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Actuary

Actuary

Tell me about it
The job of actuaries is to make financial sense of the future. They help the financial world and governments to evaluate the long-term financial implications of their decisions. This involves actuaries using mathematical and statistical expertise and knowledge, as well as economics, business law and practice, marketing and accounting.
 
The work includes analysing what happened in the past (eg accident rates for particular groups of people, cars or aeroplanes), modelling the future (eg predicting the effects of different life expectancies on the investments required for funding pensions), assessing the risks involved (eg the chances that an earthquake will occur in a particular area), and explaining to senior managers and directors what the results mean in financial terms.
 
Actuaries have traditionally been concerned mainly with life assurance and pensions but are increasingly involved in assessing risks associated with areas such as general insurance, investment and healthcare. Their analysis plays a vital role in their organisation's business decisions - eg what rates to apply for insurance policies to be profitable but still competitive. In insurance companies, actuaries calculate the funds needed to cover the firm’s long-term liabilities. 
 
Many actuaries work for consultancies that advise organisations on various financial activities that have a degree of risk, especially occupational pension schemes. In the Government Actuary's Department, they advise other departments on matters such as social insurance, state pensions and public sector pensions.
 
Entry level
Actuaries have to be Fellows of the Actuarial Profession, starting with student membership and studying for professional exams while working. The minimum entry requirements for this are at least two A levels or equivalent, and three GCSEs (A*-C) including English. One of the A levels should be maths at grade B, or further or higher maths at grade C, and the other A level must be at least grade C.

In practice, most employers seek graduates when recruiting new entrants, often from numerate disciplines. The main degree subjects of successful entrants are maths and actuarial science, although economics, statistics and physics are also well represented. Some entrants to actuarial work have a postgraduate qualification in actuarial science. Entry to postgraduate courses is usually with at least an upper second class honours degree in maths, statistics, economics or a related subject.
There is no upper age limit for entry to this work and it is often a second career for people with strong numerical skills.

Several universities offer degrees in actuarial science, or degrees with substantial actuarial content. Courses usually last three years full time. A few universities also offer actuarial postgraduate courses that usually last one year full time.

Many actuarial employers encourage internships and often use them as opportunities to evaluate suitable candidates for future positions. 

If you are interested in joining the profession, learning more about it, or simply improving your financial skills, you can get a taste of what it's like to study as an actuary by taking the Financial Mathematics examination. Full details of how to apply can be found on the Actuarial Profession website.

Making the grade
You would usually start work as a trainee and would be given induction training by your employer. You would study part time for professional exams.
To become an Associate or Fellow of the Institute and Faculty of Actuaries, you must pass a series of examinations, or be granted exemption from them, and also attain a satisfactory level of work-based skills. This usually takes between three and six years.
The examinations cover topics such as statistical modelling, economics and financial actuarial maths. You study by distance learning, and many employers offer support for study, some offering paid study leave during your training.

If you have a relevant degree or postgraduate qualification, you may get exemption from some of the professional exams. Once qualified, you have to keep up to date with relevant changes.

Personal qualities
As an actuary, you should have outstanding maths and statistics skills, and an aptitude for analysing data. You would need excellent verbal and written communication skills in order to explain complex information clearly and concisely.

Accuracy and attention to detail would be very important, as would excellent time management, prioritising and IT skills. The training is long and difficult and you would need determination to see it through.

Looking ahead
Most actuaries begin by working for a life assurance or consultancy company. Other employers include general insurance companies, banks, large industrial and commercial companies and the Government Actuary’s Department. Actuaries work throughout the UK but there is a concentration of employers in London, Edinburgh and south-east England.

The number of actuaries is growing steadily and employment prospects are excellent. Life assurance and consultancy are the largest sectors employing actuaries, with general insurance the fastest growing sector at present. Actuaries can move between different specialist actuarial areas, and promotion is possible in larger companies to management positions and then to senior executive or director level. It can be possible to become a partner in a consultancy firm. 

There are also excellent opportunities for UK actuaries to work overseas.

Alternative suggestions
Other possibilities might include training as an accountant, chartered secretary, economist, financial consultant/adviser, insurance underwriter, investment analyst or statistician.

Take-home pay 
Actuaries are generally very well paid.  You would usually earn in excess of £30,000 while training, and on qualification should see your earnings soar from around £45,000 to £65,000 a year. They should rapidly increase afterwards, often with an excellent package of benefits. A practice head typically earns around £100,000 a year and a chief actuary/senior partner £180,000 plus.

Effects
Actuaries work normal office hours but often have to work beyond those times. Those working in consultancy tend to have to work more flexibly in order to meet clients’ demands. This can sometimes include weekend work. Part-time work as an actuary is possible. Actuarial work is very responsible and demanding, and can be stressful, especially when huge financial risks are involved.
 
Much of the study for professional examinations has to be done during evenings and weekends.

Sources of information
Actuarial Profession: www.actuaries.org.uk
Government Actuary's Department: www.gad.gov.uk
Inside Careers: www.insidecareers.co.uk

Association of Consulting Actuaries: www.aca.org.uk

 



 

 

 

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