French to English: Actuarial Science, Part 3

Since actuaries spend their days performing mathematical and statistical calculations, I wondered if they had a set formula or equation for calculating a person's life span.  I poked around the World Wide Web and found two sites that might interest you.  I didn't find the magic formula, but there were two sites that provided a good idea of how life expectancy is calculated.  The real calculation, I would think, would apply on a case-to-case basis where several factors will have to be considered.  But these two sites should shed some light.  Plus, it's a good way to entertain yourself.

The first one is a fun game consisting of about a dozen questions.  It is called the Longevity Game which the Northwestern Mutual Life Insurance invented. Each question you answer results in the age tabulator spewing out a number on the right side.  This number (your age expectancy) changes depending on your answer.

I took the test and the age tabulator spit it out without mercy.  Looks like I'm going to live till age 94, barring any unforeseen you know what.  I'll need to buy a larger piggy bank then.  At 94, how much brain and leg power will I have left?  Sure, I'd love to live till 94, but make that a productive and pleasant 94.

The second life span calculation site is not as light-hearted as the first.  It takes actuarial considerations for determining a person's lifetime.  It was created by the Foundation for Infinite Survival Inc of Berkeley's Life Extension and Control of Ageing Program.  This calculation takes 10 pages in total.  If you really want to take a more serious look into how long you'll live, print the pages and do the calculations manually.   If you don't want to do the entire 10-page calculation, David Garrison did an automated calculation - click on the words "automated calculation" in red.

To take the Longevity Game, click here:

http://www.nmfn.com/tn/learnctr--lifeevents--longevity

To take the 10-page calculation (it's not as intimidating as you think because it's laid out logically and clearly), click here: 

http://www.fis.org/public/obiterdicta/lecalc.html

Calculating your life span is not rocket science.  The usual questions apply:  your present age, your lifestyle (how much you drink and smoke, whether or not you have dangerous or risky hobbies, how often you exercise), and there are questions about your forefathers and their medical history.  Specific health questions relate to family members dying from cancer, high blood pressure, cardiovascular disease and diabetes.

Just for fun, take the Longevity Game by Northwestern Mutual or the one by the Foundation for Infinite Survival Inc.  When you know - more or less - your age expectancy, it will help you decide how large a piggy bank you need to buy.  Or you might be persuaded to set up  appointments with a life insurer and financial planner.  And if you have friends who are actuaries, have them over for dinner.

Here is your third set of French to English terms for Actuarial Science:

 

FRENCH	ENGLISH
frais d'acquisition reputés afférents aux polices	deferred policy acquisition expenses
régime (de retraite) à participation (différée) aux bénéfices	deferred profit sharing plan
degré d'invalidité (ou de l'incapacité)	degree of disablement
pénalité de retard	delay penalty
acquisition en bloc	delayed full vesting
coéfficient d'ajournement	delayed retirement factor
hypothèses démographiques	demographic assumptions
passif-dépôts	deposit liabilities
fraction amortie du coût	depreciable cost
rente de veuf invalide	disabled widower's pension
matrice des covariances	dispersion (covariance) matrix
garantie épuisée	exhausted limit

French to English: Actuarial Science, Part 2

There are at least three professional associations that represent the actuarial science profession in North America:

• Canadian Institute of Actuaries
• Society of Actuaries
• Casualty Actuarial Society

The Canadian Institute of Actuaries (CIA) has a 16-member Secretariat based in Ottawa and looks after communications and publications including overseeing volunteers, managing the web site and carrying out translation.   Since they are the national organization for professional actuaries, people who are thinking of studying in this discipline will want to keep the CIA as a point of reference.  The organization is large:  a Board of Directors with 16 actuaries on staff, three councils that look after the association's main functions, 40 committees and 15 task forces! 

On their web site's FAQ section, one of the questions addressed is what it takes to become an actuary.  First, you have to love mathematics, plain and simple, and have a knack for it.  This is the first requirement that is mentioned.  Second, you need the patience for doing detailed calculations and spending  hours in probabilities and statistics. 

The CIA adds, "the study of life contingencies, which deals with the probability of survival, is an essential part of actuarial education."  While these requirements are technical, actuaries should also be capable of developing skills that go beyond technical expertise.  A background in economics, finance and business, as well as the ability to communicate well are important, particularly for those who want to transition into consultancy or advisory roles.  All that technical knowledge must be communicated to laymen in clear, easy-to-understand concepts.  If an actuary can do this with ease, that is a huge plus.

