Thomas Totten '87: Actuaries and Startups

Author: Sarah Cate Baker

Totten Tom

On October 5, distinguished actuary, CEO, and Notre Dame alumnus Thomas Totten ’87 gave a talk to undergraduates titled “Actuaries and Startups.” Intended for students with both actuarial and entrepreneurial futures in mind, the lecture used Totten’s own actuary-based startup to exemplify how the two fields can complement each other, and accomplish amazing things. The talk was in many ways a preview to a new course available next spring, in which undergraduates will receive hands-on experience doing real actuarial work pertinent to Totten’s company.

Totten graduated from Notre Dame with a bachelors in mathematics in 1987. As an actuarial scientist he spent time working for Hewitt and United Actuarial Services, and is currently CEO of the consulting company Nyhart. In that capacity, Totten recently co-founded the start-up Votaire, which uses actuarial science to help clients create a retirement plan.

Totten argued that while there appears to be a dichotomy between entrepreneurship and actuarial work – the first being inherently risky, while the second is focused on avoiding risk – actuarial-based startups can be uniquely poised to answer some of society’s most challenging problems. His startup Votaire is an excellent example. 

“The problem is simple: you retire, you have a pot of money, and there’s no more coming in. How do you make that pot last a lifetime?” Totten explained that the problem of retirement planning is fundamentally actuarial: with no more money coming in, any decision by a retired person to spend is a risk. How much they can spend and how much financial risk can they accrue – are questions best answered by a team of actuaries. In Votaire, Totten assembled such a team, and now he is inviting Notre Dame undergrads to join in the fun. 

In the spring of 2017, Totten’s company is partnering with Notre Dame to create a brand new course designed for undergrads with actuarial aspirations.The class is meant to give students authentic experience in using actuarial science to solve some very real problems facing the retirement industry. 

“It’s very close to what I would consider original research,” said Totten, speaking about the course’s curriculum.“What we’re going to have the students do is actually test some things that we have not yet built…it’s actually very practical but it’s all math.”

The class will be research-based, and students will have to address three major challenges facing the retirement industry: How an individual should choose a retirement plan; What an individual’s risks are in living longer; and How much money should public pension programs plan to distribute. A case-study for aspiring actuaries, the course will give students a taste of what being an actuary is really like and perhaps inspire them to form their own startup companies in the future.