Spotlighting Trends

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ARE SALARY SURVEYS INFLATED? he short answer is...we’re not sure. Salary surveys for many professions can be found on the internet with a quick keyword search. It appears that the goals of these surveys are to entice job seekers to utilize the company’s or website’s services. While we can’t accurately speak to the salaries of other professions, we can address the highly specialized Actuarial profession and its salaries. And, more specifically, we can provide insight into how the DW Simpson Salary Survey is constructed, and how inflation is not a factor.

The data DW Simpson uses for our salary survey comes from actual placements - in other words, this is real-time data reflecting both the current compensation levels and new offers extended to every candidate with whom we are working and/or with whom we periodically are touching base. While we are confident our salary survey is an accurate representation of current

compensation within the Actuarial field, it is important to note a few things. First of all, our survey represents 80%

of Actuaries’ compensation, with the top and bottom 10% of cells being excluded from the spectrum. The reason for this is because there is a high level of variance in the top and bottom 10th percentiles, which would make the salary ranges too broad. Total compensation packages in the top and bottom 10% cells can vary greatly.

According to KC Cho, 1st Vice President and Partner of DW Simpson, “When we first put out the salary survey more than a dozen years ago, the first few calls I got were from Actuaries who were on the lower end of the ranges. But after a few conversations with Actuaries, who told me that they were well above our ranges and don’t even bother referring to our survey anymore, I realized we must be doing it right.”

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Volume 2, Issue 2 – Second Quarter 2012

Hot Job s !

RETAINED: Chief Actuary, Southeast, USA: Topinsurance provider seeks FSA or FCAS with managementexperience in business / product development for LatinAmerican Business. International travel required. (#34598)

RETAINED: Life Actuary, West, USA: Life insurancecompany seeks FSA with 10+ years of product pricing experiencefor Life and Health lines of business. Strong background inValuation and Reserving required. Exceptional oral / writtencommunication skills and strong interpersonal skills arenecessary for this role. (#34207)

RETAINED: Pricing Actuary, Canada: Top P&Cinsurance company seeks Actuary with strong pricing experience,specifically in commercial lines. Requirements range from 5+exams to FCAS. Technical skills and good communication /people skills are highly preferred for this role. (#35278)

RETAINED: Assistant Vice President, Northeast, USA:Insurer seeks ACAS, FCAS or MBA to lead a team of Research Analysts. Should have experience with Commercial Lines and managing a technical staff. Advanced degree in Statistics or Actuarial Science preferred. (#34991)

RETAINED: Casualty Actuary, Bermuda: Regional firm seeks ACAS, FCAS or FIA with 8+ years of experience. Strong background in risk and reserving required. Capital Modeling and Solvency II experience a plus. (#35291)

RETAINED: Health Actuary, Midwest, USA:Multi-national consulting firm seeks Actuary with 6+ years experience. Knowledge in healthcare and pharmaceuticals preferred. Potential to develop into a client-facing role. (#35199)

The Inside Scoop

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Salary Discussions And The Interview Process

How To Ask For A Raise

To be more specific, the data points in the DW Simpson Salary Survey come from a combination of base salary and annual bonus as these are consistently the most stable components of one’s annual compensation. Of course, there are many other financial components [401(k)’s, stock options, long-term incentives, etc.]; however, these, too, can vary greatly and it’s not possible (nor would it be accurate) to include them all in a concise survey.

Further, the DW Simpson Salary Survey is all encompassing in that it does not take into account insurance versus consulting, or New York City versus, say, the rural Southeast. Importantly, salaries tend to be flatter within the Actuarial profession and are not greatly affected by geography, due to the high demand for Actuarial talent nationwide. For example, a consultant in Charlotte would not expect his or her compensation to be fully adjusted according to the variance in cost of living if he or she were to transfer to NYC, or vice versa. Quite simply, the nation’s current supply and demand for talent dictates compensation level - not specific cost of living indices. For example, if it costs 30% less to live in Charlotte versus NYC, you can expect an increase when moving to NYC, but not a 30% increase solely to reflect the cost of living.

