Actuaries of the 21st century require analytical skills, business knowledge, and an understanding of human behavior and information systems to design and manage programs that control risk. The classical function of actuaries is to calculate premiums and reserves for insurance policies covering various risks. The profession has consistently been ranked as one of the most desirable.
About Actuary in brief
An actuary is a business professional who deals with the measurement and management of risk and uncertainty. Actuaries of the 21st century require analytical skills, business knowledge, and an understanding of human behavior and information systems to design and manage programs that control risk. The actual steps needed to become an actuary are usually country-specific; however, almost all processes share a rigorous schooling or examination structure and take many years to complete. The profession has consistently been ranked as one of the most desirable. In various studies, being a actuary was ranked number one or two multiple times since 2010 and in the top 20 for most of the past decade. The concept of insurance dates to antiquity, but the concepts needed to scientifically measure and mitigate risks have their origins in the 17th century studies of probability and annuities. The classical function of actuaries is to calculate premiums and reserves for insurance policies covering various risks. On the life side, the analysis often involves quantifying how much a potential sum of money or a financial liability will be worth at different points in the future. In addition to these risks, social insurance programs are influenced by public opinion, politics, budget constraints, changing demographics, and other factors such as medical technology, inflation, and cost of living considerations. The amount of time that occurs before the loss event is important, as the insurer will not have to pay anything until after the event has occurred. Forecasting future costs also plays a role in determining future costs, especially in determining aggregate cost of aggregate products and aggregate liabilities.
Often, their work may relate to determining financial liabilities that have already occurred, called retrospective reinsurance, or the development or re-icing of new products. They are involved in the risk management of companies’ assets and liabilities in financial reporting. They must communicate complex concepts to clients who may not share their depth of knowledge or share their language of their work under a code of ethics that covers their communications and work out an out-growth code of practice. They use skills primarily in mathematics, particularly calculus-based probability and mathematical statistics, but also economics, computer science, finance, and business. They can also be involved in other areas of the financial services industry, such as analysing securities offerings or market research, such in analysing market research. ActUaries are also called upon for their expertise in enterprise risk management, including dynamic financial analysis, stress testing, the formulation of corporate risk policy, and the setting up and running of corporaterisk departments. The most common products they work on include life insurance, annuity insurance, short and long term disability insurance, health insurance, and health savings accounts, and long-term care insurance. They also deal with both physical and legal risks that affect people or their property, including auto insurance, homeowners insurance, commercial property insurance, workers’ compensation, malpractice insurance, marine insurance, terrorism insurance, and other types of liability insurance. The work of an actuaries can be found in the actuaries’ websites.