Andrew Ribaudo is an actuary with the American Equity Insurance Company in Scottsdale, Arizona, where, currently, he is the only member of the Actuarial Department. "My role," explains Andy, "is to determine the adequate premium rates to charge for our products, establish appropriate reserves for claims that have not yet been reported to us and to analyze the structure of our reinsurance programs. Most of my work is performed independently, then I meet with the senior management, such as the Senior VPs of Finance, Underwriting, Marketing and Claims, to decide on our course of action."

His interest in actuarial work came about as a result of his being good at mathematics, but also having an interest in the "business world". "Insurance is not as stuffy and boring as many people assume," he continues. "For instance a previous employer wrote policies that covered the price of the Cadillac participants win for getting a hole-in-one in a golf tournament."

To do his job, Andy draws on his knowledge in a broad range of areas, including mathematics, finance, economics, accounting, and law. "Some legal background is needed to interpret insurance policy provisions," he explains. "In most cases mathematics is the tool, but I must also understand things such as Federal Income Tax law as it affects insurance companies and what the insurance premium is suppose to cover. For someone in property insurance, it is helpful to have a basic understanding of geography and how it relates to natural disasters, such as earthquakes, floods, hurricanes and hailstorms."

He describes a recent problem he worked on: "In analyzing loss reserves for year end, it is necessary to extrapolate on prior year's development patterns. Essentially, we are required to establish as a liability the ultimate amount we will eventually pay for all covered claims that have already occurred. The key difficulties are 1) you don't know about all the claims yet and 2) even if you do know about the claim, you can't always know exactly how much it will cost to settle it. My role is to analyze patterns of this development over time to establish our liability. Math plays a major role as you look at things like the average development factor, the standard deviation of the factor, etc. Again, math is the tool used to analyze the business applications."

Andy has a B.A. with a major in mathematics and actuarial science from the University of Connecticut. He found his first job through his college actuarial science professor. Since then, he has followed job leads through advertisements in actuarial society publications. He is an Associate of the Society of Actuaries (ASA), a Fellow of the Casualty Actuarial Society (ACAS), and a Member of the American Academy of Actuaries (MAAA).

One way to get started in the actuarial business is through internships while in college. "This allows you to get exposure to the company and the company to get exposure to you," he explains. "Most actuarial professors are good sources for information about internships"

    Return to Archived Profiles and Forums