JEAN-PAUL, 29 years old
BNP Paribas Assurance
How he became a mathematician
“After doing a master’s degree in pure math, I was hesitating between a master’s in financial engineering and a master of advanced studies followed by a thesis. At first, I was thinking about a career as a researcher in numerical analysis or probability. On the advice of the director of LAMFA (the Laboratory of Pure and Applied Mathematics of Amiens), where today I teach classes in financial mathematics, I finally opted for the master’s in financial engineering. I let myself be persuaded all the more easily because I was already doing a little bit of amateur trading. I started my career as a financial engineer in the risk management department at the Edmond de Rothschild financial company. I was in charge of creating an instrument for managing certain risks experienced by traders. Then I worked in the auditing and consulting office at the actuarial company PricewaterhouseCoopers, where they suggested that I complete my programme with an actuarial diploma. And so I took post-graduate actuarial courses at the CNAM (National Conservatory of Arts and Crafts). Now all I have to do is present a final report to become an official actuary. In the meantime, I have been hired by BNP Paribas Assurance.
How mathematics comes into play in his job
Performing the classic task of the insurer, the actuary brings to bear skills in probability and statistics in order to master the element of chance in insurance contracts in order to minimize financial losses and create profits.
“I manage risk in protection insurance related to work disability, illness, and unemployment. My specialty is establishing probabilistic models for ensuring financial coverage of the protection insurance contracts managed by our company. The concepts I work with make it possible to calculate the value represented by the parties insured by our company. The value of the insured parties is a piece of data calculated based on the company’s assets (that is, different financial products), but also based on probabilities concerning the health of each of the insured parties (life, death, inability to work, illness, disability, etc.).
“I work on stochastic processes based on statistical data on risks. In order to establish a probabilistic model of the value of the portfolio of those insured by our company, I figure out the essential parameters based on data from the past. Then, I predict the value of this portfolio for each of the situations that could occur over the duration of the contract. The average of these different values yields the portfolio’s probable future value, up until the end of the contract.“I am an actuary most oriented towards financial engineering; others in my job have a more traditional profile as statisticians. The emergence of financial mathematics as a skillset within the actuarial field is linked to the explosion of complex financial products proposed by insurance companies, as well as the institution of new norms. But the essence of the job remains the statistical calculation of risk; its rules are based on the intersection of individuals’ right to insurance with the fixing of price scales that will yield a profit to the insurance company.”
What are the qualifications?
Bac + 5, actuarial diploma or actuarial training offered by certain engineering or commerce schools or by the ENSAE.
Translation: David Kramer