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September 30, 2006

Actually I’m an actuary

Mary Kate Smith applies her love of mathematics to assess the risks of life

Mary Kate Smith loves mathematics, and while going to graduate school figured out a way to turn it into a rewarding career: She became an actuary for an insurance company. The job lets her revel in regression analysis, forecasting, model building, probability distribution and similar such things that most people barely understand. Her employer is First Insurance Company of Hawaii Ltd. in Honolulu, which she joined last year after working for an insurance brokerage in Chicago. A native of Los Angeles, Smith has a master's degree in mathematics from the University of Virginia and a bachelor's degree in mathematics from California State University, Northridge. She is married to Norman Rhines, with whom she lives in Waikiki. Smith, 42, said she walks to her offices near Thomas Square from home every day. "I walk to work and I love it," she said. "It's 40 minutes each way, so I get lots of exercise and I don't have to fight the traffic."

Question: How would you describe your job?

Answer: Well, I work for a property casualty insurance carrier that does business in the state of Hawaii, and what I do for this company is evaluate the loss reserves, which is part of financial reporting. There's a lot of regulations surrounding insurance, so we're here to support the loss-reserves estimates, to basically make sure the company has enough money to pay all its claims.

Q: So there's some law saying the company has to have so much in reserve?

A: There's uncertainty. For example, in workers' comp, the ultimate value of a claim might not be known for many years. We have a claim from 1960 that we're still paying off. So these claims go for many years, and it requires an actuary to determine how much these claims will actually cost so the company can set aside enough funds to pay the claims.

Q: What kind of insurance does First Insurance sell?

A: We offer all types of insurance. We have homeowner and auto products, and then for the business community we offer workers' compensation, liability, auto ... those are our main product offerings.

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Posted by Tom Troceen