What is the best background for Internal Investment Analyst for F500 Insurance Company?

Most seem to require general AM experience. Do you think they care what type of firm it is, i.e. pension fund, MF, ect.

Also would it be better to get an MSF now or an MBA later? What caliber b-school would I need to go to? Is UW or Kelly good enough?

Comments (5)

 
Oct 24, 2013 - 5:15pm

Silent Guardian:

Most seem to require general AM experience. Do you think they care what type of firm it is, i.e. pension fund, MF, ect.

Also would it be better to get an MSF now or an MBA later? What caliber b-school would I need to go to? Is UW or Kelly good enough?


I know a few people who are doing that.

Some sort of a quantitative background on top of finance is going to be helpful here, although the bias in my friendships is towards people who are quants.

A lot of these people either have finance/engineering or finance/stats undergrads, or have an undergrad in STEM and a graduate degree in finance.

You are probably going to have to do stuff like Asset-Liability Matching. Basically, the insurance company is trying to have money come in when it has to pay out policies- and ideally own stock and bonds that go up when the policies it has sold become more valuable to the buyers (and therefore more expensive for the insurance company.) In order to do that, you have to know a little about stochastic optimization. And we're starting to get into that blurry area that a conventional finance undergrad may cover, but where more complicated stats and linear programming gets awfully helpful. Good news is that engineers often have to deal with this stuff.

I'm pretty sure a double-major in stats would be helpful, too. However, while the Big Ten has great schools, they are stronger in engineering than stats. So you may want to look at US News and aim for a top twenty institution in both stats and finance and a top ten institution in one discipline. So this may be more like a UC Berkeley or UVA to maximize your options if you have the money for out of state tuition.

Here are the routes I've seen:

Wash U (Finance/Math) -> Portfolio Modeling at an NYC bank -> Allianz PM.

UIUC Industrial Engineering-> UIUC MFin -> Allstate PM

Engineering Undergrad-> Princeton MFin-> AXA PM

These aren't your typical F500 finance roles, and you need some sort of moderate quant background to do this, but I don't see why you can't do this from a school like UW or Kelley. It *may* require a few years of work experience or a graduate degree.

Again, I am friends with a lot of quants, so there is that bias in my sample set. It may be possible to become a PM at an insurance company without that background. There are also large groups at investment banks such as Goldman Sachs IBD Strats and an ALM group at Deutsche Bank that help a lot of insurance companies with managing the financial risks of their insurance policies.

Engineering is a challenging major that you shouldn't enter lightly. In terms of difficulty on a scale of 1-10 at most Big Ten Schools:

Most liberal arts degrees: 2/10
Finance: 3/10
Accy: 4.5/10
Actuarial Science/ Stats: 5.5/10
Industrial Engineering, CS: 6-7/10 (depending on school)
Mech E, Nuclear Engineering, Structural Engineering: 8/10
Electrical Engineering: 9/10
Physics, Math: 7-10/10 (depends on school)

Doing engineering will cause your GPA to suffer, too. Most Engineering schools hand out an average GPA of about a 2.7 while most business programs hand out an average GPA of 3.5.

But, if you don't think you can handle the math of one of the easier engineering degrees, you may not be able to handle the math of running an insurance company's portfolio. These aren't simple beasts like mutual funds.

 
Oct 26, 2013 - 12:27pm

Ok, I defer to someone who has actually worked for an insurance company.

However, we may be dealing with a high school kid here, and I didn't know a few of the terms you used when I was in high school.

"Fixed Income"- This just means bonds. They can be government bonds, for instance. They can also be bonds issued by corporations or city/state governments (munis)

IG- These are "investment grade bonds" issued by companies and governments with really good credit.

"High Yield"- bonds issued by companies that may very well go bankrupt. EG: the unsecured debt of just about any airline. (Where they haven't done something like a home mortgage where they've put up real estate or an airplane as collateral)

I still think that in most cases, an Engineering degree from UW Madison with ~20 credit hours of finance classes gives you roughly the same number of options to work in finance that a Finance or Business degree from UW gives you. It also gives you a lot more optionality- such as grad school or working on exotics or stochastic/scenario analysis of portfolios, or working for IBM or Boeing.

IU is a bit more borderline. Kelley is an awesome undergraduate business program and IU's Engineering school- though really good- isn't quite where UW Madison's is IIRC. Kelley places a surprising number of graduates into front office roles on Wall Street, and I'm sure they do extremely well with insurance companies, too.

 
Oct 28, 2013 - 9:32am

I work at an internal AM dept of an insurance company in the midwest (small city). I do not have a MBA, but am a CFA charterholder with a background in securitization. As mentioned by others, it's almost all FI, mainly IG or HY, with some securitized, private placements, and FoF/PE. The CFA is very important, at least for the 2 companies I have worked for.

"Give me a fucking beer", Anonymous Genius
Start Discussion

Popular Content See all

LETS FKING GO BOYS
+140IBby Intern in Corporate Finance">Intern in CorpFin
HELP: Sticky Situation with Boss
+131OFFby 2nd Year Analyst in Investment Banking - Mergers and Acquisitions">Analyst 2 in IB-M&A
You Did it Citi
+130OFFby 2nd Year Analyst in Investment Banking - Industry/Coverage">Analyst 2 in IB - Ind
Idgaf anymore
+34IBby 1st Year Analyst in Investment Banking - Industry/Coverage">Analyst 1 in IB - Ind
Anyone else just want out of this shit?
+33IBby 2nd Year Analyst in Investment Banking - Generalist">Analyst 2 in IB - Gen
Evercore Target Schools?
+29BSCHby Prospective Monkey in Investment Banking - Mergers and Acquisitions">Prospect in IB-M&A
To Snitch or not to Snitch?
+22OFFby 2nd Year Analyst in Investment Banking - Industry/Coverage">Analyst 2 in IB - Ind
tipping point - mental breakdown
+21IBby 1st Year Analyst in Investment Banking - Industry/Coverage">Analyst 1 in IB - Ind

Total Avg Compensation

March 2021 Investment Banking

  • Director/MD (9) $911
  • Vice President (31) $349
  • Associates (163) $232
  • 2nd Year Analyst (98) $151
  • Intern/Summer Associate (92) $144
  • 3rd+ Year Analyst (23) $145
  • 1st Year Analyst (370) $131
  • Intern/Summer Analyst (306) $82

Leaderboard See all

1
LonLonMilk's picture
LonLonMilk
98.5
2
Jamoldo's picture
Jamoldo
98.4
3
Secyh62's picture
Secyh62
98.3
4
CompBanker's picture
CompBanker
97.8
5
redever's picture
redever
97.7
6
Addinator's picture
Addinator
97.6
7
frgna's picture
frgna
97.6
8
NuckFuts's picture
NuckFuts
97.5
9
bolo up's picture
bolo up
97.5
10
Edifice's picture
Edifice
97.5