This article contains information on what you can do with an Actuarial degree in 2020. An actuarial scientist is a recognized mathematical professional who has the skills to demonstrate and manage uncertainty and financial risk.
They play an integral role in the areas of business, commerce, government, stocks, and insurance and a host of industries. However, Actuarial science is the science/art of arithmetically and scientifically assessing the risk present in a situation, be it a business investment, an insurance investment, or a stock/bond investment.
The actuarial field is one of the most common industries in which math graduates find work.
Actuaries specialise in evaluating financial risks in order to manage and advise clients. They combine risk analysis skills with in-depth knowledge of Probability, Economics, Mathematics, Finance, Computer science and Statistics to calculate and manage risks for companies. Actuaries ensure sound investments are made and commercial/business goals fulfilled.
Actuaries also work in the public sector. In the federal government, actuaries may evaluate proposed changes to Social Security or Medicare or conduct economic and demographic studies to project future benefit obligations. At the state level, actuaries may examine and regulate the rates charged by insurance companies.
Most actuarial work is done with computers, using database software to compile information. They use advanced statistics and modelling software to forecast the probability of an event occurring, the potential costs of the event if it does occur, and whether the insurance company has enough money to pay future claims.
Important Skills for Actuaries
- Analytical skills: Actuaries use analytical skills to identify patterns and trends in complex sets of data to determine the factors that have an effect on certain types of events.
- Problem-solving skills: Actuaries identify risks and develop ways for businesses to manage those risks.
- Computer skills: Actuaries must know programming languages and be able to use and develop spreadsheets, databases, and statistical analysis tools.
- Communication skills: Actuaries must be able to explain complex technical matters to those without an actuarial background. They must also communicate clearly through the reports that describe their work.
- Interpersonal skills: Actuaries serve as leaders and members of teams, so they must be able to listen to other people’s opinions and suggestions before reaching a conclusion.
- Numerical skills: Actuaries quantify risk by using the principles of calculus, statistics, and probability.
Duties of Actuaries
Actuaries typically do the following:
- Compile statistical data and other information for further analysis
- Estimate the probability and likely economic cost of an event such as death, sickness, an accident, or a natural disaster
- Design, test, and administer insurance policies, investments, pension plans, and other business strategies to minimize risk and maximize profitability
- Produce charts, tables, and reports that explain calculations and proposals
- Explain their findings and proposals to company executives, government officials, shareholders, and clients
Furthermore, those with a degree in actuary have opportunities to work in big firms and organizations, especially in insurance and financial industries.
Some actuaries apply their expertise to financial matters outside of the insurance industry while some help companies manage their own risk, a practice known as enterprise risk management.
Enterprise risk actuaries identify any risks, including economic, financial, and geopolitical risks that may affect a company’s short-term or long-term objectives. They help top executives determine how much risk the business is willing to take, and they develop strategies to respond to these issues.
Actuaries will help companies avoid, manage, and respond to any potential financial risks across all areas of their business operations. This analysis helps companies adjust their business or investment strategies to achieve economic returns and respond to new financial regulations and requirements.
As an actuarial degree holder, below are things you can do with your degree:
1. INSURANCE ACTUARIAL ANALYST
Insurance companies need actuaries to analyze a large amount of information, such as medical or property data, collected from customers. The increase in available data will allow insurance companies to better develop new products, set competitive prices, predict consumer behaviour, and make more accurate projections of future risks and costs.
On this note, a large number of actuarial science graduates and actuaries work in the insurance industry. Being that insurance companies have different sectors, actuaries in this industry typically specialize in a specific field of insurance, such as health, life, property and casualty insurance.
Health Insurance Actuaries: They develop long-term care and health insurance policies by predicting expected costs of providing care under the terms of an insurance contract. Their predictions are based on numerous factors, including family history, geographic location, and occupation.
Life Insurance Actuaries: They develop annuity and life insurance policies for individuals and groups by estimating, on the basis of risk factors such as age, gender, drug use, how long someone is expected to live.
Property and Casualty Insurance Actuaries: They develop insurance policies that insure policyholders against property loss and liability resulting from accidents, natural disasters, fires, and other events. They calculate the expected number of claims resulting from automobile accidents, which varies with the insured person’s age, sex, driving history, type of car, and other factors.
