What does an Actuary do?
Actuaries evaluate risk and opportunity. They apply mathematical, statistical, economic and financial analyses in a wide range of practical business problems. Many actuaries also participate in the operational management of financial institutions. Insurance, superannuation, stockbroking, investment, banking and Government are the more readily recognised fields in which actuarial services are utilised. However actuaries also work in new, high-growth fields such as the environment, climate change and genetics. Within these areas, actuaries may:
- design insurance policies, superannuation and other financial contracts;
- calculate premiums or contributions to be paid by members/participants in financial arrangements;
- advise insurance companies on the level of financial reserves held to meet claims;
- advise insurance companies on prudent distribution of profits;
- assist with investment policy and asset allocation;
- assess demographic influences on financial arrangements;
- act as private consultants managing superannuation and other employee benefit schemes;
- advise industry and commerce on a wide range of financial and statistical problems, eg. compensation; and
- design, manage or supervise financial policies for Government in areas such as social welfare, superannuation and pension schemes.
In carrying out this work, actuaries draw on resources provided by other legal, accounting, medical and economic professionals. They refer to information provided in journals, mathematical tables, statistical and other records and use sophisticated computer programs to process the relevant data.
Actuaries always have excellent mathematical skills combined with the ability to think clearly and logically. They also need to be very focused and detail-oriented. They must have an interest in such issues as probability and risk identification and assessment, with an ability to understand complex financial topics such as derivatives.
Actuaries must also be solutions-oriented with a desire to solve complex, difficult problems. As actuaries often hold senior positions of authority and responsibility, they need to be able to communicate effectively at all levels.
Becoming an actuary is a highly specialised career path requiring several years of study before qualification as an actuary. The rewards are well worth the effort, generally providing an above-average income combined with the opportunity to work anywhere in the world.