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UCSD – Actuarial Information Presentation & Recruiting Event

So You Want To Be An Actuary?

October 30, 2017

Alice Alsberghe, ASA, MAAA Overview • What is an Actuary? • What do Actuaries do? • Where do Actuaries work? • What is great about the actuarial profession? • What skills and talents are needed? • How can you become an Actuary? • What is it like to work at Cheiron?

Note: Portions of this presentation were taken from the and Casualty Society of Actuaries presentation “Be An Actuary”. October 30, 2017 1 What is an Actuary? An actuary is a person who:

– Analyzes, manages and measures the financial implications of future – Develops and validates financial models to guide decision making

– Keystone of Cheiron: Interactive financial modeling to simulate the financial future depending on assumed key risk variables

October 30, 2017 2 What do Actuaries do? • Actuaries manage risk. – We use a combination of strong analytical skills, business knowledge, and understanding of human behavior to manage today’s complex facing our society.

• What is risk? – Risk is the chance that an undesirable event will occur. – But risk is opportunity. That’s where an actuary comes in.

October 30, 2017 3 Where do Actuaries work? • Companies • Consulting Firms • Government Insurance Departments • Banks and Firms • Large Corporations • Public Accounting Firms • Anywhere is needed

October 30, 2017 4 Where do Actuaries work?

• Insurance Industry Property (home) and casualty (auto)  Life and Health • Employee Benefits Industry  Retirement Benefits  Health Benefits Social Security • Industry  Banks, investing, risk management  Mergers & Acquisitions

October 30, 2017 5 Where do Actuaries work?

Source: D.W. Simpson & Company, Inc., 2017 Salary Survey

October 30, 2017 6 Where do Actuaries work?

Source: D.W. Simpson & Company, Inc., 2017 Salary Survey

October 30, 2017 7 What is great about the profession?

• Top-ranked job – Work environment, employment outlook, job security, growth opportunity, salary • High earning potential – Entry level actuary starting salary $45,000 - $65,000 – Experienced fellows earn $150,000 - $250,000 + • No cost of graduate school – “learn while you earn” • Skills are highly transferable to other industries and job responsibilities • Potential for travel (as a consultant) or a non-travel 9-to-5 job (as a non-consultant) • High demand – less sensitive to economic cycles • Allows for work/life balance • Make an impact – manage today’s complex risks facing our society

October 30, 2017 8 Earning Potential

Source: D.W. Simpson & Company, Inc., 2017 Salary Survey October 30, 2017 9 Earning Potential

Source: D.W. Simpson & Company, Inc., 2017 Salary Survey October 30, 2017 10 What skills and talents are needed? • Knowledge of math and • Computer skills • Keen analytical, project management, and problem solving skills • Attention to detail • Solid communication skills (oral & written) • Good business sense (know what is important) • Motivation, creativity, independence • Ability to work with others

October 30, 2017 11 How can you become an Actuary?

• An actuary achieves professional status by passing examinations to prove a certain level of knowledge

• Actuarial examinations are administered by the Casualty Actuarial Society (CAS) and Society of Actuaries (SOA) – Preliminary exams are administered jointly – Examinations are held multiple times a year depending on the exam

• Two professional designations exist for each organization: – Associate (either ASA or ACAS) – Fellow (either FSA or FCAS)

• You can earn while you learn - employers support actuarial trainees taking exams by providing exam study time on the job

October 30, 2017 12 Preliminary Education Structure • Prerequisites – – Linear Algebra • Validation by Educational Experience (VEE) – VEE are obtained through college courses, standardized exams, approved educational experiences, and transitional exams for: • VEE- Applied Statistics • VEE- Corporate Finance • VEE-

October 30, 2017 13 Preliminary Education Structure • Preliminary Examinations – Exam 1/P: – Exam 2/FM: Financial – Exam 3F/MFE: Models for – Exam 3L/MLC: Life Contingencies – Exam 4/C: Construction and Evaluation of Actuarial Models • In addition to the preliminary education, each society has additional requirements to achieve professional designations

October 30, 2017 14 How can you become an Actuary?

• Acquire a well-rounded curriculum, including classes approved for VEE • Sharpen your communication skills (especially writing/grammar) • Take advantage of opportunities to give presentations • Sharpen your computer skills • Get good grades (3.0 GPA required at Cheiron) • Take actuarial exams while in school (at least 1 exam for internship at Cheiron and 2 exams for new hires) • Find an actuarial internship

October 30, 2017 15 What is it like to work at Cheiron?

