A Great Job Market, Actuarially Speaking

Chris Westfall
Chris Westfall

Actuaries are not only surviving the industry-wide employment apocalypse, they are flourishing.

Industry recruiters say that actuaries with insurance and reinsurance expertise remain highly sought after, weathering the employment crisis that has cost hundreds of thousands of jobs in the financial services industry.

And those actuaries with the relevant “asset side” experience to structure insurance linked securities continue to demand a premium over traditional liability focused actuarial professionals.

“Reinsurance actuaries that do work on alternative risk structures tend to earn more,” says Claude Penland, actuary and partner with the recruiting specialist DW Simpson Global Actuarial Recruitment in Chicago.

Penland explains that an actuary with 10 to 15 years of experience – and a fellow of the Casualty Actuarial Society – can demand anywhere between $150,000 to $300,000 per year base salary plus bonus.

An actuary with the relevant ILS expertise would then be able to demand a premium of ten percent to twenty percent over that base, he adds.

Part of that premium is because employers are pulling from a very small pool of experienced actuaries, says Tom Miller, principal with Pinnacle Group Actuarial Recruiting in Portsmouth, New Hampshire. Only a third of trained actuaries have the experience necessary to work in shops dedicated to insurance-lined securities, making them a rare find.

“This is a sub-specialty of the P/C side that typically is handled by professionals who are CFAs (Chartered Financial Analysts) and are able to work closely with investment professionals,” Miller says. “It’s a strong, niche market.”

That is not to say, however, that premium may suffer with the fate of asset-based employers like investment banks, Miller adds

“Reinsurance is where the demand is currently and that has not changed in the past several months,” Miller says. “Investment banks haven’t been employing too many people lately.”

Still, actuarial professionals are enjoying job security and pay increases anathema to the rest of the financial industry.

Experienced actuaries have seen an increase in total compensation of 25 percent to 30 percent over the past five years and this is due to a number of factors, according to Penland.

“I believe that as the demand for casualty actuaries has increased with the introduction of the Class of 2005 reinsurers,” Penland adds. He adds that the increased use of predictive modeling and data mining methods — and with the amount of capital that has come into this part of the economy for the last decade — had pushed salaries higher.

“Virtually anywhere there is property and casualty insurance/reinsurance sold, we’re seeing an increased demand for actuarial talent,” Penland says. “With the current global financial crisis, clients may take a little longer to interview and decide which candidates to hire, but they are still hiring.”