# Strength in Numbers

This review of the short book Strength in Numbers: An In-Depth Look at Actuarial Science for Math Enthusiasts by Chloe Hung summarizes the book and provides thoughts by a credentialed actuary. Learn what actuarial science is, what actuaries do, and why it all matters. Those interested in math or actuarial science will find something interesting in this book.

The book Strength in Numbers: An In-Depth Look at Actuarial Science for Math Enthusiasts by Chloe Hung, lays out the steps from being a math enthusiast to working as an actuary. We give a brief review of the book and thoughts from a credentialed actuary.

In her short book Strength in Numbers: An In-Depth Look at Actuarial Science for Math Enthusiasts, Chloe Hung lays out the steps needed to go from liking math to working as an actuary. She leads the reader through a high level overview of the work that actuaries do. She also details the progression from university student to student actuary to credentialed actuary. Along the way, she includes study tips, interview tips, and enlightening quotes from working actuaries.

The book is written in a chatty, casual style (a sample tidbit: “the public will view you as a very smart kid if you are an actuarial student”). It is a quick and enjoyable afternoon read, even for a seasoned actuary like myself.

## What Is Actuarial Science?

The book starts, as any book about actuaries must, with defining what actuarial science is and what an actuary does. Ms. Hung’s initial definition of actuarial science, “the application of Mathematics to manage risks and solve problems within a company” is a little vague, but as the book progresses she elaborates more, asserting that “we apply our mathematical knowledge to solve problems and make forecasts.”

Strength in Numbers is light on real-world examples of actuarial work. Where examples are given, they are from the insurance industry. This makes sense, as most actuaries work in the insurance industry. However, it would have been interesting for me, an actuary who has only worked in the insurance industry, to see specific examples of actuarial work from a different practice area. She does make the point that all companies need to manage their risks. With the growth of data-driven solutions, more companies are using the types of work that actuaries do. This means the actuarial profession is poised to expand into other areas beyond insurance.

## What Do Actuaries Do?

Actuarial science is all about measuring and mitigating risk. Insurance is the most widely available mechanism for people to manage their financial risk. Therefore, most actuaries work in the insurance industry. Think of any financial risk you face, and you probably have insurance to help deflect that risk. The biggest financial risk most working adults face is loss of income. Consequently, we have life insurance to replace our income if we die and disability insurance to replace our income if we become too disabled to work. Another big financial risk all property owners face is the cost of replacing the property, whether it is a home, a car, or valuable jewelry. Therefore, we have property insurance to provide replacement funds. An increasingly probable risk is outliving your savings, and so we have pensions and annuities to manage that risk by providing a lifetime income stream.

Insurance companies sell all these different types of insurance products, but who decides how much to charge for them? Actuaries. And who calculates how much revenue the company needs set aside to pay future claims? Actuaries. And who helps the company invest that revenue to ensure they can pay out on these policies when the time comes? Actuaries. And finally, who helps the company explain their earnings to their shareholders, thus securing the capital needed to continue in business? That’s right, actuaries, using their specialized knowledge of actuarial science.

Insurance actuaries therefore are instrumental in helping the general public manage financial risk, while at the same time ensuring their employer’s risks are well-diversified and appropriately managed. A fuller discussion of these considerations was probably not necessary in this book directed toward those who are thinking about a career as an actuary, but might have provided some additional food for thought.

## Choosing a Good Actuarial Science Program

I am a career changer who took my first actuarial exam when I was thirty years old. Consequently, I found the chapter on choosing the right university for your actuarial degree both interesting and somewhat nonessential. In my personal experience, the university I chose had nothing to do with my career path as an actuary. On the other hand, who could disagree that the foundation of learning that will occur at university will influence every career choice made from that point. Choosing a good university, no matter your field of study at that point in your life, will be beneficial for your whole life.

Ms. Hung does make the point that you do not need an actuarial science degree to be an actuary. I wholeheartedly agree with her on this point. In fact, I’ve worked with actuaries who had been math majors, electrical engineering majors, and computer science majors, and all became excellent actuaries.

