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Source: www.actuaries.org.uk
What is an actuary?What is an actuary?
Actuaries are experts in risk management. They use their mathematical skills to help
measure the probability and risk of future events. This information is useful to many
industries, including healthcare, pensions, insurance, banking and investments, where a
single decision can have a major financial impact.
Actuaries in the UK belong to the Institute and Faculty of Actuaries. It is a global profession
with internationally-recognised qualifications. It is also very highly regarded, in the way that
medicine and law are, and an actuarial career can be one of the most diverse, exciting and
rewarding in the world. In fact, due to the difficult exams and the expertise required, being an
actuary carries quite a reputation.
What skills do actuaries have?
People who work as actuaries come from all sorts of backgrounds, though clearly they share
a love of maths. Actuaries are problem solvers and strategic thinkers with a deep
understanding of financial systems. On the way to achieving a qualification, you'll develop
these and other key skills - analysing data, evaluating financial risks, communicating clearly -
through exams and work-based training.
Who should become an actuary?
A graduate typically with a 2:1 in a numerate subject (others may be suitable)
Loves logic and problem solving
Good communicator
Excellent business acumen
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What does an actuary do?
Out of our 23,950 members
22% work in Pensions
27% work in Life Insurance
12% work in General Insurance
5% work in Investment
2% work in Education
1% work in Health and Care
33% work in other sectors
What are the main industry sectors I could work in?
Actuaries' skills are in great demand throughout the financial sector, particularly in investment,
insurance and pensions. Actuaries are also increasingly employed in risk management for large
companies. However, actuarial consultancies are probably the biggest employers of actuaries in the
UK. There are many areaswhere actuaries work, including;
Consultancies - offering advice on issues such as acquisitions, mergers and financing capital
projects, and also on occupational pension schemes
Investment - involved in research and on the pricing and management of investments, particularly
in mitigating the risk of investments
Insurance - providing a service to companies which need a huge range of numerical information
investigated, analysed and explained; for example to create and price polices, or to ensure theyhave the money to cover claims
Pensions - designing and advising on company pension schemes, especially placing a value on
accumulated pension commitments.
What kind of projects do actuaries work on?
Every area of business is subject to risks so an actuarial career offers many options. A typical
business problem might involve analysing future financial events, especially when elements are
uncertain. But it could also involve understanding something like the weather: assessing when and
where devastating storms may hit and their associated costs, for investments or insurance.
Due to an actuary's skill the opportunities open to them are endless, they can even be employed in
the marketing and development of financial products.
What skills do I need?
Understanding how businesses operate is vital, but what really sets actuaries apart is their natural
mathematical, economic and statistical awareness, and their ability to apply this to real business
issues. The ability to communicate these difficult topics to non-specialists is also very important.
Find out more about theskillsthat you need at each stage of qualification.
Pensions, 22% LifeInsurance, 27
%
General
Insurance, 12
%
Investment, 5
%Education, 2%Health and
care, 1%
Others, 33%
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Can I work in other areas?
The skills that you will gain as an actuary will be invaluable to you in your future career, whether that
is as an actuary or other. Many actuaries change practice area and career paths. They move into
teaching, alternative risk roles, consultants, business operations managers, career advisers the list
is endless.
Can I work abroad?
Yes - With the skills you will gain with the UK Profession, they can take you anywhere in the world.
With mutual recognition agreements with some of the other actuarial professional bodies, once you
have qualified it may be easy to transfer to another professional body if your work takes you that way.
Skill sets of actuariesAssociates skill set
Associates of the Institute and Faculty of Actuaries use financial and statistical techniques to solve
real business problems, particularly those involving risk management. These business problems
typically involve analysing future financial events, especially when the amount of a future payment, or
the timing of when it is paid, is uncertain.
Associates will have sufficient technical understanding to solve all but the most demanding financial
and risk management problems in the following areas: pensions, life and general insurance,
investment, corporate finance, enterprise risk management, healthcare. They will also be able to
communicate fundamental actuarial ideas and arguments to others outside the profession in a way
that takes account of the needs of the audience.
Associates will have sufficient knowledge of the broad commercial and financial environment to
understand the immediate implications of their work for their client or employer, and will work to the
highest professional and ethical standards. However, the qualification, of itself, does not imply that
they have the depth of knowledge in a specialist subject possessed by a Fellow; nor that they are able
to identify a particular technical solution as optimal in the context of the wider business environment.
An Associate cannot undertake UK reserved actuarial roles but may be recognised as a fully qualified
actuary in some other jurisdictions (subject to local experience requirements).
