OSU Presentation Central Mutual Insurance
Christina Germann
Rick van den Hengel
Agenda Introduction to Central Actuarial career choices The exam process Getting a job What do actuaries do? Q&A Extra Info
Introduction to Central
Actuarial Career Choices Consulting vs Insurance Government Institutes Banks Environmental Organizations Social Security Hedge Funds Sports teams Disney World
Exam Preparation Recommended study time - 100 hours per hour of exam Exam process usually takes at least 5 years to complete (2 exams per year) Tips: Take a few months to study Make a schedule, and stick to it Leave the last month just for practice exams Use Coaching Actuaries (ADAPT) SOA vs CAS
The Exam Process Source: www.casact.org/admissions/process
Central’s Study Plan 30 hours of work time per hour of exam No work on the day before or day of exam Exam Registration and Materials Seminars Flexible Work Schedules
Getting a Job Increasing your chances: Internships Pass exams Extra skills Research the company Clean up your resume Don’t be afraid to take the first step
Quiz: Name a movie that references Actuaries Tron Along came Polly Saw VI
What do actuaries do? Example #1: 100 auto policies Total developed losses = $50,000 Expected Rate? $50,000 ൗ $500 = 100
What do actuaries do? Example #2: 50 cars 50 pick-up trucks $20,000 of losses for cars $30,000 of losses for pick-up trucks What is the expected rate? $50,000 ൗ $500 = 100 $20,000 ൗ Cars = $400 = 50 $30,000 ൗ Pick-up trucks = $600 = 50
Age • The crash rate for 16-year- olds is 3.7 times higher than drivers of all ages. • The crash rate for 16 to 19- year-olds is 2.7 times higher than drivers of all ages
Premium Factors Base Rate Based on the location Primary rating factors Age Gender Marital status Vehicle Secondary rating factors Driver history Number of cars insured Other rating factors Deductibles Limits Discounts
Final Premium Base Rate X Primary Factors X Secondary Factors
Base Rates Toledo $200 Cleveland $300 Van Wert $100 Columbus $300 Cincinnati $250
Primary and Secondary Factors Territory Base Rate Description Age Factor Car Type Factor Van Wert 100 Female, Single, Occasional 17 or less 2.50 '93 Dodge Intrepid 0.90 '16 Lamborghini Cleveland 300 Male, Single, Occasional 17 or less 3.10 5.20 Cincinnati 250 Married, Principal 25 - 64 1.00 ‘16 Toyota Prius 1.15 Columbus 300 Male, Married, Principal 65 - 70 1.75 Toledo 200 Female, Married, Principal 65 - 70 1.75 Number of Number of Cars Drivers Factor Description Age Factor 1 1 1.00 At Fault < 1 year 3.00 1 2+ 1.05 At Fault 1-2 years 2.50 2 1 0.90 Distracted Driving < 1 year 1.85 2 2+ 0.95 Distracted Driving 1-2 years 1.50 3+ 1 0.80 Reckless Driving < 1 year 4.00 3+ 2+ 0.85 Reckless Driving 1-2 years 3.25
Donald Trump Married, 70-years old, principal operator Lives in Cleveland 25 vehicles in the household with 2 drivers Primary car is a 2016 Prius Received ticket for reckless driving six months ago
Hillary Clinton Married, 68-years old, principal operator Lives in Toledo 10 vehicles in the household with 2 drivers Primary car is a 2016 Lamborghini Received ticket for distracted driving 2 years ago
Determine the premium for Trump A: 300 x 1.75 x 1.15 x 0.85 x 4.00 = $2,052.75 Territory Base Rate Car Type Factor Description Age Factor Van Wert 100 '93 Dodge Intrepid 0.90 Female, Single, Occasional 17 or less 2.50 '16 Lamborghini Cleveland 300 5.20 Male, Single, Occasional 17 or less 3.10 Cincinnati 250 ‘16 Toyota Prius 1.15 Married, Principal 25 - 64 1.00 Columbus 300 Male, Married, Principal 65 - 70 1.75 Toledo 200 Female, Married, Principal 65 - 70 1.75 Number of Number of Cars Drivers Factor Description Age Factor 1 1 1.10 At Fault < 1 year 3.00 1 2+ 1.05 At Fault 1-2 years 2.50 2 1 1.00 Distracted Driving < 1 year 1.85 2 2+ 0.95 Distracted Driving 1-2 years 1.50 3+ 1 0.90 Reckless Driving < 1 year 4.00 3+ 2+ 0.85 Reckless Driving 1-2 years 3.25
Determine the premium for Clinton A: 200 x 1.75 x 5.20 x 0.85 x 1.50 = $2,320.50 Territory Base Rate Description Age Factor Car Type Factor Van Wert 100 Female, Single, Occasional 17 or less 2.50 '93 Dodge Intrepid 0.90 '16 Lamborghini Cleveland 300 Male, Single, Occasional 17 or less 3.10 5.20 Cincinnati 250 Married, Principal 25 - 64 1.00 ‘16 Toyota Prius 1.15 Columbus 300 Male, Married, Principal 65 - 70 1.75 Toledo 200 Female, Married, Principal 65 - 70 1.75 Number of Number of Cars Drivers Factor Description Age Factor 1 1 1.10 At Fault < 1 year 3.00 1 2+ 1.05 At Fault 1-2 years 2.50 2 1 1.00 Distracted Driving < 1 year 1.85 2 2+ 0.95 Distracted Driving 1-2 years 1.50 3+ 1 0.90 Reckless Driving < 1 year 4.00 3+ 2+ 0.85 Reckless Driving 1-2 years 3.25
What do actuaries do? Females Males
What do actuaries do? Revise the rating factor for single females: $200M in premium Breakeven loss ratio: 65% Expected losses = $200M * 65% = $130M Actual losses = $100M $100M / $130M = 77% New factor = 77% * 2.50 = 1.92
Any Questions?
Extra Info Hiring forecast 1 full time in Personal Lines 1 full time in Commercial Lines Contact information cgermann@central-insurance.com rvandenhengel@central-insurance.com
Home Insurance Similar process: Base rates Rating factors A large variety of events can occur Hail storms Wind storms (tornado/hurricane) Winter weather Theft Fire Many more
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