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AbhiJ
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Joined: August 5th, 2008, 11:29 am

Actuary vs quant

August 30th, 2008, 3:17 pm

QuoteOriginally posted by: tibbarHaving gone through all the actuarial exams myself, I'd say that if I could turn back the clock I'd probably not have bothered (I'm currently doing a part-time finance PhD!). The exams are not exciting and you lose your social life for the best part of your 20's...That said, I work in an actuarial firm as an in-house "quant" and do the tricky maths / investment related work that more business focused actuaries find difficult. I think that both careers have their pros and cons, most actuaries get reasonable salaries (£100-200K) and can work a 40 hour week, enjoying a relaxed lifestyle.The other thing I've noticed is that as a technical actuary you can do all the interesting maths without spending most of the day coding c++. Coding seems to be impossible to escape as a quant and while it's fun for a while, do you really want to spend 70% of your time doing this? Actuaries will normally develop the models and then give a technical spec to pure coders to implement - I guess it's a matter of taste.I don't understand why there is so much hostility from quants to the actuarial profession - they are completely different career paths, both with advantages and drawbacks. It's also worth noting that a number of top IB's are now employing actuaries to setup reinsurance operations and insurance linked securities trading desks (also liability driven investment products for pension funds, life insurance securitisation etc). These are all growth areas which quants are not well equipped to work in, as quants are not trained in the classical areas of actuarial science. Equally, actuaries have limited training in quantative finance (recently qualified investment actuaries will know the material of Hull, Baxter & Rennie, but won't be able to price exotics or code finite difference pricing algorithms etc). But why would you expect them to? That's not their job - an investment actuary specialises in fund management and developing investment strategies to match insurance liabilities etc...Totally agree.Quants are proud of their mathematical & computational muscle.Thats perfectly OK.But viewing others profession with disdain is not a matured response IMO.What if some Traders come and say that quants are nothing but their support.What if a Banker makes fun of quants saying "You guys are computer monkeys".It appears that everybody in the world believes his profession is better than others.While its true that quants require greater analytical ability in an academic sense, than an actury.But some actuaries can be more successful than average quants and work far less hours and enjoying more job security. So it depends on a person as to what suits his personality.
Last edited by AbhiJ on August 29th, 2008, 10:00 pm, edited 1 time in total.
 
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scmjsd
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Joined: August 6th, 2008, 11:45 am

Actuary vs quant

September 12th, 2008, 10:10 am

Hi,I just wanted to add my experience and thoughts on the actuary vs quant thread here. i've worked for two london city insurers/reinsurers during the course of the last 2 years. i currently work as a business analyst in IT and have just enrolled on a MFE. i did consider becoming an actuary (BEng background so maths should be ok) but was put off by how old fashioned and dated it seemed. in the insurance industry i have got the impression and had confirmed by colleagues that actuaries simply do not want to know about using technology. they sit in their artificially inflated positions with no greater IT skills other than MS Excel and some rudimentary understanding of databases. i don’t' think its possible now to manage risks without technology whether you use c++, mathlab or bespoke applications.i have been, quite frankly, shocked to learn that these guys are responsible for managing the risks, in my case large, specialist insurance companies. i get the impression they are scared of technology.when i looked up the british actuary website the feeling of dated old attitudes was clear. i would not be surprised if the mathematics contained therein is also dated.one last point. a friend of mine with no post 16 education and zero maths has just been appointed head of risk modelling for a large reinsurance company. how does that work? his boss is an actuary and she is global head of risk. i really think there is opportunity for quants with IT, finance and maths to update the insurance industry - at least in the UK anyway. Then again city insurance is very reserved and stuffy so whether this will ever happen I don’t know.As far as remuneration is concerned, I came to the conclusion that the pay is about equivalent to my current occupation. Head of department might get 150k+ with bonuses. From what I understand about quants, the remuneration is effectively without limits!
 
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jomni
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Joined: January 26th, 2005, 11:36 pm

Actuary vs quant

September 15th, 2008, 1:13 am

QuoteOriginally posted by: scmjsd i get the impression they are scared of technology.Are they? Almost all major insurance companies use an actuarial software from my previous company.
Last edited by jomni on September 14th, 2008, 10:00 pm, edited 1 time in total.
 
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TraderJoe
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Joined: February 1st, 2005, 11:21 pm

Actuary vs quant

September 15th, 2008, 8:10 am

QuoteOriginally posted by: scmjsdHi,I just wanted to add my experience and thoughts on the actuary vs quant thread here. i've worked for two london city insurers/reinsurers during the course of the last 2 years. i currently work as a business analyst in IT and have just enrolled on a MFE.Given the current market meltdown, do you consider this to be a wise investment of your time and money - one year and $40,000 ?QuoteAs far as remuneration is concerned, I came to the conclusion that the pay is about equivalent to my current occupation. Head of department might get 150k+ with bonuses. From what I understand about quants, the remuneration is effectively without limits!This is exactly the type of thinking that caused the financial markets bubble (from 5% to 25% composition of S&P500 in twenty years no less!) and the subsequent crash unfolding before our eyes. Sad.
 
