What Projects Does an Actuary Do?
So, you've read our article about what an actuary is. But what type of projects do they do in the real worls - and what's their role?
Being an actuary is, primarily, a data intensive job. They conduct in-depth analysis of reams and reams of data to help them to determine things like probability and timescales for certain eventualities occurring. Depending on the area in which the actuary works, they could be looking at data to help them work out things such as life expectancies or the likelihood that natural disasters will occur. The nature of risk management in the finance industry today means that they have to go so far as to look for once-in-a-blue-moon events too that could put the company’s finances at risk.
Take an actuary working in life insurance as an example. They could be looking at annual figures relating to death rates from a certain illness or figures from a set period, and comparing previously calculated expectations against actual figures. Other documents may also include things like medical reports. The information they deduce from this data can be used in further calculations in model programming which is used to spot trends and help provide guidance for insurance premium pricing.
Other tasks, which may typically be undertaken by actuarial assistants, include data cleansing. This is when the actuaries sniff out any data in their records which is corrupt (incomplete or duplicated for instance) and delete or correct as necessary so that the data the company works from is at its most accurate.
As a rule, actuaries also have to be very much up to speed on industry developments and their commercial awareness to help give them the best insight into how the data they study relates to the real world and the area they work in. So they’ll also be spending their time engaging with news and information solutions products, either as part of their morning routine and/or on lunch breaks and the commute to and from work.
More than maths…
But don’t be fooled into thinking that an actuary will simply be given a huge pile of data to work through and left in the corner to analyse and calculate away…their remit goes way beyond that – particularly in more senior roles.
Actuarial consultants won’t just be conducting data analysis and making the calculations – they also have to spend a lot of time in face-to-face meetings with their clients (who could be public sector or private sector organisations) explaining their findings and interpreting results for them to provide them with the best advice to develop and adapt their strategies.
Data analysis isn’t always restricted to the spreadsheets alone either. There may well be correspondence with medical professionals, construction professionals, lawyers or environmental experts for instance when they are working on a set of data.
In the Institute and Faculty of Actuaries (IFoA) there are a number of exams that students of the IFoA have to pass in order to become fully qualified – 15 in fact! As well as the exams there is a practical element called work based skills that those studying the qualification must complete. Work based skills will help you to understand the interaction between theory and practice when using actuarial techniques as well as the commercial and professional work environment. So those starting out their careers as actuarial assistants and actuarial trainees will be spending a lot of time studying each of the different practice areas in the early exams; moving onto your specialist practice area as you develop into your role.
Employers are keen to support their employees as much as possible through the three to six years most trainees spend completing the qualification – from remuneration (a salary), to study leave and paying for your study texts.