• Employee benefits consulting firm • Employee-owned • All revenue derived from actuarial consulting services • Two primary specialty areas, retirement and health • Clients include public sector entities, multiemployer plans, corporations and nonprofit organizations

October 30, 2017 16 What is it like to work at Cheiron? • Nine offices nationwide (plus 4 satellites) • 100+ Employees • Serve over 300 and health funds throughout the country • Excellent reputation in our industry (plan sponsors and competitors) • Significant growth on the West Coast – Offices in San Diego (Solana Beach), Los Angeles, Oakland, and Portland (satellite in Seattle)

October 30, 2017 17 Cheiron’s Advantage

N Year end 2017 Percentiles 5% 25% 50% 75% 95% return 8.5% ER Contr Rate 0.0% 0.0% 11.6% 20.9% 31.3% risk 12.0% Funding Ratio 190% 138% 106% 84% 66%

150%

Funding Ratio 100%

50%

25%0%

20% State Contribution Rate 15% 10% 5% $1,600 0% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10%

Individual Information Defined Contribution Percentages Growth Starting $1,400 Hire 33 401(a) - Money Purchased 0.0% Salary Increase 4.0% $ 1,000 Now 43 401(k) - Profit Sharing 0.0% Merit Increase 2.0% Retirement 65 457 - Deferred Compensation 5.0% Cost of Living 3.0% Net Cash Flow -5.0% Average Salary $ 43,000 401(a) - Fixed $ Match - MD employee $600 Growth Expected Annual Return 7.8% 401(a) - Percentage 0.0% Net Cash Flow Growth 0.0% View Teachers(T)/Employees(E) E $1,200 Level Returns Volatile Returns View Comparison at Age 75 MD MD DBDB Benefit Benefit MD RetirementNet Replacement Employer Cost Ratio NET CASH LEVEL Volatile EOY ASSETS DBDBDC Cola Cola DC DCDC Benefit Benefit DC EMPLOYEESTEACHERSTeachers DE Year FLOW RETURNS RETURNS level volatile DCDC Cola Cola DEDE SocialSocial Security Security MI $1,000 SSSS Cola Cola MIMI 1$ (50.0) 8.0% -2.0% $1,028.0 $930.5 MO MOMO NJ NJ NJ 2$ (50.0) 8.0% -6.0% $1,058.3 $826.2 PA PA PA UT UT 3$ (50.0) 8.0% -9.0% $1,091.0 $704.1 UT $800 VA VA VA 4$ (50.0) 8.0% 8.5% $1,126.3 $711.9 WV WV WV 0.00%0%0% 0.50% 20% 20% 40% 1.00% 40% 60% 60% 1.50% 80% 80% 100% 100% 2.00% 120% 120% 140% 2.50% 140% 160% 5$ (50.0) 8.0% 8.0% $1,164.5 $716.9 Net EmployerPercentage Cost ofAccrual Final Salary Rate Percentage of Final Salary Safe 6$ (50.0) 8.0% 9.0% $1,205.7 $729.2 $600 100% Endangered 90% 7$ (50.0) 8.0% 15.0% $1,250.2 $785.0 80% Seriously End. 70% 8$ (50.0) 8.0% 18.0% $1,298.2 $872.0 60% Critical $400 Probabilties 50% 9$ (50.0) 8.0% 24.0% $1,350.1 $1,025.6 40% reported 10 yr return= 8.0% 8.0% 30% doller10 weighted$ return= (50.0) 8.0%8.0% 20.0% $1,406.2 $1,175.9 20% $350 10% Asset Loss/(Gain) $230.3 $200 0% $300 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 % of Level Assets 83.6%

Millions $250

$200 $0 12345678910 $150

$100

$50

$0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 ($50)

($100)

($150) Contributions Ben+Exp Inv Ret Net Cash Flow

October 30, 2017 18 Why Join Cheiron? • Opportunity to work in both health and retirement practice areas before committing • Early exposure to client meetings • Extensive responsibility and ownership of work product early on in career • Work directly with senior consultants • Small enough for you to make a big impact • Less bureaucracy than other firms • Work/Life Balance

October 30, 2017 19 Helpful Resources • Be An Actuary – beanactuary.org • Society of Actuaries – soa.org • Casualty Actuarial Society – casact.org • Recruiting and Salary Surveys – dwsimpson.com • To learn more about internships and career opportunities at Cheiron – cheiron.us – [email protected]

October 30, 2017 20 Questions

October 30, 2017 21 Cheiron “Classic Values, Innovative Advice” Our Mission: To empower benefit plan sponsors to understand and better manage their benefit programs and their resulting financial risks through innovative technological applications and unsurpassed professional expertise.

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October 30, 2017 22 Cheiron (pronounced kī´· ron), the immortal centaur from Greek mythology, broke away from the pack and was educated by the gods. Cheiron became a mentor to classical Greek heroes, then sacrificed his immortality and was awarded in eternity as the constellation Sagittarius.

October 30, 2017