Contents
About the
actuarial profession
·
What is an actuary? What does an actuary do?
·
Professional
actuarial organisations in the World. The International Actuarial Association
·
Advantages
of being an actuary
Development
of the actuarial profession in Ukraine
About the actuarial profession
The word “actuary” derives from the Latin word “actuarius”,
who was the business manager of the Senate of Ancient Rome. Actuarial science
originated in
Actuaries are multi-skilled
strategic thinkers, trained in the theory and application of mathematics,
statistics, economics, probability and finance. They have been called financial
architects and social mathematicians, because their unique combination of
analytical and business skills is used to address a growing variety of
financial and social challenges worldwide.
What does an actuary
do?
Using
sophisticated analytical techniques, actuaries confidently make financial sense
of the short term as well as the distant future by identifying, projecting and
managing a spectrum of contingent and financial risks. In doing so, actuaries
provide decision-makers with valuable information with which to make long-term
strategic decisions, as well as providing practical solutions to problems
involving the possible consequences of future uncertain events.
The Actuary's
role in today's business is to:
·
analyze and manage risk,
·
construct financial modeling frameworks to fit particular circumstances,
·
communicate complex analysis in an easily understood form for senior
management,
·
make calculations which take account of changes in economic and other
conditions, and
·
provide financial advice.
Actuaries are
intricately involved in the increasingly competitive financial services
industry particularly in the areas of:
·
product pricing, targeting profitable segments of business,
·
advising on the appropriate value of reserves, which are often the
largest item on an insurer's balance sheet,
·
reinsurance program analysis,
·
capital management and investment strategy,
·
management information systems,
·
business forecasting,
·
company valuations, and
·
merger and acquisition advice.
The
profession has a statutory role responsible for the solvency of life insurance
companies in many countries. Actuarial involvement in the financial management
of general and health insurance companies is increasing.
Actuaries can
also play an important role in:
·
superannuation, where mathematical and
statistical modeling is used to determine the
financial aspects of superannuation plans such as making recommendations on the
levels of contributions and reviewing the adequacy of funding levels,
·
funds
management, providing advice on investment performance measurement and asset
allocation, as well as quantitative modeling,
·
stock broking
firms, where actuaries may work as analysts particularly for insurance and
gambling stocks, and
·
banking, where an actuary could analyze a mortgage portfolio to determine
likely rates of default, rates of payment of mortgages, future expenses and
suitable levels of mortgage guarantee insurance.
An actuary
designs solutions to problems that involve financial risk or future
uncertainty. This makes actuaries among the most influential professionals in
the financial world.
For example
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Part of job of an actuary is to try to predict what money will do when
it's invested in pensions, insurance, stock markets or other financial
services. Actuaries also have a legal and professional responsibility to ensure
consumers receive the benefits promised by insurance companies and company
pension schemes.
Actuaries solve problems to help protect your future. They combine their
business management role with responsibility for safeguarding the financial
interests of the public.
Solving problems is always satisfying. That's what actuaries do - they
use their intellectual skills to solve practical business problems. You'll also
find that the tougher the problem, the greater the satisfaction and pride you
get in devising an effective solution.
The world of business and finance
changes constantly. The effects of legislation, regulation, deregulation and
globalisation have created an environment that is increasingly complex.
Actuaries are uniquely qualified to make sense of it all. Actuaries routinely
apply statistics, probability, financial mathematics and investment theory to
solve business problems.
In fact, the work of actuaries is also a
science worthy of academic study in its own right and some actuaries work in
universities and in research.
More and more actuaries are becoming
managers. You'll need people skills to work with other professionals, manage
projects and colleagues and provide consultancy services. There are brilliant
opportunities for people who understand business and have the right skills to
make a difference.
Actuaries are in demand in many
different types of organization, but these are the main areas where you can
work:
- Life assurance. These companies provide pensions, life assurance and other financial
services to enable customers to safeguard their long-term financial security.
This includes maintaining an income after retirement or providing for
dependants if they die prematurely. Actuaries design, price and market these
products.
- General insurance. This is the fastest growing area
for actuaries. It includes personal insurance, such as home and motor insurance
as well as large commercial risks. The number and size of claims can be
affected by many different factors - the size of the house, postcode and
security in home insurance, for example. Actuaries combine their statistical
skills with knowledge of investment, accounting, law and business.
- Investment. All actuaries know about
investment but you can specialise in managing investments, monitoring
performance and advising on investment decisions. You could work for investment
banks, stockbrokers or the investment departments of large companies, as well
as in general business consultancy.
- Pensions.
