What is an actuary?
Actuaries apply financial and statistical theories to solve real business problems. These business problems typically involve analysing future financial events, especially when the amount of a future payment, or the timing of when it is paid, is uncertain. A lot of actuaries’ work might be thought of as ‘risk management’, assessing how likely an event may be and the costs associated with it.
The traditional areas in which actuaries operate are: consultancy, life and general insurance, pensions, and investment. Actuaries are also increasingly moving into other fields, where their analytical skills can be employed.
Actuarial consultancies
Consultancies offer a range of services to their clients on issues such as acquisitions, mergers, corporate recovery and financing capital projects. Many also offer advice to employers and trustees who run occupational pension schemes.
Actuaries in insurance
The work carried out by actuaries in insurance includes designing new insurance policies, setting premium rates, calculating a company’s financial status and answering technical queries from policyholders.
Actuaries in pensions
In the pensions field, actuaries are usually involved in designing and advising company pension schemes, especially where a value needs to be placed on a scheme’s accumulated pension promises. This could be for a formal valuation of a whole scheme, which is legally required every three years or for an individual’s benefits.
Investment
In the area of investment, actuaries are involved in a range of work such as pricing financial derivatives, working in fund management or working in quantative investment research.
Adapted from an article in ‘Inside careers 2004-2005’ by Charles Young
