By Hana Jali, Senior Actuarial Analyst at Hiscox (BSc Economics 2017)
I joined Royal Holloway back in 2014 to study Economics. Since graduating, I undertook an internship programme which enabled me to secure a permanent position with the same company.
What is an Actuary?
The Actuarial profession is not as well known compared to say Accountancy or Banking but is nonetheless a very highly respected career choice. This is mainly because you typically only find Actuaries working in the Insurance industry. There are 3 main areas within the Actuarial profession that an Actuary would work in and these are: pricing, reserving, capital management and risk.
- Reserving : Focuses on setting aside sufficient funds to ensure that the insurance company can meet future obligations, such as paying out claims or pensions. This involves rigorous data analysis, model building, and regulatory compliance.
- Pricing : Involves determining appropriate premium rates for insurance products that are both competitive and sufficient to cover future claims and expenses. This requires risk assessment, competitive analysis, and collaboration with product development teams.
- Capital management and risk : Responsible on managing and optimising the company’s financial resources and risk exposure. This involves risk assessment, regulatory compliance, stress testing, and investment strategy.
Each of these areas requires specialised skills and knowledge, but all are integral to the financial stability and success of an insurance company. Actuaries typically choose to specialise in one of these area, but a broad understanding of all three is beneficial for a well-rounded Actuarial career. If you have a passion for numbers and problem-solving, the actuarial career path will be a satisfying and rewarding one.
Key Functions and Skills of an Actuary
A day in the life of an Actuary is dynamic, challenging and highly analytical. Actuaries identify and assess potential risks that could impact a company’s financial stability. This includes risks related to life expectancy, health issues, natural disasters, economic fluctuations and more. Using sophisticated mathematical models, Actuaries predict future events by estimating the likelihood occurrence of uncertain events and their financial implications. The reserves calculated by the Actuaries makes up a significant proportion of an insurance companies liabilities on the financial balance sheet, and is why this area requires auditing from external parties.
Actuaries also need to ensure that their organisation complies with relevant laws and regulation. They often prepare reports required by regulatory authorities and make sure financial practices meet legal standards. It is important to have a deep understanding of financial markets and testing any assumptions made to understand how different economic or operation scenarios could impact the company’s financial position. . While having the technical capability to carry out the job is important, an Actuary also needs to the ability to explain the complex concepts to non-specialists. It’s no good running mathematical models if you can’t explain the ‘So What..?’ to help drive business decisions.
What advice would you give to future students who are keen to work in your industry? What do you think you wish you had known?
- Develop strong analytical skills : Actuarial work is data intensive and requires a high level of analytical thinking. Excel and statistical software proficiency are crucial, so invest time in honing these skills.
- Embrace lifelong learning : The actuarial profession is one of continuous education. Be prepared to take multiple exams in order to qualify, which will impact your work-life balance, and engage in ongoing professional development throughout your career.
- Network Actively: Networking can open doors to job opportunities and provide mentorship. Join student actuarial societies, attend conferences, and participate in professional forums.
Are there any good websites or resources you can share that you found helpful when job-hunting and applying?
Industry and Faculty of Actuaries
Actuarial Education Company Home Page