What does an actuary do?
Actuaries calculate the probability of different outcomes and their potential financial impact. They analyse data to help plan for the future and minimise risk. Insurance can involve actuaries in:
- Calculating insurance premiums
- Advising on pension plans
- Managing financial assets and liabilities.
An actuary’s traditional areas of work include pensions, life and general insurance, investment and consultancy.
In insurance, actuaries analyse past and present date in order to solve real business problems which they will then relay and offer their expert advice to non-specialists with their excellent communication skills.
Where do actuaries work?
Actuaries can use their skills and expertise to expand their work into various different areas and this can include in investment management and corporate finance, banking, pensions and benefits and of course risk management. In the insurance industry, actuaries can work in different areas and have different roles depending on the area they work in.
For example, in life insurance, actuaries are involved in all stages of the produce development, pricing, risk assessment and marketing of the products. They can also fill key roles in financial management and the investment of policyholders’ money by developing strategies to ensure that customers get a good return.
In general insurance, actuaries are working with personal insurance such as home insurance as well as insurance for large commercial risks where they are responsible for the financial management of the company they work for. Actuaries can also move into working in reinsurance or even in broking operations. Statistical models are a key part of an actuary’s work, as actuarial and statistical techniques are used substantially in their work to analyse large amounts of date. This analysis is then used to rate risks and to ensure that claims reserves are adequate to meet the eventual settlement of insurance claims.
An actuarial career can be quite rewarding financially depending on their education level, skill set and expertise. In the past few years, salaries have risen slightly with graduate salaries starting at around £28,000 going all the way up to around £269,000 for senior roles such as being a partner. For experienced actuarial analysts/consultants the salary can be around £36,000 going up to £54,000 for more senior actuarial analyst/consultant roles.
An actuarial degree is not a requirement to enter the profession. However it is necessary to have an A level or equivalent in maths, as well as a mathematically-related degree, such as maths, statistics, economics, science or engineering.
To become a professional actuary, you will need to pass the exams and qualify as a Fellow of the Institute and Faculty of Actuaries. Graduate training schemes are the usual way to enter the profession, which you apply for directly with insurance employers. Your employer will then provide on-the-job training, as well as allowing you study days and sponsoring you through your actuarial exams.