By Bunmi Ojo
What or who is an actuary?
An actuary is a business professional who analyzes the financial consequences of risk. Actuaries use mathematics, statistics, and financial theory to study uncertain future events, especially those of concern to insurance and pension programs. Actuaries could work for a wide range of companies, they include insurance companies, consulting firms, government, employee benefits departments of large corporations, hospitals, banks and investment firms, or, more generally, in businesses that need to manage financial risk. A career as an actuary is better described as a “business” career with a mathematical basis than as a “technical” mathematical career.
An actuary is not just for insurance.
Actuaries are the first professionals managing risk and modeling the financial impact based on the likelihood of future scenarios, having a deep understanding of the nature of risk and excel at putting a value on a risk, regardless of the industry.
While risk exists in all industries, no other industry handles the financial impact of risk more than the insurance industry. They are traditionally specialized in life, health, property, and casualty insurance. For the insurance industry, they develop, price, and manage insurance products. They also are involved in defining and creating pension and retirement plans for organizations. And as the population ages, they are finding roles as financial planning advisors.
But these skills and talents are transferable to any industry that requires risk modeling and management, including:
- Financial services, such as banking and investment management.
- Transportation, such as shipping and air travel.
- Energy, such as utilities, oil, and gas.
- Environment, on issues such as climate change.
Actuaries are experts in:
- Evaluating the likelihood of future events—using numbers, not crystal balls.
- Designing creative ways to reduce the likelihood of undesirable events.
- Decreasing the impact of undesirable events that do occur.
- Being key players in managing team of companies that deal with risk.
They are the leading professionals in finding ways to manage risk. It takes a combination of strong analytical skills, business knowledge, and understanding of human behaviour to manage today’s complex risks facing our society.
In a fast-changing world, with emerging risks and the need for more creative ways to tackle them, there are constant opportunities for personal and professional growth. An actuary is the analytical backbone of our society’s financial security programmes and they are the brains behind the financial safeguards in our personal lives, so we can go about our day without worrying too much about what the future may hold for us.