Underwriter: This is another area in which Actuaries can specialize in an insurance company. An underwriter determines whether or not to accept applications for insurance coverage by considering the risks involved in protecting the policyholder based on factors such as age, health condition and occupation. They generally prepare insurance policies, collect and analyse statistical data on potential policyholders and carry out risk assessments. This involves examining if the insurance company can afford to undertake the risks of these policyholders. Once this assessment is made, the underwriter will price the insurance premiums accordingly.
As an insurance actuarial analyst, you will use your statistical skills and knowledge to design and price insurance policies, taking into account a complex set of factors.
Hence, an insurance actuary you must have a good background of calculus, statistics and probability. You’ll also need to have exceptional analytical skills to see how specific factors may influence the outcome of events.
2. ACTUARIAL CONSULTANT
Actuarial consultants evaluate, manage and advise companies on financial risks. They use financial and statistical theories to assess the likelihood/ probability of a particular event occurring as well as estimate the financial costs that the company will have to bear as a result of it.
Unlike actuaries who work for insurance companies, consulting actuaries work with a variety of clients where they provide consulting services to companies such as banks and government regulators. Their responsibilities might include evaluating pension plans, managing risks, pricing insurance products and assessing appraisal values in mergers and acquisitions.
As an actuarial consultant, you will be expected to have a diverse range of skills, including a high level of numeracy and IT skills, sound business judgment and the ability to summarise and communicate complex technical information.
Some actuarial consultants also provide advice to clients on a contract basis. Many consulting actuaries audit the work of internal actuaries at insurance companies or handle actuarial duties for insurance companies.
3. BUSINESS ANALYST
The skillset you gain from an Actuarial Science Degree also prepares you for a career as a business analyst. Here your work basically involves examining the operations, structure and policies of an organisation and recommending solutions to enable them to achieve their goals.
In this role, you will have to be able to analyse and evaluate complex data efficiently, display effective problem-solving skills and be IT savvy to succeed.
The business analyst, sometimes, is someone who is a part of the business operation and works with Information Technology to improve the quality of the services being delivered, sometimes assisting in Integration and Testing of new solutions. Business Analysts act as a liaison between management and technical developers.
Below are the skills required of a business analyst;
- Oral and written communication skills
- Interpersonal and consultative skills
- Knowledge of the business structure
- Analytical thinking and problem solving
- Being detail-oriented and capable of delivering a high level of accuracy
- Stakeholder analysis
- Costs benefit analysis
- Processes modelling
- Organizational skills
- Understanding of networks, databases and other technology
4. RISK ANALYST
As a risk analyst, you will advise companies about the potential risks of new and existing projects, as well as predict factors that could negatively impact the business. These risks may include operational risks and financial risks.
Risk analysts are expected to have exceptional organisation and decision-making skills, a keen business sense, the ability to evaluate complex numerical data and good communication skills.
A risk analyst evaluates financial documents, economic conditions and potential clients to help companies determine the level of risk involved in making a particular business decision. They typically work for banks and insurance companies, though any company handling large amounts of money may choose to hire a risk analyst. You should be able to use software programs, including Excel, and complete extensive research to evaluate business decisions.
5. INVESTMENT ANALYST
An investment analyst who can also be referred as a securities analyst, equity analyst, or financial analyst, is a person who looks at the performance of various types of investment and advises people on future investments. They provide guidance to businesses and individuals making investment decisions. They assess the performance of stocks, bonds, and other types of investments.
Most investment analysts research opportunities and trends at home and worldwide.
Basic duties of an Investment analyst include:
- Researching businesses,
- Analyzing companies’ accounts, cash flow information, and profit and loss sheets,
- Analyzing and interpreting complicated financial data,
- Writing financial reports,
- Regularly meeting with stockbrokers, fund managers, stock market traders, and company managers,
- providing advice and making informed recommendations,
The required skills of a financial analyst include;
- Exceptional research skills,
- Good presentation and report writing skills,
- Good understanding of financial markets, business and economics
- Good at working with numbers,
- Excellent IT skills, especially spreadsheet
- Good team player, but you will often have to act on your own initiative
If you are interested in financial markets and enjoy research and analysis, being an investment analyst may be your ideal choice with your actuarial degree.
