Stewart Gleason is a consulting actuary with the Actuarial Services group of Ernst & Young, working out of their Chicago office located in the Sears Tower. He is one of twelve property/casualty actuaries in the office, which also includes eight life actuaries and one health actuary. Actuarial Services is organized nationally with offices in Seattle, Los Angeles, Denver, Kansas City, Chicago, Atlanta, Washington, D.C., Philadelphia, New York and Boston. They also participate in projects through E&Y International, particularly in Canada and Great Britain. Stewart has been with E&Y three and a half years.
"The traditional role of the property/casualty (P&C) actuary is to determine sound pricing for insurance products and the appropriate level of reserves for unpaid claims," says Stewart. "In particular, P&C insurance companies are required to obtain an opinion, provided by a credentialed actuary, on the adequacy of these reserves. In the audit of a P&C company, the reasonableness of reserves is also a key issue. As consulting actuaries, we are often involved in projects well outside of these traditional roles, for example in mergers and acquisitions, strategic consulting and software development."
The group's primary mission is to respond to the needs of their clients in a constantly changing business environment. This includes evaluating the processes by which products are priced and finding ways to improve them, assisting in the design of financial management tools and assessing the impact of environmental changes such as tort reforms and litigation.
"The focus of my work has been reinsurance and medical malpractice," he says. "While the statistical problems in these lines tend to be more delicate, addressing clients' needs in the related areas of systems, claims processing and underwriting is a frequent occurrence."
"We are currently assisting a client in building a model which will be used to price medical malpractice business for doctor groups. This detailed simulation model will allow the client to break away from traditional policies for individual doctors and to customize the product for the large practices that are more and more the norm as managed care becomes prevalent."
Stewart has a B.S. in mathematics, from Rutgers University and a M.S. and a Ph.D. in mathematics, working in harmonic analysis, from New York University, Courant Institute. Prior to joining E&Y as a Senior Actuarial Assistant, he worked at Prudential Reinsurance in Newark, N.J. and in the reinsurance pricing group at CNA Insurance Companies in Chicago. "I learned about the position at E&Y through a professional recruiter," he says. "Many positions for experienced actuaries are filled this way."
His primary motivation for looking for a job in finance was the dismal state of the job market in academe and non-financial industries. "I wasn't looking to get rich but the prospect of chronic under-employment was, to say the least, discouraging," he says. "I knew other people in the New York area who had become reinsurance actuaries and was encouraged by the positive responses to my inquiries about employment."
"From the first I have grown away from exclusively technical work and have become more involved in macroscopic business problems and their solution," he adds. "Learning and understanding the non-technical aspects of insurance and alternative risk management schemes and solving business problems that are crucial today has been most rewarding."
For his work, he finds calculus and probability and statistics to be essential, while at the graduate level, measure theory, complex analysis, probability limit theorems and statistics are excellent reinforcement. "I have found my knowledge of Fourier analysis to be invaluable as well," he notes. "A solid undergraduate course in partial differential equations would provide this."
Typically, actuaries have a bachelors degree in mathematics, statistics or actuarial science, but many have backgrounds in engineering, physics, computer science, economics and finance. Higher degrees, including MBAs, are becoming more common. This is always supplemented with further study for examinations administered by the Casualty Actuarial Society and the Society of Actuaries.
"Knowing a little bit about all of these subjects is very valuable," says Stewart, "and some of the basics can be learned through the society examinations and on the job. I would recommend taking as much math and statistics as possible in school - one is much less likely to pick up the mathematical tools while working."