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scmjsd
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Joined: August 6th, 2008, 11:45 am

Actuary vs quant

September 15th, 2008, 12:51 pm

QuoteOriginally posted by: TraderJoeQuoteOriginally posted by: scmjsdHi,I just wanted to add my experience and thoughts on the actuary vs quant thread here. i've worked for two london city insurers/reinsurers during the course of the last 2 years. i currently work as a business analyst in IT and have just enrolled on a MFE.Given the current market meltdown, do you consider this to be a wise investment of your time and money - one year and $40,000 ?QuoteAs far as remuneration is concerned, I came to the conclusion that the pay is about equivalent to my current occupation. Head of department might get 150k+ with bonuses. From what I understand about quants, the remuneration is effectively without limits!This is exactly the type of thinking that caused the financial markets bubble (from 5% to 25% composition of S&P500 in twenty years no less!) and the subsequent crash unfolding before our eyes. Sad.Answers:1. 2yrs before i finish the MFE, hopefully things would have improved by then somewhat. i am rather fascinated by financial engineering since my background is engineering and computing, and business analysis. its costing less than $40k spread over 2 yrs. and look, i don't regard global capitalism as a utopia but i'm stuck in it, and this represents a way in order for me to do well in it. 2. whilst i'm no expert, i understand this crash is related to rediculous sub-prime mortgages in the US and colleagues who bought this junk debt. if anything we will need more and better risk management. capitalism encourages greed so don't attack me for its pursuit. at least its not my only reason for wanting to be a quant unlike a number of others i suspect.
 
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scmjsd
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Joined: August 6th, 2008, 11:45 am

Actuary vs quant

September 15th, 2008, 12:55 pm

QuoteOriginally posted by: jomniQuoteOriginally posted by: scmjsd i get the impression they are scared of technology.Are they? Almost all major insurance companies use an actuarial software from my previous company.mmm, let me qualify that a bit. they are scared of in-house IT and have next to no knowledge themselves about technology other than at the user end....the equivalent of a quant buying off the shelf products without knowing how the models are put together. instead quants build the models themselves and deliver technology! unless i'm mistaken?
 
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NotAQuantYet
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Joined: March 27th, 2007, 6:52 pm

Actuary vs quant

September 17th, 2008, 1:34 am

I'm in the US, not the UK, and I -do- see this. Some of the senior actuaries at my firm are only passable at Excel, and do most of their checks on paper.But the majority of pensions and insurance is complying with regulations, and there's a LOT of 'judgment' involved, which, apparently, has been doing better than finance.
 
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scmjsd
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Joined: August 6th, 2008, 11:45 am

Actuary vs quant

September 17th, 2008, 2:06 pm

what about AIG? also my former employer, another city insurer was taken over due to incompetent reinsurance and reserving -the top acturary fired! i think the difference is in scale, insurance is small compared to financial markets. the whole of city insurance is roughly equal to 2 investment banks.
 
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ntruwant
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Joined: August 3rd, 2004, 9:50 am

Actuary vs quant

September 21st, 2008, 11:53 am

I totally disagree: in my company the ALM uses advanced software pakages (Prophet, Barry&Hibbert, QRM, Remetrica) for specific areas and there are also actuaries who create C++ engines that are used to price the exotic options.The image that even big insurance companies only use Excel is not up to date!
 
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project65
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Joined: August 28th, 2008, 8:41 pm

Actuary vs quant

September 26th, 2008, 12:22 pm

Nice little article in this month's "The Actuary" by Paul Wilmott ( see here).
 
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sheepski
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Joined: March 25th, 2008, 1:21 am

Actuary vs quant

September 27th, 2008, 10:52 am

Revised link to the article mentioned - www.the-actuary.org.uk/815707 Actuaries versus QuantsMy background1. Am a qualified actuary. Been doing monte carlo modelling for an insurance company for a number of years. Seen a lot of actuaries applying basic quant concepts in their work. eg valuation of options in insurance contracts, VAR to set capital requirements.2. Spent a bit of time reading quant articles on the job but was frustrated at not fully understanding the principles behind them.3. Am currently taking on an MSc to brush up on quant skills, and eventually to be able to build a sensible model and be able to explain the results coming out of them.From an actuary’s perspective, I can put together a fairly strong case on why actuaries should become more quant-y. As to whether quants should be more actuarial..1. the banks could probably do with some of the longer term thinking and prudent approach that actuaries seem to be good at..2. but not convinced that they are any better at being transparent or pragmatic or not overly complicating things..Having said that, actuaries been dealing with the joys of regulations for a long time, maybe there is a place for them in the new world.
 
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AmbitiousRusski
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Joined: September 21st, 2008, 3:11 am

Actuary vs quant

December 12th, 2008, 12:54 am

From an internship experience:Want to do math/modeling/money-slinging/play the biggest games?Don't be an actuary.From my internship perspective, the work was just so incredibly boring (whenever I got any...75% of the time I was told to "go study") that I counted down the days until I got out of there.Which is why I'm planning to go into finance, work for a year or two, then go and get my MFE. Sorry, but I want to actually *enjoy* my work. Oh, and more money than I ever knew what to do with would be nice too =)