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Actuary – turning a hobby into a career!

Thomas Adrian Schmidt is Head of Risk Management / Actuarial Services at HDI Global SE. In the interview he describes how the German National Mathematics Competition helped steer him towards the field of insurance mathematics and he talks about the actuarial profession.

As part of its commitment to society, the Group has turned its attention towards the areas of education and training, particularly through the Talanx Foundation. Since 1 January 2017 the Group has also been a principal sponsor of the German National Mathematics Competition. This school competition is aimed at pupils in all grades at German schools, included those located abroad, who have an interest in mathematics. On the occasion of the award ceremony for the National Mathematics Competition held at HDI in Cologne, Thomas Schmidt gave this year's prize-winners a brief on-the-spot glimpse into the world of the actuary.

You work in risk management, a field that is dominated by mathematicians. What was it in fact that drew you to mathematics?
At school I was always pretty good at maths. Back then I already really enjoyed solving puzzles. Taking part in the National Mathematics Competition was surely an early motivational spark behind my choice to study mathematics.

I still like solving puzzles to this very day. In the family, for example, we have fun playing escape games with our two grown-up children and their life partners: you have to solve tricky problems in order to escape from a locked room.

After graduating in mathematics you ended up in the actuarial office. But what do actuaries really do?
Actuaries calculate tariffs, measure reserves and develop mathematical models for enterprise management. In a nutshell, they are the experts in mathematical risk assessment. For this purpose, large quantities of data are fitted to appropriate models in order to draw inferences for future events.

In property and casualty insurance, for example, this means trying to map insured risks as realistically as possible. How great is the risk of the insured event occurring? What costs will the insurer then be faced with? Ultimately, it is on this basis that the costs for the customer are calculated.

That sounds rather complicated. So what are the requirements placed on actuaries?
You certainly have to start by studying mathematics, and you need a good knowledge of stochastics and statistics. The training to be an actuary is basically a kind of postgraduate course. In the space of three years you take a good ten examinations before you can finally be admitted to the German Actuarial Society. In our organisation you do this parallel to your work. Job applicants first join the companies as mathematicians and are then given the opportunity to qualify for the Actuarial Society.

The German Actuarial Society is the professional body representing all actuaries in Germany. How important is networking in this career?
Very important. Through the German Actuarial Society we have built a nationwide community of more than 5,000 actuaries working at various companies. Annual gatherings, local groups and seminars make it possible to develop your own personal network. Even while you are training as an actuary you work very closely with other mathematicians, so right from the outset a large number of professional friendships begin to form.

What career advice would you give to young actuaries?
The most important thing is to be curious, enjoy your work and choose an area that you find challenging.

In order to find an area that is the right fit, we offer students the chance to get to know insurance mathematics through short internships or employment as a working student. We also have links with many local schools in the region and we regularly invite classes to visit so that we can run through simulation techniques with them.

What exactly is the appeal of the actuarial profession?
What is especially nice is that you actually get to keep doing a lot of mathematics yourself.

But it's not just about mathematics, there's also a lot of communication involved. After all, the computational models that are developed ultimately have to be explained to your boss, the Board members or a regulatory body.

The international dimension is another thing that makes working in a global group such as ours really fascinating. We have branches in more than 20 countries, so it's absolutely normal to have foreign trips from time to time or to fly to Australia for a week to work on an analysis.

All in all, the actuarial profession is a great opportunity to keep doing mathematics and at the same time earn good money.

When I look around in the department I see a high proportion of men, why is that?
Looks can be deceiving. At the moment some 30% of the members of the German Actuarial Society are women, but when it comes to actuaries under the age of 30 that figure rises to 55%. So the future is certainly female.

Speaking of the future: Where do you see insurance mathematics in the future?
Actuaries are currently taking a keen interest in Actuarial Data Science. This involves machine learning algorithms used for insurance companies – artificial intelligence on the actuarial side, so to speak. Self-learning algorithms can be used to detect fraud or calculate lapse probabilities, among other things.

Isn't there a risk that artificial intelligence will make actuaries irrelevant in the future?
Artificial intelligence is causing a good deal of upheaval right now. But I can definitely say that we won't become irrelevant. We do not make calculations in the traditional sense ourselves; rather, with the aid of computers we perform calculations so complex that they could not be done on a sheet of paper. For that reason I don't see any real danger in this respect. On the contrary, actuaries currently have very good job prospects.

Last but by no means least, could you please complete the following sentence: thanks to the actuarial professional …
…I was able to turn my hobby into a career.