Career as an Actuary

An Actuary is one of the most sought after and highly paid professional in corporate world. Let us understand who is an Actuary and what does he do ?

An actuary is a business professional who deals with the measurement and management of risk and uncertainty. The actuary analyses risks that can affect both sides of the balance sheet and require asset management, liability management, and valuation skills . Actuaries provide assessments of financial security systems, with a focus on their complexity, their mathematics, and their mechanisms. Actuaries are professionals trained in this discipline. In many countries, actuaries must demonstrate their competence by passing a series of rigorous professional examinations.

Actuary basically belongs to the field of Actuarial Science. Actuarial science is the discipline that applies mathematical and statistical methods to assess risk in insurance, finance and other industries and professions. Actuarial science includes a number of interrelated subjects, including mathematics, probability theory, statistics, finance, economics, and computer science. 

An actuary has analytical skills, business knowledge, and an understanding of human behavior and information systems to design and manage programs that control risk. A credible actuary qualification comprises a rigorous schooling or examination structure and takes many years to complete. Actuaries use skills primarily in mathematics, particularly calculus-based probability and mathematical statistics, but also economics, computer science, finance, and business. Actuaries therefore are employed in insurance and reinsurance industries as

  • Staff employees
  • Consultants
  • Advisors for sponsors of pension plans
  • Employees of government agencies such as
    • Government Actuary’s Department in the United Kingdom
    • Social Security Administration in the United States of America

Actuaries assemble and analyze data to estimate the probability and likely cost of the occurrence of an event such as death, sickness, injury, disability, or loss of property. Actuaries also address financial questions, including those involving the level of pension contributions required to produce a certain retirement income and the way in which a company should invest resources to maximize its return on investments in light of potential risk. Using their broad knowledge, actuaries help design and price insurance policies, pension plans, and other financial strategies in a manner that will help ensure that the plans are maintained on a sound financial basis.

Most traditional actuarial disciplines fall into two main categories: life and non-life.

  • Life actuaries include health and pension actuaries and deal with
    • Mortality risk
    • Morbidity risk
    • Investment risk.
    • Life insurance
    • Annuities
    • Pensions
    • Short and long term disability insurance
    • Health insurance
    • Health savings accounts
    • Long-term care insurance
  • Non-life actuaries include property/casualty/general insurance and deal with
    • Physical and legal risks that affect people or their property
    • Auto insurance
    • Homeowners insurance
    • Commercial property insurance
    • Workers’ compensation
    • Malpractice insurance
    • Product liability insurance
    • Marine insurance
    • Terrorism insurance

Actuaries are also called upon for their expertise in enterprise risk management, dynamic financial analysis, stress testing, the formulation of corporate risk policy, and the setting up and running of corporate risk departments. Actuaries are also involved in other areas of the financial services industry, such as analysing securities offerings or market research.

There are relatively few actuaries in the world compared to other professions and they are high in demand.  As of 2016, in the United States, newly credentialed actuaries on average earn around $100,000 per year, while more experienced actuaries can earn over $150,000 per year . As of 2014,  in the United Kingdom a starting salary for a newly credentialed actuary is about £50,000; actuaries with more experience can earn well in excess of £100,000.

The actuarial profession has been consistently ranked for decades as one of the most desirable. Actuaries work comparatively reasonable hours, in comfortable conditions, without the need for physical exertion that may lead to injury, are well paid, and the profession consistently has a good hiring outlook. It is considered one of the best professions for women  and one of the best recession-proof professions.

Source of info: Wikipedia

Click here for information on exams related to actuaries country wise 

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