Experts say that actuarial science involves assessing financial risks and requires mathematical skills. Actuaries are a business profession, and their work includes continuously and accurately predicting the possibility of misfortune and its potential financial costs under uncertain circumstances.
What is actuarial science and why is it important?
Amy Timmons explained in an email: "Actuarial science uses mathematics to evaluate what will happen next." She is the vice president, senior consultant and actuary of Siegel Company, a consulting company with offices in the United States and Canada.
Stefanos Orfanos, clinical assistant professor and director of undergraduate actuarial program at J. Mack Robinson Business School of Georgia State University, gave a comprehensive definition of this term.
Orfanos wrote in the email: "Actuarial research is a systematic study of insurance data, that is, data related to economic losses caused by morbidity, mortality or adverse events. Actuaries analyze past trends and make reasonable assumptions without reliable data, thus establishing a model of what the future may look like. Then, it is used in the design and pricing of insurance products to meet our needs for financial stability and loss protection. "
Michael Clark, chairman of the consulting actuary meeting, described his research field as "risk pricing science" in an email. He wrote that actuarial science is especially suitable for the insurance industry because it can help insurance companies determine how much money they should reserve to ensure that effective insurance claims can be paid.
Clark explained: "In addition to insurance, actuarial science can also be used to quantify the cost of business risks, pension payments and any other potential future costs, which have certain uncertainties. He is the managing director and actuarial consultant of River and Mercantile Solutions (a division of River and Mercantile Group), an asset management, consulting and investment company.
Importance of actuaries
Actuaries say they play an important role in society, helping to ensure an adequate financial safety net to prevent financial disasters.
Ariel Weis, an actuary of Milliman Risk Management, Welfare and Technology Consulting, wrote in an email, "I really believe that the whole world needs insurance very much and needs to understand risks. For example, I want to know if something happens to me, can the people I love take care of themselves? I really need medical care, like all of us. Therefore, when I know directly or indirectly that I am solving problems that affect people and can eventually change people's lives, I will have a sense of accomplishment. "
Mary, senior vice president and consulting actuary in charge of Siegel retiree health business? Mary Kirby said: "Actuaries play a key role in ensuring the normal operation of the insurance system." She wrote in an email that they also helped the organizations they represented to establish and maintain "financial stability".
Kirby said: "There are many types of actuaries. You can choose the field you want to focus on: health, retirement, finance or insurance. "
How to become an actuary and make progress in the industry
According to the data of the Bureau of Labor Statistics, junior positions in actuarial industry usually require bachelor's degrees in analytical disciplines such as mathematics, statistics or actuarial science, while senior actuarial positions usually require formal certificates or licenses. In order to maintain the actuarial certificate or license, actuaries usually need to receive regular continuing education.
Weis emphasized that the training of actuarial profession is difficult and pointed out that people who become actuaries are expected to maintain their skills and expand their knowledge. He said: "Becoming an actuary is a long process, far exceeding the time to graduate from school. It takes hard work and dedication to pass professional examinations and courses to obtain professional designation, and at the same time work in the actuarial field to gain practical experience. After obtaining professional qualifications, actuaries should continue to work hard throughout their careers and obtain relevant career development. "
Ofanos explained that to be a qualified or qualified actuary, you need to pass "a series of challenging professional exams, which require dedication and talent." The type of certificate or license examination that actuaries need to prepare in the future will depend on the actuarial field they are concerned about, from accident insurance and property insurance to health insurance and life insurance, and then to pension. Accident Insurance Actuaries Association, Actuaries Association and Federal Joint Committee of Actuaries Registration all have their own examinations, and each organization requires people to pass the examinations before applying for certificates.
Diana Mulligan is the CEO of Guardian Life Insurance Company and the author of The Purpose of Employment: How Smart Companies Close the Skills Gap. It is suggested that aspiring actuaries study data science, machine learning and artificial intelligence, because these things are having a great impact on the actuarial industry.
She said: "Therefore, my advice to actuarial students is to strengthen their core education in corporate finance and enterprise risk management, and increase the training of technical skills such as coding or data analysis and soft skills such as collaboration or communication. It is also important to realize that getting a degree is not the end of education. Actuaries should be prepared for lifelong learning and training. With the development of new technology or insurance demand, actuaries should update the skills in the toolbox. "
What does an actuary do? Where do you work?
Actuaries usually work for insurance companies. They calculate premiums and set the rates paid by customers, but they also usually work for pension funds and retirement plans. They can help any for-profit or non-profit organization or any government agency to evaluate the potential financial cost of disasters and try to mitigate the possible losses caused by such events. They also often provide key information to decision makers to help them make difficult decisions.
Six-figure salaries are common. According to the Bureau of Labor Statistics, as of May 20 19, the average annual salary of American actuaries was $65,438+$008,350. The Bureau predicts that in 2028, the actuary employment rate will be 20% higher than that in 20 18, far higher than the average of 5% in all occupations.
This hot and profitable career requires talents in mathematics and statistics. Actuaries emphasize that it needs to understand data and identify patterns in numbers, so people working in this field need strong quantitative skills, attention to detail and meticulous methods.
Timmons said, "You need to love math and numbers, which is the core of becoming an actuary. We can talk about everything else. There are actuarial positions for introverts, extroverts, people who like to talk and work, people who like to travel, people who like to stay at home, and people who only like to deal with numbers. "
Kirby suggested that an aspiring actuary should love learning and research, and he or she should also have a strong professional ethics. She said: "To be an actuary, you need to take many exams, so self-discipline and diligence are obviously important qualities. It's not just an exam. It is important to be able to think creatively, propose solutions to complex problems and communicate with different stakeholders. "
Wes noticed that teamwork was essential. "As actuaries, we rarely find ourselves working alone in a project. Many of the problems we are trying to solve are so huge and complicated that they inevitably require a large number of people to solve them. "
Weis said: "Because actuaries usually work with individuals who are not actuaries, they need to be able to explain their intuitive concepts to those who lack technical expertise because they have received technical training. Therefore, it is a very valuable skill to understand technical concepts from the actuarial point of view and explain them to others in a way that others understand. It is also important to have the ability to listen and understand what others ask us to do, so that we can provide answers related to their questions. "
Weis believes that the actuarial industry needs to have certain personality characteristics, such as curiosity and cooperation spirit. Such as curiosity and cooperative spirit. He said that strict ethical principles are mandatory. "Personally, actuaries value integrity and honesty, so we hope that people who enter this field can embody these principles and take ownership and responsibility for their work and behavior."
Orfanos believes that although the standardized examination part of actuarial major may make people feel pressure, other than that, there is not much pressure on this profession. He said that actuaries who have completed the examination can benefit from a fairly relaxed working environment. He said: "Most actuaries live a comfortable life with little work or financial pressure. At first, preparing for the exam will take up a lot of time, and your social life will also be affected. When you finish your major, you will have time and money to travel or pursue your other interests. "