Actuarial science is all about applying the principles of mathematics, statistics and probability to real world challenges and situations.
What is an actuary?
Actuaries are highly numerate analysts of risk. Or as their professional body, the Institute and Faculty of Actuaries, explains, “Actuaries are experts in risk management. They use their mathematical skills to measure the probability and risk of future events and to predict their financial impact on a business and their clients.”
As the role of actuaries evolves that means using the very latest developments. That might include machine learning, data management systems and natural language processing, as well as mathematical and statistical modelling.
What do actuaries do?
An actuary’s job falls into three main areas.
They analyse past data and current behaviours. From that, they predict trends, model the future and calculate the probability of outcomes. Where information is scarce they research alternative sources and use creative problem-solving to understand the situation. Having good attention to detail is useful here, too.
Then they evaluate the financial risks based on those predictions. That needs an understanding of the financial principles and how the business works. So they’re using strategic thinking as well as sound judgement. They’re likely to be working closely with colleagues to do this, so good team-working skills are essential.
Finally they communicate their findings. Even though the ideas they deal with are complex, they must explain them clearly, in ways that non-specialists can understand and act on. That could be as written reports or face-to-face presentations. Good interpersonal and communication skills come to the fore at this point.
Where do actuaries work?
There are actuarial science jobs in every area of business, all around the world. You’ll find most actuaries working in banking and finance, life, health and general insurance, pensions and investment. And there are opportunities in non-financial areas. Government departments and the healthcare sector, amongst others, need to understand and manage risk.
Actuarial Sciences graduates are in demand for their deep understanding of maths, statistics, finance and accounting. You’ll find them working in business analytics, financial planning, insurance underwriting and risk management.
Becoming an actuary
Just like becoming a lawyer, accountants or doctor, becoming an actuary requires hard work, dedication and years of study. To become a qualified actuary you must complete accredited professional exams set by the IFoA.
You’ll also need to gain work-based skills, most often in an actuarial consultancy, insurance company or financial services business and complete practical assignments before taking further exams.
Everyone who loves and excels in maths is welcome and can enter through apprenticeships. Most enter the profession after studying a highly numerate degree. Some, such as the Bachelors and Master’s degrees offered at the Bayes Business School, give you exemptions from some of the exams.
The qualifications are rigorous and academically demanding, not least because you’ll be combining studying with work for some of the time. However actuaries can expect to be well-rewarded for their hard work. IFoA reports that graduate trainee salaries are some of the highest at around £31,000 a year and senior actuaries typically earn more than £100,000 a year.