Transition to actuarial science

[daveyrocket]

Is there anyone here who switched from physics to actuarial work? I am looking to get into the actuarial field, and I'm signed up to take exam P/1 next month. The material seems easy, no real worries about that (of course, I am still planning to study it as much as possible before the exam). The main difficulty I see for myself is that there aren't many jobs in actuarial science on the west coast. There are some but I don't know how much competition exists for them. I have some questions:

What was your experience like?
How were the tests? (Especially the tests after the first two.)
How far have you gone in advancing in the actuary field?
How much difficulty did you face in getting a job?
In what ways did you leverage your background in physics to prospective employers? I see a potential difficulty here in saying things like "I'm smarter than the other schmucks applying for this job because I have a PhD in physics" as coming across too arrogant, but at the same time there is some truth to that. How does one present this "diplomatically" enough?

 

[Locrian]

I earned my masters in physics in 2008 and started working the same year in an actuarial analyst position.

Before I begin answering your questions I need to emphasize something important about actuarial employment. Actuarial work is a business job, not a math or science job. Actuaries are sophisticated businesspeople, and some of them may even be mathematicians (to one degree or another), but their work is not primarily math or physics.

What was your experience like?

It’s been very positive. I like the profession and I like the work I do – I’m happy with both the job and the career so far.

It is relative though. When I think back to the time I worked in science & engineering, I freaking love my job. When I get back from a three day excursion to find that some tiny error I made right before leaving has blown up the entire department and cost forty man hours to fix, I, uh, don’t love my job. That’s pretty rare though - on average, I really like my work and look forward to going in each day.

How were the tests? (Especially the tests after the first two.)

They’re hard. The material typically isn’t (though some people have trouble with how independent one must be to learn it), but the tests are. They are mostly hard because the pass level is set to fail the majority of test takers. Sure, 1/P is easy, but who is your competition? By the time you take your 5th exam, being in the top 40% is a lot harder. The closest comparison you’ve experienced are the physics qualifying exams. Imagine taking all the qualifying exams back to back (easy, right?), but then having only the top 40% of the grades pass. Not as easy. The majority of people who fail later actuarial exams do so by one to two questions; there’s a random element that those who haven’t taken the tests don’t appreciate. I should also emphasize that the actuarial exams are often intentionally deceptive; they work hard to trick you into putting in the wrong answer. That wasn’t something I really experienced in my college education.

That being said, anyone with a graduate degree in physics should be able to pass the actuarial exams, likely on the first try (I have). I just strongly suggest they be taken seriously. After all, there are even physics grads that have trouble with the physics qualifying exams, which are much easier.

How far have you gone in advancing in the actuary field?

I am not credentialed yet, though I am reasonably close (all preliminaries passed). I’ve been promoted at my job and am involved in projects that are significantly more advanced than the entry level work I started on.

How much difficulty did you face in getting a job?

None, but that is unusual. The job market for entry level analysts is ugly right now. I mean, it’s still better than most other careers out there, but the competition is fierce. Two exams at least will be necessary to be competitive, though I got mine with one. It’s a numbers game; maximize the number of people interested in your resume. You’ll really want to be geographically mobile for your first job.

In what ways did you leverage your background in physics to prospective employers?

I didn’t; I actually emphasized the broadness of my undergraduate coursework. Most employers will see little value in your prior education, so you want to emphasize specific skills and overall flexibility. (Side note: most employers don’t even care about a masters in actuarial science; they really don’t care about your choice of coursework, period, though they may place emphasis on grades.) They will see value in your ability to take hard tests, assuming you’ve demonstrated such ability. They will also value some skills you may have learned – programming, for instance. My suggestion is to sell yourself as a reasonably bright person with a wide variety of skills who wants to do something new. . . for years.

I see a potential difficulty here in saying things like "I'm smarter than the other schmucks applying for this job because I have a PhD in physics" as coming across too arrogant, but at the same time there is some truth to that. How does one present this "diplomatically" enough?

I vote you don’t present that at all. You’re almost certainly 4-6 years older than most other candidates and hopefully you’ve learned something in that time, since you spent it in graduate school. I don’t think anyone hiring out there is going to see a PhD in physics on a resume and ask “yea, but is s/he smart?” You have an advantage because you don’t need to convince them of your mathematical abilities, so you can spend your time on the wide range of other critical knowledge and skills that they’ll also want you to have.

Are you easy to work with? Professional in your appearance and actions? Do you know what you’re getting into with the switch? You’re going to be both expensive and borderline useless for 6 – 12 months, and it could be years before they see a return on their investment. Making sure you’re going to stay with them is big on their list. Can you exercise judgment in your communications? Do you have a keen sense of politics?

Many of them may have a bias, for better or worse. Sometimes it will be because they’re uninformed – they’re wondering why you’re giving up 115k a year doing easy work to switch to a new career. I shouldn’t need to tell you that most fresh physics PhD’s aren’t in that position. Sometimes they will be biased because they’re informed – in our entire graduate physics department I don’t think I need two hands to count the people who would actually be good actuaries. If I were hiring, a PhD in physics would get an interview, but I’d be awful skeptical. This is a business job, and most physics PhDs don’t have many skills in that skill set. I had more than most, and it was barely enough to function.