The CIA does not conduct exams or administer certification procedures.  This is done by the Society of Actuaries (SOA), which is based in Schaumburg, Illinois.  It supposedly is the largest professional organization of actuaries in the world, serving 20,000 members, 30,000 candidates and the general public.  They conduct exams and confer three designations - ASA, CERA and FSA - which the Canadian Institute of Actuaries recognizes.  The CIA, however, will require that a candidate has the FCIA certification in order to practice.  For more information about the SOA, click here: http://www.soa.org/about/landing.aspx.

The CAS - Casualty Actuarial Society - is based in Arlington, Virginia.  They have a narrower focus:  to promote the study of actuarial science as applied to property, casualty and similar risk exposures.  Actuaries seeking to specialize in property and casualty risk management will need to take the exam administered by the CAS.  To prepare for this exam, the CAS provides a  syllabus of examination.  Exam applicants can join e-mail study groups (of which there are 9 exam study groups).  There is a Canadian study group (exam study group # 7.  To join any of these groups, go to  http://www.casact.org/admissions/index.cfm?fa=studygroups.

FRENCH	ENGLISH
prestations déterminées	defined benefits
assurance-vie populaire	debit life insurance
déclaration de désistement	declaration of renunciation
contestation de la validité du contrat	declaration that the policy is forfeited
rente décroissante	declining annuity
rachat de la franchise	deductible buy-back
perte déductible	deductible loss
vétusté déductible	deduction for ageing
ajournement de l'option entre les prestations	deferment of choice of benefit
période du différé	deferral period
assurance différée	deferred assurance
assurance à participation différée	deferred dividend insurance

French to English: Actuarial Science, Part 1

Have you ever wondered how insurance and finance companies determine premiums, rates, risks and other factors that make you shell out more in premium payments each year?

I am intrigued by these tables that spew out statistics on how age determines the premiums to be paid on say, a life insurance plan, taking into account the standard questions of "do you smoke" "what prescription drugs are you taking" or "any dangerous hobbies?"

When agents sell you insurance and are satisfied that you answered their questions honestly, they fish out a table that looks longer than your arm, and then voila - they've got the amount you have to pay each month!

Actuarial Science is a field of study that would fascinate someone who enjoys number-crunching.  It combines the disciplines of mathematics and statistics to evaluate risks in the insurance and finance business.

A report I read in the Wall Street Journal years ago said that if you were an actuary (a person who is trained in  actuarial science and practices it) and live in the US, you have the second best job in the country.  I wonder if that's still true today.  That observation must apply to Canada as well.

Actuarial Science can be studied in both the undergraduate and graduate level.  Graduates should not have problems finding jobs in this field.  The University of Waterloo (Ontario) enjoys the reputation of being the best actuarial school in North America and "even the world;"  at least this is what the University of Waterloo itself is saying, but it is a credible statement.  I mean, how many actuaries do you know?  You're bound to meet lawyers, accountants and doctors every week, but actuaries? 

As an actuarial science graduate, what kind of career can you get into?  If you're looking for a job in insurance and pension management companies, you can work as an actuarial analyst, a personal lines analyst, an operations actuarial associate or as a consultant.

Students studying actuarial science are strongly encouraged to include computer science courses in their academic program.  Those with above average statistical and numerical analysis abilities as well as communication skills usually land in top-paying actuarial jobs or are fast-tracked to promotion.

When I was at McGill University completing my Certificate in Translation, I got into the habit of scavenging for technical lexicons and databases in both French and English.  These lexicons are like diamonds in the rough to a translator.  When I stumbled upon a lexicon  of actuarial science terms, I was ecstatic...it's a valuable lexicon that will stay in my safety vault for a long, long time!

I'll share 36 terms with you in my next 3 blogs.  Here's the first 12:

FRENCH	ENGLISH
rapport sinistres/primes théorique	calculated loss ratio
fixation des prestations/calcul des prestations	calculation of benefits
Régime de pensions du Canada	Canada Pension Plan
résiler, ristourner	cancel a policy
police annulable	cancellable policy
risque de capacité	capacity risk
assurance de remboursement de capital	capital redemption insurance
report des primes d'assurance	carry-over of insurance rates
directeur du service des assurances accidents	casualty manager
courtier diplômé	chartered underwriter
indemnité journalière	daily compensation
date de constitution su sinistre	date of ascertainment of loss

For my next blog, what does it take to become an actuary and what associations can represent me as a professional actuary?