Lastly, one might wonder why DW Simpson produces a salary survey. This is simple: DW Simpson is seen as the foremost Actuarial and Analytics recruitment firm worldwide. Given this, we are both a benchmark and a resource to the Actuarial industry. We are able to share with our clients and candidates precise

and trusted data. Because DW Simpson has been compiling and updating our salary survey for more than 12 years, we have the most data points which come directly from those working in the profession. We help clients understand what it takes to retain top talent and we help candidates understand their value in the marketplace. DWS

et’s face it: you believe you are worth more to your employer than they’re paying you. However, you’re not quite sure how to go about asking for a raise. Dressing in tattered, second-hand clothing and living in a refrigerator box near the company entrance did more damage to your reputation than get the message across that you deserve more in compensation.

So, then, what is the best approach in asking for a raise? First, do your homework - are you being compensated competitively? Check out our website and see where you fall in the DW Simpson Salary Survey. Talk to a number of recruiters and ask them what is a competitive compensation level for someone at your exam level and with your years of experience. Ask peers in the industry the same questions. And, if at the end of the day, you realize you fall below market, prepare to make your case to your superior.

Second, make the “asking for a raise” conversation easy on you and your superior. Ask her/him to coffee before the start of the work day, letting her/him know that you’d like to get her/his valuable input on an aspect of your work. Approach the conversation with an upbeat attitude. Recite why you thoroughly enjoy working at the company before you build your case for a raise. Then, build your case for a raise, citing the data that you derived from doing your homework. And then, ask for her/his thoughts, be quiet and listen. You might learn some things that you heretofore did not consider, particularly with regard to your overall work performance and its reflection on your compensation. If you’ve had a history of strong performance reviews, refer to them in a constructive (not defensive) way to help support your case. Remember, upbeat.

Finally, have a number in mind. If you’re at $74K base salary and your homework tells you that, at your level, you should be in the $80K - $90K range, ask for a precise number...confidently. More often than not, a reasonable superior will take your request into consideration, especially if it’s presented in a factual manner and without a “line-in-the-sand” attitude. And when your raise is approved, thank your superior, discard the refrigerator box in the nearest dumpster and take yourself clothes shopping. You deserve it. DWS

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By: Bob MorandPresident and Managing Partner

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ARE SALARY SURVEYS INFLATED? continued

he discussion of salaries can be a delicate one and it is important to position this dialogue at a timely point in the interview process.

So, at what point in the interview process do you discuss salary? Beginning? During an interview? After an offer has been extended?

Most companies will want to know upfront what a candidate’s current salary is. The reason for this is so companies can ascertain whether or not they could make a candidate an attractive offer. For example, if a candidate is currently earning $95K and the position is slotted for a salary up to $80K, there is likely not going to be a fit. During the interview process, companies follow up with DW Simpson recruiters to make sure they have all the components of a candidate’s salary.

Therefore, it’s important to keep your recruiter updated with any promotions, changes to your base salary, exam raises/bonuses, etc. However, the question of salary is not a discussion that a candidate should typically address while in the interview process. If pressed, a candidate should say, “I’m looking for something current with the market,” or “I would like to learn more about the company and role before pinpointing an exact salary.” We recommend this approach so candidates do not immediately rule themselves out based on compensation alone.

Additionally, candidates should discuss with their recruiter what their salary expectations are. Large increases in salary and bonus are not necessarily the norm. Instead, candidates should focus on the overall offer, i.e., the base salary, annual bonus component, benefits, 401(k), vacation and, equally if not more important, the long term career trajectory. All of these are important factors that help make an offer attractive; and, by focusing on the larger picture in total, a candidate will likely be able to make the most educated decision. DWS

800-837-8338 / 312-867-2300 actuaries@dwsimpson.com www.dwsimpson.com

Salary Survey Data More salary info at www.dwsimpson.com/salary

So... What’s New?

