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  Contents

 

About the actuarial profession

·         What is an actuary? What does an actuary do?

·         Professional actuarial organisations in the World. The International Actuarial Association

·         How to become an actuary?

·         Advantages of being an actuary

 

Development of the actuarial profession in Ukraine

 

 

 

 

 

 

 

 

 

 


About the actuarial profession

 

 

What is an actuary?

 

The word “actuary” derives from the Latin word actuarius, who was the business manager of the Senate of Ancient Rome. Actuarial science originated in England in the late decades of the 18th century and because of the technical nature of the business, the first actuaries were mathematicians. The word “actuary” was first applied to a mathematician of an insurance company in 1775 in the Equitable Life Assurance Society of London (the United Kingdom). As time has gone on, actuaries became more and more important in general (property/casualty) insurance, health care, social security, investment, banking, corporate finance and financial engineering.

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 "Actuary" is Rated One of the Best Jobs in USA! The occupations are ranked on the basis of six key criteria: environment, income, employment outlook, physical demands, security and stress. "Actuary" has never been rated lower than fourth.

 

 

The Ten Best Jobs in USA:

1. Biologist

2. Actuary

3. Financial planner

4. Computer-systems analyst

5. Accountant

6. Software engineer

7. Meteorologist

8. Paralegal assistant

9. Statistician

10. Astronomer

 

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.

 

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Professional actuarial organisations in the World.

The International Actuarial Association

 

The first professional association of actuaries was established in 1848 in London and at the turn of the century, 10 associations were in existence.

 

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 Institute of Actuaries (UK)

The Society of Actuaries (USA)

The Casualty Actuarial Society (USA)

Groupe Consultatif Actuariel (European Union)

Canadian Institute of Actuaries (Canada)

The Institute of Actuaries of Australia

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 North America) and UK Institute of Actuaries education system (used by most countries in the World). Both of them form the basis of the IAA standards of the actuarial professional education.

                                                           

For more details regarding actuarial organizations and professional standards please refer to the IAA web site

 

http://www.actuaries.org

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


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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 Ukraine there is such opportunity to sit professional actuarial examinations of the UK Institute of Actuaries (UK IoA), the US Society of Actuaries (SOA) and the US Casualty Actuarial Society (CAS), which are the most prestigious professional bodies of the IAA. The UK IoA Examination Centre has been established in Kiev in 2002 on the basis of the Ukrainian Actuarial Society and Taras Shevchenko National University.  Ukrainian candidates also have opportunities to sit their SOA/CAS examinations in Lviv at the UAS Actuarial Education and Reference Centre of the National University “Lviv Polytechnic”

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 - Canada or U.S.

 

* - courses 1, 2 and 4 are jointly administered by the SOA, the CAS and the Canadian Institute of Actuaries.

 

- candidates must specify their U.S. or Canadian specialty.

 

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: UK IoA examinations

 

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 Institute of Actuaries gives you higher salary and higher professional qualification. But the Fellowship of the Institute of Actuaries means the highest salary, the highest position in the company and a lot of respect.

 

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: UK Fellowship Investment and Asset Management

Subject 402: UK Fellowship Life Insurance

Subject 403: UK Fellowship General Insurance

Subject 404: UK Fellowship Pensions

 

2005 will see the introduction of a new structure for the actuarial examinations. For more information please visit:

 

                                                Institute of Actuaries, UK

                                                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

www.actuaries.org.uk

www.casact.org

www.soa.org

 

 

 

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.

 

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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 UK and between 60, 000 USD and 100,000 USD in North America. Thereafter, this rapid salary progression can continue according to the exams passed, qualification and experience obtained. If you would like to know more about salary of an actuary please visit website

 

http://www.dwsimpson.com/

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

 

 

 

 

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Development of the actuarial profession in Ukraine

 

 

This section will be updated soon.

 

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