The important thing to know is that, before or while embarking on an actuarial career path, you need to learn how to learn. Ms. Hung makes this point well in the next chapter, on actuarial exams. Though the exam structure in the United States has recently changed, and the structure is different in other countries, Ms. Hung gives advice that is general enough to apply to any path while still being helpful.

## Actuarial Professional Exams

A key component of any profession is formal training and continuing education. For actuaries, this is accomplished through a series of professional exams administered by various actuarial organizations. Accordingly, a portion of the book describes some considerations of actuarial exams.

Potential actuaries may fear the actuarial exam process. Ms. Hung notes that the exams are challenging because of the time and effort required, the mental exhaustion and the lack of immediate gratification. To that list, I would add that students often take the actuarial exams in a vacuum. For example, you may have your first job as an actuarial student for an insurance company, yet you are taking an exam on pensions. Or you are working on valuing pensions, but taking an exam that covers life insurance policy cash flows. It is difficult to learn concepts without seeing the practical application, and yet the exams are important benchmarks along the way to becoming a credentialed actuary. A way to offset this difficulty is to seek out students working in other fields, and find “strength in numbers” by studying together.

Ms. Hung makes one incorrect statement early on in the book. When explaining how to become an actuary, she says “You will only be called an actuary after you become a Fellow.” In the United States at least, those who have obtained Associateship in the Society of Actuaries or Casualty Actuarial Society may become members of the American Academy of Actuaries and, subject to other conditions and continuing education requirements, will be considered credentialed actuaries and are able to perform all the same types of professional services that a Fellow can do.

## Becoming an Actuary

Don’t let the title of the book mislead you. Ms. Hung makes the point well that while being good at math (“strength in numbers”) is an essential quality for an actuary, actuaries quickly move beyond being just number crunchers. After a few years of working in an actuarial field, many actuaries are probably surprised at how little math they actually use. We do use, however, the skills and problem solving techniques we learned while studying math.

Throughout the book, there are quotes from working actuaries from around the world. I found the perspective of actuaries from outside the United States to be especially interesting. The impact of these quotes is offset somewhat by including quotes from “Anonymous”, and in some cases, from the author herself. The first time I noticed a quote from her I was a little taken aback, after all shouldn’t those quotes be from experts? Then I realized, she wrote the book that I am reading, so who am I to say she’s not an expert. Her advice is good and no less valuable than advice from more well-known actuaries.

The author’s website, My Actuarial Resource, offers some free resources to those looking into the actuarial profession. Some of the offerings include a checklist of interview tips, as well as an interactive Actuarial Plan worksheet. This worksheet is designed to help clarify what aspects of actuarial science you are interested in. It also contains some tips on staying motivated through the process of becoming an actuary.

For more information specific to becoming an actuary through the US-based actuarial organizations, check out BeAnActuary, the Society of Actuaries, or the Casualty Actuarial Society. Additionally, if you are intrigued and want to learn more about the history of actuarial science, try What Do Actuaries Do? or The Importance of Actuarial Science as a Profession.

## Strength in Numbers

Overall, this book is a good introduction to actuarial science. I like that it went beyond being a dry, step-by-step guide on how to pass actuarial exams and how to find an actuarial job. It also discussed finding your passion, understanding the role of actuaries in society, and using that passion and clarity to keep you motivated through the years of work required to become a credentialed actuary. Ask any actuary why they became an actuary, and you will hear a variety of answers of course, but a common one is “I liked math but I didn’t want to be a teacher.” Perhaps after reading this book, both future actuaries and practicing actuaries alike will be motivated to a more positive answer to this question.

David Smith (Dave) has a B.S. and M.S. in Mathematics and has enjoyed teaching precalculus, calculus, linear algebra, and number theory at both the junior college and university levels for over 20 years. David is the founder and CEO of Dave4Math.