's and no machine learning (material has been updated with ML, but it constantly feels a couple decades behind).
- aqualinux 5y ago
  The ML skills update was a very basic update. Proper ML skills take a long time to learn and can't be taught through an exam, the material for which gets forgotten very quickly afterwards.

civilized 5y ago

The exams have two ultimate objectives: 1. Perpetuate the actuarial guild 2. Shovel money from aspiring actuaries and insurance companies into the SOA's coffers They aren't really, and aren't really meant to be, a marker of general, transferable intellectual skills or achievement outside the insurance industry. So it's not surprising that no one other than the parties involved (the SOA, aspiring actuaries, and insurance companies) recognizes them as a meaningful credential.

zeckalpha 5y ago
Seems like the association should do a, you know, risk analysis on what will happen if these trends continue.
newyankee 5y ago
In India, I feel the same about Chartered accountants and Lawyers. Not trying to dismiss their knowledge and expertise, but it is crazy the amount of stuff you can do yourself in this day and age but still need their signature. Low key I feel the same about some of the lower skilled Doctors too, although it is a very different ball game risk wise.
seibelj 5y ago
This is the same model of all licenses, which is inherited from the guild system common throughout all of human history (the government (monarchs, oligarchies, democracies) protect favored industries from competition). I put them on a spectrum: - Licenses that anyone can obtain by showing the requisite skills. This is the least nefarious, and the clearest example would be driver's licenses. In a perfect world anyone can apply for and receive a driver's license. It gets corrupted by requiring training from other state-approved schools, but in its purest form it achieves, "If you can pass the driver's test, you get a license." Interestingly enough even advanced degrees sometimes achieve this goal - in California anyone can take the bar exam and get licensed to practice law without ever attending an accredited law school. Every other state requires you to attend law school (and the required cost / debt) before getting licensed. - Licenses that you can obtain only after attending approved schools. This would be doctors, dentists, accountants, and nearly every lawyer (see above). The filter for the guild is getting into the approved school. If you manage to get accepted into and complete the program, you will succeed in getting licensed based on raw intelligence (meritocracy). The primary filter that protects the guild is getting into the approved schools (although there exists a subset of people who make it into school and fail the license exam, most commonly in law). - Licenses that anyone can get, but require some absurd amount of hours of training, which usually costs absurd amounts of money that achieves nothing and are government mandated because of various entities that lobby politicians. These would be all of the blue-collar guilds like hair stylists, interior decorators, and being a florist in Louisiana (seriously - https://www.kplctv.com/story/37848470/requirements-for-louisiana-floristry-license/ https://www.kplctv.com/story/37848470/requirements-for-louis...). You can learn the basics of hygiene and sweeping hair in a 60 minute youtube video, but the 1000 hour requirement in a for-profit cosmetology school in Massachusetts (https://www.mass.gov/service-details/how-can-i-become-a-cosmetologist-manicurist-or-an-aesthetician https://www.mass.gov/service-details/how-can-i-become-a-cosm...) is absolutely absurd, especially considering becoming an EMT - someone that literally saves lives and gets dying people to hospitals - is a $950 six-month part time program (https://www.boston.gov/departments/emergency-medical-services/how-become-boston-ems-emt https://www.boston.gov/departments/emergency-medical-service...). Even worse, very rarely these licenses are transferrable between states, making the blue collar employee both indebted and chained to a particular area. - Licenses that anyone can get, but are purely graded on a curve in order to protect existing members. Finally we get to the actuarial licenses! Similar licenses would be Michelin star restaurants and wine sommeliers. Only a very small community appreciates these licenses, but the value to those that have them is high via the artificial scarcity. In order to keep them fair they offer the test(s) to anyone, but grade on an absurdly difficult curve to make them essentially random, and then take only the top scorers to preserve their scarcity. The process to get the license is to cram test exams ad infinitum and continue to take the test until you randomly get the top score. They ultimately mean nothing, at least compared to the amount of people who deserve the license vs. those that have them. In summation, licenses are an atrocious relic of a bygone era, but because of economic incentives they live on in a variety of forms and have little chance of ever being eliminated. Addendum - occasionally I will see an HN poster asking why there isn't some sort of certification or license for software engineers (perhaps in some countries these exist, but not in the USA where software engineers are the top-tier of salaries across all industries). My argument against this is that the lack of licenses is exactly why US tech companies dominate the world - anyone can succeed whether they are an ethnic or sexual minority, autistic / neuroatypical, paraplegic, etc. can learn to code and make an impact - and at any age! Licenses mean nothing to technology, and the moment they appear is a signal that something significant has changed and the industry in that country will collapse when compared to all the other countries that don't artificially restrict talent.

starwind 5y ago

> The pay isn't as great as it once was Not to mention there aren't that many entry-level openings so you don't get much choice on where you live after college

pyuser583 5y ago

I’ve hear actual certification held out as a decent alternative to requiring a degree for everything. I’ve also seen similar complaints from lawyers: you’re basically stuck in whatever state you passed the bar exam in.

noxvilleza 5y ago

When I left high school I loved maths and stats, so I started a degree in Actuarial Science. Was totally bored by it by the end of first year - could not be motivated at all by it. There was no semblance of problem solving, it was primarily just applying a few types of formulae to a situation. Sometimes normalizing some input, sometimes adjusting something in a tiny way - but essentially the same stuff over and over again. Looked at past-papers for years 2 and 3, and it didn't any more interesting. I realized towards the end of first year that the idea of doing an entire degree and then 4-10 years doing board exams just seemed a sort of narrow path to take - few alternatives to swap to once you go too far. Ended up changing to Computer Science.