6. POSTSECONDARY TEACHER
Postsecondary teachers instruct students in a wide variety of academic and technical subjects beyond the high school level. If you are passionate about sharing your knowledge and love for mathematics with others, you should consider teaching with your degree.
With an Actuarial Science Degree, you can teach subjects such as mathematics, additional mathematics and statistics at secondary schools or pre-university level students. As a teacher, you will be tasked with designing curriculum plans, initiating class discussions and preparing students for their exams and assessments. You will also need to simplify difficult mathematical concepts and create innovative ways to keep your students engaged in the classroom.
If you have obtained your master’s degree, you can advance in the teaching profession to lecture in higher Institutions.
7. PENSION AND RETIREMENT BENEFITS ACTUARIES
This field involves designing, testing and evaluating company pension plans to determine if the expected funds available in the future will be enough to ensure payment of future benefits. As on working here, you must report the results of your evaluations to the federal government.
Pension actuaries also help businesses develop other types of retirement plans, such as healthcare plans for retirees. In addition, they provide retirement planning advice to individuals.
8. BUDGET ANALYSTS
Budget analysts help public and private institutions organize their finances. They prepare budget reports and monitor institutional spending.
A budget analyst helps organizations and businesses organize and allocate their financial resources by developing and executing budgets for them. They monitor spending to remain within budget and estimate future spending requirements.
Upper management relies on the work of budget analysts to prepare data in order for them to make informed financial decisions.
Hence, budget analysts spend most of their time analyzing data, evaluating budget proposals, redistributing extra funds, and preparing annual reports. They work closely with project managers in developing the budget of the organizations while looking over proposals, checking for accuracy, completeness, and compliance.
In order to stay within the budget, budget analysts overseas spending throughout the year and figure out recommendations to executives within the organization. In a private firm, a budget analyst will review the budget and look for new ways to improve efficiency and increase profits. In a non-profit and government organization where profit is not a concern, budget analysts find the best way to allocate the funds amongst various programs or departments.
Economists study the production and distribution of resources, goods, and services by collecting and analyzing data, researching trends, and evaluating economic issues.
Thus, with an actuarial degree, you can build a career as an economist. Economists study market data and use actuarial models and statistical analysis to understand and explain economic trends, monitor market conditions to help corporations maximize their profits. Many economists work for various levels of government, examining issues related to employment, taxes, and interest rates. Many of the entry-level positions in government agencies are available to those with a bachelor’s degree in maths.
10. MATHEMATICIANS AND STATISTICIANS
Mathematicians and statisticians analyze data and apply mathematical and statistical techniques to help solve real-world problems in business, engineering, healthcare, or other fields. They are involved in collation, analysis, interpretation and presentation of statistics and quantitative data. Statisticians’ skills are required in numerous industries, ranging from healthcare to government and from finance to sport.
You’ll be tasked with managing, collecting and arranging data by means of surveys, experiments and contextual analysis. You may then be called upon to create reports and advise clients/colleagues on possible strategies, for example in order to make good financial decisions to further business goals. As a statistician, you’ll have expert analytical skills as well as solid communication and IT skills.
11. PERSONAL FINANCIAL ADVISORS
A financial advisor is often responsible for more than just executing trades in the market on behalf of their clients. Advisors use their knowledge and expertise to construct personalized financial plans that aim to achieve the financial goals of clients.
Personal financial advisors provide advice on investments.
These plans include not only investments but also savings, budget, insurance, mortgages and tax strategies.
Advisors further check in with their clients on a regular basis to re-evaluate their current situation and future goals and plan accordingly.
Hence, as a financial adviser, you’re not only a planning partner to your clients but also an educator.
Graduating with a Degree in Actuarial Science doesn’t automatically make you a qualified actuary! To be a certified actuary, you will need to further your studies by taking professional exams. This will give you an opportunity to advance in your chosen field.
I hope this article has effectively helped you in your decision and confusion as to what to do with an actuarial degree. Despite being a lucrative area of study, there’s no doubt that the skills you will learn during your degree will make you an invaluable asset to any company, regardless of the field. So, these are beautiful areas or fields you may desire to go for.