The DW Simpson Salary Survey now includes historical data in the form of scatter plots and trend lines. The most recent data points are in dark blue, while previous years are smaller and lighter in color. In general, entry-level and student salaries fall within very predictable ranges, while Actuaries with 7+ years experience see a much wider range of compensation.

What Makes the Top 10% So Special?

Exceptional Oral & Written Communication Skills and Post Graduate Degrees as well as experience in: Management, Product / Business Development, Reinsurance, Consulting Principals, Solvency II, Software / Programming, Predictive Modeling, International Experience, Non-Traditional Actuarial Roles, Chief Actuaries and the list goes on....

A Look Back at Salaries...

The graphs below represent the 90th percentile of FSA and FCAS salaries between 2005 and 2011. After all of the recent eco-nomic turbulence, one thing remains constant – experienced Actuarial salaries continue to grow. The reason behind this is simple - Fellows have always been in high demand / low supply. Economic conditions rarely effect either side of this equation

How’s the Entry-Level Market?

The entry-level market has been the most volatile segment of the salary survey. Way back when, in 2001, an entry-level Actuary would have multiple offers after passing a single exam. In the current market, most employers want to see two exams with internship experience prior to the initial phone interview.

With the recent economic downturn in 2008, the number of entry-level positions available decreased overnight, while employer expectations continued to rise. What we are left with is an abundance of qualified Actuarial science graduates competing for a smaller number of open jobs.

What Can I Do to Stand Out?

The two most important factors to land your first full time Actuarial position are passing exams and internship experience. To help pass your next exam, the formula is simple: Study + Study + Study. You can increase your effectiveness while growing your network by starting a study group. Don’t know anyone taking an exam? Use social networks like the Actuarial Outpost to ask your questions online.

The best place to look for an internship is close to home. Find local companies that hire Actuaries and expand your search radius from there. To land your first internship, make sure that you make every resume count. Do this by researching each company and letting your resume show how your experience lines up with each company’s culture and expectations. Finding a job is one of the hardest jobs you’ll ever have. Fill in these two gaps on your Actuarial resume and you’ll see it’s much easier than you ever expected. DWS

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Company Events

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DW Simpson will be attending the following Meetings, Seminars and Conferences this quarter:

Connect with DW Simpson

DW Simpson ANNOUNCEMENTS

Welcome to the team...

Caitlin Cunningham - Caitlin joined our firm in February and is leading our Entry-level team. She is assisting aspiring Actuaries in launching their full-time careers. Caitlin previously worked in business-to-business publishing, from which she offers 5 years of writing and editing experience.

Valerie Sun - Joining the Hong Kong office, Valerie is originally from China and attended university in Australia before becoming a non-life Actuarial Analyst in Sydney. Fluent in Mandarin, Cantonese and English, Valerie sees this as a perfect opportunity to utilize her background and match Actuarial talent in the region.

Emily Paxton - Emily joined DW Simpson in late March as a Recruiter on Lindsey Nelson’s team. Prior to that, she was an Organization Development Coordinator in Omaha, NE working on a variety of projects within the Human Resources department. Emily moved to Chicago from Omaha in January 2012. Outside of work, she enjoys exploring the city she now calls home!

Casualty Actuarial Society/Society of Actuaries ERM SymposiumApril 18 - 20 at the

Marriott Wardman Park, Washington, DC

Casualty Actuarial Society Spring MeetingMay 20 - 23 at the

Arizona Grand Resort, Phoenix, AZ

Society of Actuaries Life and Annuity SymposiumMay 21 - 22 at the

JW Marriott Los Angeles, Los Angeles, CA

CAGNY MeetingJune 1 at the

New Yorker Hotel, New York, NY

Casualty Actuarial Society CARe SeminarJune 4 - 5 at the

Hyatt Regency Cambridge Hotel, Boston, MA

Society of Actuaries Spring Health MeetingJune 13 - 15 at the

New Orleans Marriott, New Orleans, LA

Southeastern Actuaries Conference (SEAC)June 20 - 22 at the

The Carolina, Pinehurst, NC