Most of us are not aware of what an actuary does and the importance of
the role in an insurance company. Undoubtedly, an actuarial job may seem
quite boring, but it is one of the most challenging and high-paying
jobs. If you are a math or statistics genius, then this may be the
perfect career for you. The actuary's main responsibility is
assessing/quantifying risk and developing means of mitigating risks.
Actuaries are largely known for their work in the insurance and pension
fields, where they design financially secure benefit programs to protect
customers. Let's take a look at the role, certification process and
career advancement of an actuary.
What is an Actuary?
Actuaries are the financial engineers of the insurance industry,
specializing in either life and health insurance or property and
casualty insurance. Basically, they formulate probability tables or
employ highly advanced dynamic modeling methods that predict the
probability that a potential event will generate a claim. From these
tables, they ascertain the amount of money needed for claims payouts.
Different actuaries have different roles and may work for insurance
companies or consulting firms, as well as in other businesses. They may
be involved with devising a new retirement program for a company or even
calculating the impact of laws banning car-cellphone use in automobile
losses and determining suitable rate discounts. For instance, in
property insurance, property and casualty actuaries compute the number
of claims likely to result from natural catastrophes. The actuaries take
into account the property's location, construction and several other
factors before determining the premium.
Similarly, the figures calculated by actuaries ensure that insurance
companies charge enough for premiums to cover predicted costs. In
addition, actuaries have to make sure that the premium charged for that
insurance is competitive with that charged by competing insurance
companies. (For more on insurance, see Extended Warranties: Should You
Take The Bait?)
Educational Background
If you are interested in becoming an actuary, you are required to earn
an undergraduate degree in statistics, mathematics, finance or actuarial
science. There are many schools and colleges that offer programs in
actuarial science.
Before becoming a fully qualified actuary, individuals must pass
examinations given by either the Society of Actuaries (SOA) or the
Casualty Actuarial Society (CAS) over a period of five to ten years.
Students are normally allowed to take the first two examinations while
they are still in college. After graduation, students often obtain jobs
as entry-level actuaries and work through the certification process
while simultaneously gaining some experience in the field. In return,
employers may pay the examination fees and provide extra study time to
their employees. As actuaries pass exams, they are compensated with pay
raises.
Post a Comment