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The Actuary The magazine of the Institute & Faculty of Actuaries

Here comes summer

The profession’s careers department constantly receives requests from students wishing to secure a work experience placement. With the spiralling debts of today’s students, the motivation for some is purely financial, while for others, relevant work experience within an actuarial environment not only provides a taster for the future, but also becomes a valuable asset as they begin the inevitable recruitment rounds.

The student’s view
I currently work as an actuarial analyst in Norwich Union’s general insurance actuarial department. When I started, it wasn’t as the new guy without a taste of the real world. I had six months’ experience in various areas of general insurance actuarial work and three actuarial projects under my belt. It had all begun when I popped my CV in the post over two years earlier.

Poor beginnings
In December 1998 I decided that a summer holiday in 1999 was beyond my resources. The obvious solution was to make a few pounds. What better way to do it than by getting some experience of what an actuary does?
I mailed my CV to 20 lucky insurers, right across the spectrum. Over the next few months I received a stream of demoralising rejections. Finally, Norwich Union phoned, offering a 12-week placement in the general insurance actuarial department.

Seize the opportunity!
This was my chance to shine, but I wasn’t aware of this fact until I saw the outline of my first project. It involved analysing large claims data by fitting claim frequency and severity distributions to come up with a sensible aggregate claims distribution. This could be used to quantify the probability of a large claim on a particular class of business and was most useful for checking that we were getting a good deal on our reinsurance. Now to those of us with 106 out of the way, this must sound trivial, but to a second-year student with fairly basic statistics, this was the mother of all challenges. I loved it.
I was back for another 12-week dose the following summer, and this time there were two projects waiting for me. One involved updating the household valuation model to be consistent with that in use in the rest of the department. The other, looking at the performance of our mortgage indemnity portfolio, and ranking lenders using sensible criteria.
I must stress that it is two-way traffic. My eagerness to learn and achieve was reciprocated with knowledge sharing and encouragement Had I taken this placement for granted, I would not be where I am now. It has been a very important part of my personal development.

Anything else?
I’m sure you will all agree that, while having a rewarding and stimulating job is great, there’s always room for sport and social. I was part of the furniture in the local gym and played rugby for the company. There was always that fun element to entice me.

Back for good?
All penultimate-year placement students at Norwich Union can apply for permanent jobs in a much shorter version of the standard assessment centre. This was really a chance to return to my final year sitting pretty on a job offer. With adequate notification of the requirements, it was a relaxed preparatory period. My colleagues were eager to offer their individual advice.
One of the biggest benefits of the summer placement is that the company gets to see you in action. By taking on a challenging project, you can be observed under pressure to see how you use your resources to achieve the desired outcome. The work is not all they are interested in. They can also see how you fit into the department from a social and communicative point of view. This removes the need for the full assessment centre, with obvious cost savings for the employer.
I got the job and, back in university, I avoided all the stress of labouring over inconveniently long application forms during my last year.

My advice
All you students get off your behinds and apply for a placement. Be prepared for a challenge. Even if a placement does not yield a job, it will leave you in better stead than before. All you employers without a placement programme, you’re missing out on applicants like me.

The employer’s view
Ask the question, ‘Why not employ a summertime vacation university student or a student with a gap year?’ and the answer often is, ‘It’s not our policy’. Push a bit harder and companies will tell you it is because they are expensive to train and they go as soon as they become vaguely useful. But companies shouldn’t be trying to train these students to become actuaries, rather instructing them in actuarial techniques and procedures. Instruction is far quicker and cheaper than training, and provides a useful pair of hands much sooner. Such students don’t expect a career path and are more flexible about what they expect to get from their day-to-day work. Their work has to be relevant and constructive, and for that to happen a company has to plan. The use of junior actuarial students (overseen by a recently qualified actuary) allows them to develop their planning and managerial skills.

Into management mode
The benefits to the company of participating in work experience schemes are that junior staff get into management mode sooner, and the company can have a better recruitment experience because it is trying out potential future members of staff. Instead of relying on an interview, the employer can see what students are like, and how they perform in an office environment.
The work is generally computer-based: organising files, creating library charts, redesigning spreadsheets the sort of work that has been shelved because everyone is too busy to do it.
However, it also enables students to see whether they are suited to working in the office environment. If they decide at that stage that they do not like it, you have not wasted resources on recruiting them through the usual channels.
If you discover someone really good that you would like to come and work for you after university, then stay in touch with them and offer them a job.