What Does an Actuary Do?

whatdoesanactuarydo An actuary is a highly skilled professional dealing in financial mathematics, future cash flows and the corresponding uncertainties. Basically, actuaries are risk analysts of future events in the business world. Uncertainty brings with it risk but risk is also opportunity, and that is when actuaries become relevant.

The typical day in the life of an actuary is really an amalgamation of many skills ranging from business judgment, to social and psychological analysis, to math and programming. As a kick start to becoming a great actuary this course in Learn Financial Modeling from Scratch will be a perfect place to start off. Actuaries are supposed to possess objective business reasoning based on figures and backed by laws of probability.

All over the world, actuaries are respected professionals in evaluation of the probability of future events and the likelihood of major business milestones. They are also tasked with modeling creative ways of minimizing or mitigating risk in a company. The effect future uncertainties on the value of a firm also come into play in the process of the analysis, so the actuary has to find ways to manage risks facing a certain portfolio or company.

The services of an actuary are in great demand as they are sought for risk managing roles in large corporations. Consultancies are however some of the most common employers. Their main task is being in a position to help client firms go about routine activity without worrying much about what the future holds.

Where Can I Work as an Actuary?

Being an actuary comes with a world of opportunity. Prospects will be able to secure great employment in the following settings.

  • Consultancies

Tasks here will involve actuaries offering advice to clients on matters such as acquiring subsidiaries, merging of business interests, capital financing, pension schemes and retirement benefits. Many actuaries hide behind consultancies to get an exposed view of the market and get a chance to fast-track their careers as opposed to working in a single company. A great introductory course in Corporate Valuation: How To Value Companies and Mergers will help you get a glimpse of the role of an actuary in corporate valuation. This is one of the simplest guides both for starters and advanced professionals so give it a try.

  • Investment

Actuaries will also look for jobs in investment companies. They basically will be involved in researching on the pricing of securities, implementing portfolio balancing and mitigation of risk factors. This is also coupled with tasks in managing the investment options.

  • Insurance

Actuaries are sought professionals in the insurance industry. Mainly they are expected to handle numerical analysis of risk factors and probability in insurance risk. They must also be able to interpret and explain complex insurance claims data, and analyze the same using probability and stochastic models.  They should also be able to modeling claims and flow of expected incomes and expenditure.

  • Pensions

In pension funds, actuaries make pension schemes, advice to pension fund managers and judge on the liquidity considerations of a fund. This is in terms of placement of value on commitments versus future cash flows of a company. They suggest idealistic but practical tied-up capital provisions and ratios for the fund to follow to survive.

What Projects Will I Handle as an Actuary

Actuaries find themselves analyzing different case scenarios in business situations. This includes analysis of the business environment such as weather, politics or even sociological shifts. Actuaries are multi-skilled so they get openings in many places including positions in pricing, design and marketing of financial instruments.

What Skills Do I Need to Have?

To be an actuary, one must demonstrate a deep understanding of business systems, and have natural mathematical, statistical and economic thrift. A great analytical mind, good understanding of the human and societal behavior are very primary assets for any actuarial prospect. They must have the ability to manage complex business situations and coherence to translate theory into practical application. Above all, the actuary must be able to communicate technical topics to non-technical people and not lose them in the way. This Consulting Skills Series – Communication course will help you have a clear direction in proper business communication, which is essential in the professional practice.

These skills are handsomely rewarded with actuaries being amongst the best paid professionals around the globe. Newly qualified actuaries in the US can earn $100,000 a year with the more experienced ones earning $150,000 and above. In the UK there are more qualified actuaries, so the starter salaries for the associates are lower. They start from $50,000.

Becoming an Actuary

The procedure to become an actuary is simply enrolling for the exams and studying your way up to a fellow of the Casualty Actuarial Society or the Society of Actuaries. Students who choose the UK qualification of the Fellow of the Faculty of Actuaries will follow a similar pattern.

It is very challenging as evidenced by the insanely high paycheck and the small number of those qualified. Basically, with the first paper passed, candidates are officially recognized as students. When you pass the second, you become an associate. The final stage is specializing in a narrow field of the profession such as pensions, life insurance, non-life insurance, or health insurance in the advanced stages. Passing these exams makes one join the prestigious ranks of being a fellow qualified actuary.

Prepare your mind for a rigorous training that will always lead to a pay rise for the already practicing students. For those taking an academic break to pursue the papers, it reflects to a huge increase in a top job prospect. A program in Learn R by doing is definitely going to prepare you for some high level statistical programming expertise, much needed in the actuarial practice.

If you are looking to be an actuary in the next, say five years, be advised to enroll to a math major course or statistical discipline with heavy business proliferation such as economics and financial engineering. A course in Practical Statistics for The User Experience I is a major milestone into joining this prestigious career. For those with non-math majors, worry not. This program will prepare you to handle statistics like a guru using the latest software packages for statistical analysis. Enroll right away and thank Udemy later!