Actuarial Profession

Actuarial profession is among rare and prestigious professions. For example, about 20 000 qualified actuaries are registered in the US till now and the number annually grows by 1000. In England, where this profession has the longest traditions, there are about 9 000 actuaries.

Small number is greatly caused by the fact that one must go through quite a long process to get the qualification of actuary. For example, in Great Britain to get the status of a qualified actuary one must pass 15 exams and it approximately needs 5-7 years. International actuarial standard implies 8 exams. Besides, there are additional exams according to a specific country/market.

You will find actuaries among top world professions and mostly on the first places. Factors that make this profession the best cover: salary, social status, level of stress at work etc.

Actuaries have skills and knowledge that are necessary for performing financial analysis and long-term financial liability. Accordingly, actuaries work in fields where they have to estimate financial uncertainty. According to history, actuaries mainly worked in insurance companies and pension funds, though you may meet them in state insurance and social structures, consulting firms, banks and investment companies, universities and research centres, big corporations and others. Typical tasks actuaries have to perform are: to estimate insurance risks, according to which insurance tariffs are defined, technical reserves calculated, loss statistics analysed, part taken in corporate planning (for example in case of merging of companies), fair price of a new product established, financial results of catastrophes forecasted, investing programs analysed, etc.

During the last two decades, actuaries started their activities in new fields. For example, now you can meet them in financial modelling departments of investment banks, where traditionally mathematicians and physicians worked. In spite of small number, actuaries are quite influential in this field. We can mention David Lee as an example, who is the author of the most famous formula in the history of finances. The formula that is used in pricing of so called Collateralized Debt Obligations. At first, it was considered as a financial world greatest discovery, but then, since 2008, it has been supposed to be the main cause of the global financial crisis.

One more new field for actuaries is enterprise risk management. This is a new direction in risk management, which stands for general approach of risk management in companies. In companies, traditionally risk management was divided according to specifications of risks (e.g. operational and strategic risks were managed on different levels). According to this approach, technical skills and experience of actuaries is added to general management of risks. It should provide avoiding risks and better use of their positive potential.