Entry Level Jobs For Actuaries
Actuaries are employed in a variety of different industries, but they all share the same goal: to help their organizations make informed decisions about risk. Because actuaries work with numbers, they require a strong mathematical background. However, there are also many other skills that are important to success as an actuary, which is why it’s important to have a well-rounded education if you’re considering this career path.
Here are some entry level jobs for actuaries that might be right for you!
Financial Modeler: Financial modelers use their knowledge of probability and statistics to build models that predict how investments will perform in the future. They create reports and spreadsheets based on these predictions and present them to clients. This position can be quite lucrative because it involves working directly with clients—and often very wealthy ones!
Technical Analyst: Technical analysts are responsible for making sure that an organization’s financial data is accurate and up-to-date. They analyze trends in order to identify potential problems before they happen, which helps them prevent losses in the future. This job requires strong computer skills as well as good communication skills so that technical analysts can explain what they’ve found in clear terms even
Entry Level Jobs For Actuaries
An actuary is a business professional who deals with the measurement and management of risk and uncertainty.[1] The name of the corresponding field is actuarial science. These risks can affect both sides of the balance sheet and require asset management, liability management, and valuation skills.[2] Actuaries provide assessments of financial security systems, with a focus on their complexity, their mathematics, and their mechanisms.[3]
While the concept of insurance dates to antiquity,[4] the concepts needed to scientifically measure and mitigate risks have their origins in the 17th century studies of probability and annuities.[5] Actuaries of the 21st century require analytical skills, business knowledge, and an understanding of human behavior and information systems to design and manage programs that control risk.[6] The actual steps needed to become an actuary are usually country-specific; however, almost all processes share a rigorous schooling or examination structure and take many years to complete.[7]
The profession has consistently been ranked as one of the most desirable.[8] In various studies, being an actuary was ranked number one or two multiple times since 2010[9] and in the top 20 for most of the past decade.[10]
Contents
- 1Responsibilities
- 2History
- 3Remuneration and ranking
- 4Credentialing and exams
- 5Notable actuaries
- 6Fictional actuaries
- 7References
- 8Sources
- 9External links
Responsibilities
Actuaries use skills primarily in mathematics, particularly calculus-based probability and mathematical statistics, but also economics, computer science, finance, and business. For this reason, actuaries are essential to the insurance and reinsurance industries, either as staff employees or as consultants; to other businesses, including sponsors of pension plans; and to government agencies such as the Government Actuary’s Department in the United Kingdom or the Social Security Administration in the United States of America. Actuaries assemble and analyze data to estimate the probability and likely cost of the occurrence of an event such as death, sickness, injury, disability, or loss of property. Actuaries also address financial questions, including those involving the level of pension contributions required to produce a certain retirement income and the way in which a company should invest resources to maximize its return on investments in light of potential risk. Using their broad knowledge, actuaries help design and price insurance policies, pension plans, and other financial strategies in a manner that will help ensure that the plans are maintained on a sound financial basis.[11]
Disciplines
Most traditional actuarial disciplines fall into two main categories: life and non-life.
Life actuaries, which include health and pension actuaries, primarily deal with mortality risk, morbidity risk, and investment risk. Products prominent in their work include life insurance, annuities, pensions, short and long term disability insurance, health insurance, health savings accounts, and long-term care insurance.[12] In addition to these risks, social insurance programs are influenced by public opinion, politics, budget constraints, changing demographics, and other factors such as medical technology, inflation, and cost of living considerations.[13]
Non-life actuaries, also known as property and casualty or general insurance actuaries, deal with both physical and legal risks that affect people or their property. Products prominent in their work include auto insurance, homeowners insurance, commercial property insurance, workers’ compensation, malpractice insurance, product liability insurance, marine insurance, terrorism insurance, and other types of liability insurance.[14]
Actuaries are also called upon for their expertise in enterprise risk management.[12] This can involve dynamic financial analysis, stress testing, the formulation of corporate risk policy, and the setting up and running of corporate risk departments.[15] Actuaries are also involved in other areas of the financial services industry, such as analyzing securities offerings or market research.[12]
Traditional employment
On both the life and casualty sides, the classical function of actuaries is to calculate premiums and reserves for insurance policies covering various risks.[16] On the casualty side, this analysis often involves quantifying the probability of a loss event, called the frequency, and the size of that loss event, called the severity. The amount of time that occurs before the loss event is important, as the insurer will not have to pay anything until after the event has occurred. On the life side, the analysis often involves quantifying how much a potential sum of money or a financial liability will be worth at different points in the future. Since neither of these kinds of analysis are purely deterministic processes, stochastic models are often used to determine frequency and severity distributions and the parameters of these distributions. Forecasting interest yields and currency movements also plays a role in determining future costs, especially on the life side.[17]
Actuaries do not always attempt to predict aggregate future events. Often, their work may relate to determining the cost of financial liabilities that have already occurred, called retrospective reinsurance,[18] or the development or re-pricing of new products.[19]
Actuaries also design and maintain products and systems. They are involved in financial reporting of companies’ assets and liabilities. They must communicate complex concepts to clients who may not share their language or depth of knowledge. Actuaries work under a code of ethics that covers their communications and work products.[20]
Non-traditional employment
As an outgrowth of their more traditional roles, actuaries also work in the fields of risk management and enterprise risk management for both financial and non-financial corporations.[21] Actuaries in traditional roles study and use the tools and data previously in the domain of finance.[22] The Basel II accord for financial institutions (2004), and its analogue, the Solvency II accord for insurance companies (in force since 2016), require institutions to account for operational risk separately, and in addition to, credit, reserve, asset, and insolvency risk. Actuarial skills are well suited to this environment because of their training in analyzing various forms of risk, and judging the potential for upside gain, as well as downside loss associated with these forms of risk.[21]
Actuaries are also involved in investment advice and asset management, and can be general business managers and chief financial officers.[23] They analyze business prospects with their financial skills in valuing or discounting risky future cash flows, and apply their pricing expertise from insurance to other lines of business. For example, insurance securitization requires both actuarial and finance skills.[24] Actuaries also act as expert witnesses by applying their analysis in court trials to estimate the economic value of losses such as lost profits or lost wages.[25]