Fellows skill set
Fellow of the Institute and Faculty of Actuaries uses financial and statistical techniques to solve real
business problems, particularly those involving risk management. These business problems typically
involve analysing future financial events, especially when the amount of a future payment, or the
timing of when it is paid, is uncertain.
Fellows will have a wide technical understanding of the following areas: pensions, life and general
insurance, investment, corporate finance, enterprise risk management, healthcare; and a deep
technical understanding of at least one of them. They will also be able to communicate fundamental
actuarial ideas and arguments to others outside the profession in a way that takes account of the
needs of the audience.
In a broad range of business and financial contexts they can analyse the needs of a client oremployer and identify an optimal solution. If the solution is within their own area of expertise they can
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provide comprehensive professional advice. Where they have identified the need for additional
expertise, they can interpret the advice of other experts and synthesize an appropriate solution.
Fellows will work to the highest professional and ethical standards and can fulfil all the UK statutory
responsibilities of an actuary and undertake actuarial reserved roles (subject to professional practising
certificate requirements) and will be recognised as a fully qualified actuary in most other jurisdictions(subject to local experience requirements).
Actuarial Quality Framework
TheActuarial Quality Framework published by the Financial Reporting Council aims to assist:
Actuaries - in seeking to provide high quality actuarial work for the benefit of users.
Actuaries' direct clients and employers, as well as their representatives and advisers - in
evaluating the quality of actuarial information and advice and making appropriate decisions based
on it.
All stakeholders including end-users and their representatives - in evaluating the effectiveness
with which actuarial quality is being promoted and achieved on their behalf.
Regulators, including professional bodies - in undertaking and reporting on the regulation of
actuaries and the entities they inform and advise.
Where do actuaries work?Of the 10,498 Fellows of the Profession, 72% are in the UK, 8% in the rest of Europe and
20% in the rest of the world. 35% of those Fellows work in Insurance, 37% work in
consultancy, 7% work in finance and investment and 4% work in the public sector andeducation, as well as other newer areas such as industry.
Insurance and Consultancy - what is the difference?
Working in an insurance company environment means that there is usually only one client;
your employer. A variety of work is available but tends to come more slowlyoften youll be
asked to work in one area for a period of about one year before moving on to the next
challenge, taking the experience you have gained with you.
The day to day work within consultancy firms tends to be more varied, as in any year you are
likely to work for a number of different clients solving different types of problems. This canbecome particularly challenging if you have a number of projects running in parallel and you
need to ensure that you meet and manage each of your clients expectations and deadlines.
This can give you an excellent opportunity to work with other people and see the running of
an organisation other than your own. You may also find yourself working on just part of a
project rather than seeing it all the way through from start to finish.
Consultancy
Actuarial consultancies are the biggest employers of actuaries in the UK. Consultancies will
offer a range of services to their clients, such as pensions, enterprise risk management,merger and acquisition advice, corporate recovery and financing capital projects. The
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Government Actuarys Department (GAD) provides advice to the Government via Royal
Commissions, as well as giving advice to other government departments and a wide range
of public sector bodies, including local authorities and the NHS.
Insurance industry
Life insurance
Life insurance companies provide life insurance, pensions and other financial services.
Actuaries are involved at all stages in the product development and in the pricing, risk
assessment and marketing of the products. With recent legislation leading to more private
healthcare provision, insurance companies are extending their range of products to include
medical insurance, critical illness and disability insurance.
General insurance
General insurance is a fast-growing area for actuaries, both within insurance companies andconsultancies as well as reinsurance and broking operations. General insurance includes
personal insurance, such as home and motor insurance, as well as insurance for large
commercial risks. Terrorist attacks, Caribbean windstorms and industrial diseases like
asbestosis are all examples of insurance liabilities where actuaries have been integrally
involved in estimating ultimate costs into an uncertain future.
Finance and investment
Investment management
Actuaries have been involved in the field of investment management for decades. Indeed, it
is probably true to say that more people see the word actuaries through the daily stock
exchange indices than through any other source. Actuaries are involved in buying and
selling assets, investment analysis and portfolio management. Many employers recognise
the skills that the training provides and have allowed actuaries to develop these skills as well
as others, such as the skills of financial economists.
Corporate finance
Although generally regarded as the province of the investment banker, actuaries can add
value in this area. An actuarys basic skills in forecasting and assessing risks are ideal for
estimating whether a capital project (e.g. for a new hospital or a transport infrastructure
project) is financially viable. Employers might include government departments,
management consultancies, or property companies.