Actuaries make recommendations on the adequacy of funding levels for
pension plans and provide statutory certifications to support pension and benefit
plan legislation in countries around the world.
Professional actuarial organisations
in the World.
The International Actuarial Association
The first professional association of actuaries was established in 1848 in
Founded in 1895, the International Actuarial Association (IAA) is a
worldwide association of professional actuarial associations and individual
actuaries.
The IAA exists to encourage the development of a global profession,
acknowledged as technically competent and professionally reliable, which will
ensure that the public interest is served.
Its objectives are to:
·
develop the role and reputation of the
profession
·
promote high standards of
professionalism to ensure that the public interest is served
·
advance the body of knowledge of
actuarial science
·
further the personal professional
development of actuaries
·
promote mutual esteem and respect
amongst actuaries
·
provide a discussion forum for actuaries
and actuarial associations
·
represent the profession to
international bodies
The IAA has 49 Full Member and 25 Associate Member Associations in 67
countries, which cover over 29,000 individuals who are full members of their
association.
The following is the list of the most developed actuarial organisations,
full members of the IAA
The Faculty and
The Society of Actuaries (
The Casualty Actuarial Society (
Groupe Consultatif Actuariel
(European Union)
Canadian
The
Individual membership in the IAA is also open to other qualified
actuaries who do not automatically qualify as members by virtue of membership
of a Full Member Association.
The IAA is a non-profit-making and non-political Non-Governmental
Organisation. It is on the Roster of the Economic and Social Council of the
United Nations Organisation (UNO) and on the Special List of the International
Labour Office (ILO).
There are two main systems of professional education for actuaries.
These are US Society of Actuaries education system (used in
For more details regarding actuarial organizations and professional
standards please refer to the IAA web site
How to become an actuary?
Actuaries
receive excellent training. Their hard-earned professional qualification and
achievement is recognized throughout the business world.
In order to be
qualified as an actuary you need to pass a series of professional exams of one
of the full members of the International Actuarial Association.
Now in
The examination
timetable is very flexible.
Exams are
held twice a year and you can sit as many as you like at one sitting. You can
even vary the order you take them. It takes about three to six years to
qualify.
Ukrainian
candidates also have a good opportunity to take exam training courses at the
UAS Actuarial Education and Reference Centre in Lviv.
For more
details concerning actuarial exams and actuarial exam training courses please
visit section "Programs" of this web site.
About the North
American professional actuarial qualification system: SOA/CAS examinations
SOA examinations. There are two levels of SOA qualification: Associateship and
Fellowship. To attain Associateship, the
candidate must successfully complete Courses 1–6 (listed below), the
Associateship Professionalism Course (APC), and must have the Application for
Admission as an Associate approved by the SOA Board of Governors:
SOA* Course
1: Mathematical
Foundations of Actuarial Science
SOA*
Course 2: Interest Theory, Economics and Finance
SOA Course 3:
Actuarial Models
SOA*
Course 4: Actuarial Modelling
SOA Course 5:
Application of Basic Actuarial Principles
SOA Course 6:
Finance and Investments
* - courses 1–4 are jointly administered
by the SOA and the CAS.
Fellowship of SOA is awarded to
candidates who have passed the examination requirements for the SOA
Associateship and in addition have successfully passed Course 7, Course 8 (where
candidates must choose one of six practice-specific examinations) and completed
the Fellowship Admissions Course
SOA Course 7: Applied
Actuarial Modelling
SOA Course 8F:
Advanced
Specialized Actuarial Practice - Finance
SOA Course 8G:
Advanced Specialized
Actuarial Practice - Health, Group Life, and Managed Care (health
& group life extension)
SOA Course 8M:
Advanced
Specialized Actuarial Practice - Health, Group Life, and Managed Care (managed
care extension)
SOA Course 8I:
Advanced
Specialized Actuarial Practice - Individual Insurance
SOA Course 8V:
Advanced
Specialized Actuarial Practice - Investments
SOA Course
8P&RU&RC: Advanced Specialized Actuarial Practice - Retirement
Benefits
CAS examinations. There are two levels of CAS qualification: Associateship and
Fellowship. To attain Associateship, the
candidate must successfully complete Courses 1–6 (listed below), the
Associateship Professionalism Course (APC), and must have the Application for
Admission as an Associate approved by the SOA Board of Governors:
CAS* Course
1: Mathematical
Foundations of Actuarial Science
CAS*
Course 2: Interest Theory, Economics and Finance
CAS Course 3:
Actuarial Models
CAS*
Course 4: Actuarial Modelling
CAS Course 5:
Introduction to Property and Casualty Insurance
and Ratemaking
CAS Course 6: Reserving, Insurance Accounting Principles, and
Reinsurance
CAS†
Course 7: Nation-Specific: Annual Statement,
Taxation, and Regulation -
* - courses 1, 2 and 4 are
jointly administered by the SOA, the CAS and the Canadian Institute of
Actuaries.
