Actuary? What in the heck is that? “That’s where they bury all the dead actors,” I usually tell people. That’s my job. Most people have never heard of my profession, but that’s okay. I do math for a living for a big insurance company. I figure out what prices the company should charge for its products based on experience. I do forecasting and reserving as well as value liabilities; I take real data and turn it into outputs that help make actionable business decisions.
Actually Look At Your Data
Logically everything looked perfect, I thought as I finished my work. Unfortunately I was generating earnings of negative infinity when I put it into my model. It was using a huge data table, but as soon as I opened it and held down the page down key I noticed that half of the entries were zero. Math may exists in some kind of logically perfect world in the human mind but in reality data sources have error and can be put together with errors, I learned that it’s always better to eyeball your data closely before continuing your work.
Ok, so there’s nothing weird in your data and you’re getting some good results, the next mistake you can make is assuming that you’re getting the right answer. I went through a great deal of trouble to calculate and account value change for a large block of annuities once. I had good data and good logic. The only problem was that when I presented it to the management they didn’t believe it, it did not match a separate account value change in another report. I was not aware of the second report but luckily I was able to explain why the two numbers were different. After such a close call I learned to check your numbers against any other numbers that are available and be sure you understand any differences that may arise.
Look At Your Results In Stages
“Good enough for government work,” I thought to myself as I published a particular set of results. I had just taken last quarter’s numbers, made a few different changes in assumptions, and ran a projection for this quarter. I also validated the final result to another unit’s data and came extremely close. I found out later to my chagrin that assumption change #1 caused me to be 50% higher and assumption change #2 caused me to be 50% lower, so overall they cancelled out. All the executives wanted to see it just with change #1. It’s good to feel right overall but it’s better to consider your results one change at a time.
Be Prepared to Experience “The Creative Process”
You will get a healthy taste of the creative process in this field. By “the creative process” I mean failure. When working with numbers you will wake up some days and think you know it all, then something will happen that causes you to reconsider your whole approach. You should expect many technical and work product difficulties. Some units and people you need will be more helpful than others. Your computer will probably crash at the wrong time. You will reach dead ends possibly for days or weeks until you have a breakthrough. To be creative and want to succeed you must be prepared to accept failure temporarily.
You’re Never Ready
There’s no limit to the amount of work you can do when working on a financial project. Odd are that you’re never really going to be ready you just run out of time. Staying late? Great idea. Staying until midnight to go to meetings and stare at your computer until you want to pass out? Probably not a great idea. At some point you can easily reach burnout and I’ve learned that it’s a good idea to plan your time as much as possible and to avoid working when you’re in a counterproductive state.