Banking
Actuaries are becoming increasingly involved in banking. For example, some of the leading
insurance companies now have their own established banking operations, with actuaries
filling some of the senior executive positions for finance and risk. The leading retail banks
are also increasingly employing actuaries, as they recognise that the longer term
approaches advocated by actuaries can add value to their businesses. As the insurance and
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banking markets continue to converge, we can expect to see the demand for actuaries within
banking fields continue to grow.
Opportunities abroad
The UK qualification is highly valued throughout the world. Of the qualified members of theUK profession, 60% are UK based, with the remainder overseas. TheIFoA works with other
international actuarial bodies to arrange reciprocal recognition of the professional
qualifications between the different bodies.
Why become an actuary?There are many reasons people find becoming an actuary a satisfying and
stimulating career.
The variety of work
You can work in specialist areas of insurance, pensions, benefits, healthcare, investments
and banking, or for any large organisation where risk management plays an important role,
or for a consultancy advising on all sorts of different projects.
An influential role
The unique skills of actuaries are behind many high-level strategic decisions made by largecompanies and governments, and can have a positive impact on legislation, businesses and
individuals.
The rewards
Salaries and benefits packages are excellent from the beginning. In fact, it's one of the
highest paid professions.
Intellectual satisfaction
Actuaries are problem solvers, in tune with what's happening in business through theirinterpretation of statistical data and knowledge of social and economic systems.
International opportunities
Once you're qualified, actuarial skills can take you anywhere in the world.
High standards
Actuaries combine good business sense with safeguarding the public's financial interests,
upholding the highest professional standards.
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A good life balance
There is flexibility to balance professional commitments with personal interests.
How to become an actuaryIt takes on average between three and six years to qualify as an actuary, but the
rewards are well worth the effort. Most actuaries start their training once they
graduate, but the information below also applies to people entering from another
career.
Step 1 - Take an A-Level or a Higher in maths or an equivalent
You'll definitely need this to become an actuary. But it's worth noting that whatever you eventually
decide to do, taking maths will broaden your career options.
Step 2 - Get a good degree
For most actuarial employers, a 2.1 or better is essential. Any subject is acceptable, but employers
prefer candidates with numerate degrees such as actuarial science, maths, stats, economics,
engineering, chemistry or physics.
We have links withuniversiteswith accreditation or exemption agreements, do you want to find out
more?
Step 3 - Find a trainee position
Join an actuarial firm and develop your skills while you qualify. Your careers adviser can help, and
you can download aDirectory of actuarial employersoffering work experience or graduate trainee
positions, or visit the actuaries pages of theInside Careerswebsite. There is no age limit for joining
the profession. If you're interested in changing from another career or profession, we usually
recommend you undertake one or two of our examinations independently, to assess your skills. Your
experience in your current career may be valuable to an actuarial firm, and you may wish to contact
actuarial employers directly to discuss your potential.
Step 4 - Register as an actuarial student and gain your qualifications
To become an Associate or Fellow of the Institute and Faculty of Actuaries you must pass our
examinations, or be granted exemption from them, and also attain a satisfactory level of work-basedskills. This usually takes between three and six years. You study by distance learning, and many
employers offer support for study, some offering paid study leave during your training. In
theStudentssection of this website you can learn all about the qualifications you need to enter the
profession, how and when to apply for student membership, and you can download and complete an
application form.Our qualificationsshows you what exams you need in order to qualify as an
Associate or Fellow of the Profession. TheStudent Handbookis a helpful resource in outlining the
route through the exams we recommend.
Step 5 - Enjoy a job anywhere in the world
Within the actuarial profession there are many different and exciting career paths, and once you'requalified, your skills can take you anywhere. Some actuaries specialise in technical research, while
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others may focus more on commercial activities. Most go on to be practising specialists in one of the
traditional financial fields, with many becoming senior managers in insurance companies or firms of
consultants.
What can an actuary earn?Wherever you go in the world, you'll find the actuarial profession is one of the
highest paid.
Here is the basic salary you might expect to earn at different levels of responsibility.
Responsibility level Average basic salary ()
Chief actuary, senior partner 221,250+
Senior function head, practice director 134,343
Function head, practice head 110,747
Department manager, managing consultant 87,557
Section manager, senior consultant 81,239
Section leader, consultant 67,298
Senior actuary, junior consultant 59,836
Actuary 46,515
Student actuary 32,842