† - candidates must specify their
Fellowship of CAS is awarded to
candidates who have passed the examination requirements for the CAS
Associateship and in addition have successfully passed Course 8 and Course 9:
CAS Course 8: Investments and Financial Analysis
CAS Course 9: Advanced Ratemaking, Rate of Return, and Individual
Risk Rating Plans
About the
UK/European professional actuarial qualification system:
There are
three levels of qualification in the UK Institute of Actuaries. As soon as you
get a Diploma in Actuarial Techniques you can start working as an actuary in
the local and/or overseas companies. Associateship of the
In order to
obtain a Diploma in Actuarial Techniques
you will have to pass exams in the following nine subjects in the 100 series of
the professional examinations:
Subject 101: Statistical Modelling
Subject 102: Financial Mathematics
Subject 103: Stochastic Modelling
Subject 104: Survival Models
Subject 105: Actuarial Mathematics (Life Insurance)
Subject 106: Actuarial Mathematics (Non-Life Insurance)
Subject 107: Economics
Subject 108: Finance and Financial Reporting
Subject 109: Financial Economics
Associateship
of the Institute of Actuaries (AIA) is awarded to candidates who have gained
the Diploma in Actuarial Techniques, passed subject 201 Communications and the
four 300 series subjects, and attended an Associate professionalism course. The
subjects studied cover both the theoretical foundation for actuarial practice
and the principles behind actuarial applications work.
Four subjects
must be chosen from the following:
Subject 301: Investments and Asset Management
Subject 302: Life Insurance
Subject 303: General Insurance
Subject 304: Pensions and Other Benefits
Subject 305: Finance and Investment
The
Fellowship of the Institute of Actuaries (FIA) is the main qualification as an
actuary. It is awarded to candidates who have passed the examination
requirements for the Associateship and in addition have passed one actuarial
400 series subject at Fellowship level. Candidates have to demonstrate that
they can apply the theoretical framework in an established practical
country-specific applications area of actuarial work. A Fellowship
professionalism course must be attended within one year of qualification.
One subject
must be chosen from the following:
Subject 401:
Subject 402:
Subject 403:
Subject 404:
2005 will see the introduction of a new
structure for the actuarial examinations. For more information please visit:
Bulletin “The Ukrainian Actuary”, Spring
2004
The
description (syllabuses) of all professional actuarial exams can be downloaded
from the following web sites
www.lviv-actuaries.org/en_programs
Personal
requirements to the candidates
Skills
Actuaries are
multi-skilled strategic thinkers, trained as mathematicians, statisticians,
economists and financial experts who can assess risks to a business by
modelling the future, using a blend of history, expectations and judgement.
Actuaries
need to have:
·
the ability to present fundamental ideas and arguments to people outside
the profession,
·
the ability to analyse complex situations and information, to first
distil exactly what a problem is and to then determine a range of possible
solutions,
·
the ability to interpret results and draw conclusions,
·
decision-making ability,
·
mathematical ability, and
·
planning skills.
Knowledge
Actuaries need
to know about:
·
mathematics and statistics,
·
economics, accounting, finance and investments,
·
risks involved in business,
·
business management and law,
·
economic and social trends, and
·
computer software, including databases and
spreadsheets.
Some students
with their eyes on the global market are also studying languages in a bid to
tap into the international demand for actuaries that is developing. Others are
enhancing their actuarial studies with additional studies in science, business
law, economics, industrial relations, marketing or international business.
Personal qualities
In order to
come up with the best solutions to problems, actuaries need to be:
·
accurate,
·
methodical, and
·
careful.
Advantages of being an actuary
An actuarial career can offer you considerable rewards in terms of
intellectual challenge, professional status, job satisfaction and high
earnings. There are also significant financial incentives. It is no secret that
actuaries are very well paid. On qualification, a new (part-qualified) actuary
is likely to be on a salary of between £33,000 and £40,000 per year in the
There are also several websites that can be helpful in finding a work,
for example:
http://www.actuarial-jobs.com/
http://www.ipsgroup.co.uk/index.html
http://www.rollinssearch.com/home.htm
http://www.einsurancejobs.com/index.asp
Development of the actuarial profession
in Ukraine
This section will be updated soon.
© This web site is
maintained by the Lviv
Actuaries, 2003 – 2005