The actuarial profession is a fast-growing one with opportunities opening up throughout Australia and the world.
In Australia, the number of qualified actuaries as at May 2010 was 1,755. Typically, a newly qualified actuary would earn around $95,000 -$110,000 per annum, with at least an $11,000 increase per year for several years. More senior, experienced professionals earn in the vicinity of $200,000 per annum.
Around the world, actuaries are in demand in a growing number of industries, which are no longer restricted to the finance and insurance. Opportunities for actuaries are opening up in diverse areas such as health and education, the environment and climate change, public infrastructure and genetics.
Some of the major areas of demand and interest are outlined below:
The actuarial profession has its foundations in life insurance. In spite of diversification into other areas, over 25% of Australian actuaries work in life insurance. Apart from their traditional roles, actuaries can be found in many other positions within life insurance, including dominant roles in executive management. The Appointed Actuary has a statutory responsibility for reporting on the financial stability of a Life Insurance Company.
Traditional tasks for actuaries involve determining premium scales, designing new types of policies, assessment of risks, formulation of corporate investment policy, testing of profitability and allocation of surplus to policyholders and shareholders.
Actuaries are involved in many other aspects of life insurance including general management, advising on market strategies, developing corporate and computer systems, training and supervision of sales staff and financial control functions.
The next largest concentration of actuaries - nearly 20% - work on matters related to superannuation. Positions range from executive management through to administration, and to technical actuarial tasks and consulting.
Now a compulsory component of every Australian employment package, superannuation has become a major avenue for national savings and retirement income.
Actuaries are involved in designing superannuation funds and other employee benefit schemes to meet the needs of industry groups, employers, employees and individuals. Through the construction and application of mathematical models, they are able to project financial outcomes from a range of input variables.
Apart from managing and administering many schemes, actuaries work closely with superannuation fund trustees, providing regular advice and guidance. They are frequently required to comment on the impact of proposed changes in government legislation and taxation on superannuation.
Actuaries also provide advice in trust deed preparation, insurance and investment.
The economic interdependence of nations today and the need to make sound investment decisions have focused attention on the value of actuarial advice.
Increasingly, by virtue of their experience in analysing financial transactions and assessing risks, actuaries are undertaking a wide range of technical and management roles in the investment and financial services sectors.
A feature of the general insurance business today - fire, accident, motor vehicles, workers' compensation - is the growing contribution made by actuaries.
Their analytical and statistical training enables the application of sound theory to the assessment of the impact of changing conditions on the financial viability of general insurance products and the reserves to be held for future claims.
Financial Services, Risk Management, Health Insurance & Business
Apart from the four major work areas, there is growing demand for actuarial services in health insurance, risk management and the financial services industry, of which banking is just one part. The number of actuaries employed by banks, merchant banks, insurance brokers, stockbrokers and other financial services companies is increasing.
Federal Government currently employs actuaries in the roles of Government Actuary and Deputy Commissioner (Life Insurance) and as support staff for both these positions.
State Governments employ actuaries to supervise the management of their superannuation funds, friendly societies, health insurance funds, and to provide other actuarial advice as required.
Furthermore, as large corporations, including those committed to manufacturing, adjust to more challenging market conditions, there is a definite role for actuaries as contributors to the development of long-term strategic plans.
Challenging careers in university education, computer software and management consultancy have also attracted a number of actuaries.
A growing number of actuaries are working in non-traditional areas, such as the environment, climate change, genetics, information technology, e-commerce, telecommunications, and public infrastructure. As we move to an increasingly globalised society, more non-traditional roles are likely to open up to the actuarial profession.
More opportunities will also arise for actuaries to become involved in special events. For instance, SOCOG called on actuaries to assist in one of the most comprehensive decision-making processes in its lead-up to the Sydney 2000 Olympics. A computer model was developed to evaluate offers made by competing broadcasters for the international television rights for the Games. In high-level negotiations requiring comparisons and judgment, the work of actuaries greatly assisted SOCOG to reach its final decision.
One third of the practising actuaries work for actuarial consultancies, either as partners or employees. Consulting actuaries provide high level advice to those entering the insurance and superannuation markets, and about the purchase and sale of insurance companies.
They also provide supplementary and specialist actuarial services for insurance companies, as well as fulfilling statutory roles for those companies not employing their own qualified actuaries.
Consulting actuaries often lead the profession in newer areas of work such as those related to health insurance and the activities of finance companies and other financial institutions.