Low level actuarial work is not like any work I’m aware of in physics; advanced actuarial work is also not like any work I’m aware of in physics. Actuaries have to balance the needs of the company they work for (they make decisions that directly impact the financial statement, often negatively) with the regulatory agencies they interact with, all while maintaining the professional conduct required of them by the Actuarial Standards of Practice. Nothing in physics really prepared me for that, and I’m not convinced something between my Masters research and a dissertation was going to fill the gap.

So physics and actuarial work, they’re not the same, or similar, or related, or even remotely like each other. Unless you’ve run your own business (with employees & marketing) or functioned in a large corporation for a few years, you have very few useful skills at the time of hire. Suggesting otherwise will come across badly.

However you do have a lot of potential, maybe more than most. I walked into the interview with an attitude that I was going to start out as the best paper-filing nobody they’d ever hired and would end up being a valuable, skilled member of the team - I really think that attitude helped. It wasn’t that far from the truth, either!

The following is some career advice from a past poster on the Actuarial Outpost that I like a lot (and dig up frequently when talking to career changers). While not all employers would express themselves this way, I think it is actually a useful starting point for those with advanced backgrounds looking for actuarial work.

I rarely hire somebody to do something that I can't do - I can pretty much do everything that my department needs. I've been around, seen enough, my computer skills are still good enough, I am still up on legal issues, and I can run all the calculations you need. If I could get 10 more of me, and pay them a lot less than I make, I would do that. But, I can't, so I am considering hiring you. You don't have special skills, special knowledge, etc. But, if you are willing, you might be able to do some of the work that I need done that I am able to parcel out; this will allow me to focus on the stuff that cannot easily be given away, or which I must do for some reason (client relationship, special knowledge, whatever).

OK, here's the advice: you are of no use to me as an employee if you act like your time is more valuable than mine, because it's not. Your job is to make my life easier by taking away from me whatever you are able to do, it doesn't matter if it takes you longer than it does me. And, if you do this well for a while, you'll make good money at it, and you'll eventually know as much as me, which is a lot.

I hope my input has helped. If you have other questions I’d be happy to try and help.

 

[daveyrocket]

Thanks, that is helpful.

Sometimes they will be biased because they’re informed – in our entire graduate physics department I don’t think I need two hands to count the people who would actually be good actuaries. If I were hiring, a PhD in physics would get an interview, but I’d be awful skeptical. This is a business job, and most physics PhDs don’t have many skills in that skill set. I had more than most, and it was barely enough to function.

Do you have any other suggestions on how to deal with the skepticisms encountered? This is what makes me most upset with myself for actually completing my PhD, is that all it's really done for my career is to add extra hurdles to getting jobs.

 

[Locrian]

I have a long(ish) reply written up. However, the farther I got with it the more uncomfortable it made me. I am qualified to relate my experiences changing careers, and I think they have value since we have at least a little bit in common.

Am I qualified to help you smooth out your interview process? I'm not an interview coach. Do I know what employers are looking for? I've seen several job searches happen where I work, but I didn't do the hiring. I've complained before that people come to this forum and then get a tiny set of opinions based on personal experience that don't represent a good sampling. This thread is currently at n=1.

I love being long winded and enjoy pretending my opinions matter, so I’ll post my reply later. However, in the spirit of honesty I’m first going to direct you to threads where other opinions are given, some of them from people more knowledgeable than me.

http://www.actuarialoutpost.com/actuarial_discussion_forum/showthread.php?t=98052&highlight=career+changer+phd
http://www.actuarialoutpost.com/actuarial_discussion_forum/showthread.php?t=212568&highlight=career+changer+phd
http://www.actuarialoutpost.com/actuarial_discussion_forum/showpost.php?p=896300&postcount=37
http://www.actuarialoutpost.com/actuarial_discussion_forum/showpost.php?p=1361948&postcount=98

The last couple were from Claude’s FAQ thread, which you should read in its entirety when you have time.

http://www.actuarialoutpost.com/actuarial_discussion_forum/showthread.php?t=9931

Also, a mild warning: don’t (if you haven’t already) go to the Careers forum and make a “Hey, I want to be an actuary” thread. The jerks there will laugh and throw tomatoes at you. Jerks like me. We get grouchy because all of those threads sound identical. Maybe wait until you've exhausted all your reading material and then post specific questions if you have some.

 

[daveyrocket]

Haha thanks for the warning. But don't let my low post count fool you -- this is not my first day on internet forums. You should see how those sorts of posts go down on video game development boards.

Thanks for the links. I will read through those this weekend probably. And I like reading opinions or experiences, even if they don't represent a statistical sampling, just as long as people aren't making up statistics in order to make their opinions appear supported. In any case, it adds to the information that is available to me, and I think that is useful even if I decide that the opinions are outliers and should be ignored.