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Actuary: Job description and activities

Job description

Actuaries evaluate, manage and advise on financial risks. They apply their knowledge of business and economics, together with their understanding of probability theory, statistics and investment theory, to provide strategic, commercial and financial advice.

Actuarial work can be diverse and ranges from highly technical roles developing complex financial products in investment banks or pensions and insurance companies to consultancy roles for those seeking a client-facing career.

Actuarial trainees may begin work as trainee pensions consultants or risk analysts while at the same time studying for professional exams. Senior actuaries can be found in consulting firms as partners, in large banks as chief risk officers or in board level positions in insurance companies and other financial services organisations.

Typical work activities

Actuaries apply financial and statistical theories to assess the likelihood of a particular event occurring, and the possible financial costs.

Typical work activities may include:

• analysing statistical data in order to calculate, for example, accident rates for particular groups of people;using mathematical modelling techniques and statistical concepts to determine probability and assess risks, such as changing weather patterns, to price commercial insurance;
• monitoring risk within trading positions in investment banking to ensure excessive risks are not taken during the fast pace of trading;
• presenting reports, explaining their implications to managers and directors, and advising on risk limitation;
• advising on issues such as the selection of investment managers or the administration of pensions and benefits;
• working with IT professionals to develop systems to ensure compliance with the requirements of regulatory bodies;
• supervising staff.

Specifically, actuaries in their day-to-day work may be responsible for the following:

• developing new financial products;
• conducting valuations of assets and liabilities;
• advising on investment strategies;
• assessing the profitability of an investments portfolio;
• calculating funding rates for pension schemes;
• analysing risks related to locations for catastrophe claims;
• measuring, monitoring and mitigating portfolio and enterprise risks;
• overseeing asset and liability modelling, product development and profit testing.

Actuaries may also be involved with the acceptance of proposals for new policies, with legal and taxation matters affecting life assurance, or with the investment of funds.

AGCAS

Written by Charlotte Haynes, Bournemouth University

Last updated:

December 2009

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