Actuary

It's important that you have a love of maths to become an actuary and a degree in maths, statistics or economics can be useful

As an actuary, you'll use your mathematical skills to give trusted advice on the risks of future events. You will predict the financial impacts of these events for businesses and governments.

Using your risk management expertise, you'll be able to help create models and plan for the future in a rapidly changing world.

Types of actuary

The traditional fields in which actuaries work are:

• insurance
• pensions
• banking, finance and investment.

Within these fields there are emerging areas that include:

• health and care
• cyber security
• technology
• data science
• climate change.

Responsibilities

As an actuary, you'll need to:

• use mathematical modelling techniques and statistical concepts to determine probability and assess risks, for example, analysing pension scheme liabilities to price commercial insurance
• analyse statistical data in order to make calculations, for example, accident rates for particular groups of people
• be an effective communicator, to discuss and explain complex topics in a simple way
• develop new financial products
• prepare presentations, reports, valuations and quarterly updates
• monitor risk within trading positions in investment banking to ensure excessive risks are not taken during the fast pace of trading
• present reports, explaining their implications to managers and directors and advising on risk limitation
• advise on issues such as the selection of investment managers or the administration of pensions and benefits
• work with IT professionals to develop systems to ensure compliance with the requirements of regulatory bodies
• carry out relationship management, liaising with clients such as investment managers, financial directors and external stakeholders
• supervise staff
• work with mergers and acquisitions.

Salary

• Starting salaries for graduate actuaries are generally between £25,000 and £35,000.
• As a newly qualified actuarial analyst or consultant, you can expect to earn in the region of £40,000 to £55,000. Increments are usually paid for examination success.
• A senior actuarial analyst commonly earns in the region of £70,000, though this can be as high as £110,000. There is a range of salaries for experienced actuaries, but high financial rewards and excellent benefits packages are common.
• Salaries in excess of £200,000 are typical for chiefs, partners or principles.

Salaries vary according to location and are usually higher in London.

Income figures are intended as a guide only.

Working hours

You'll typically work around 40-hours per week.

You should expect to work overtime, but not necessarily at the weekends or in shifts. In traditional areas of employment, long hours are less likely for more junior staff, e.g. graduate trainees, as they will be devoting more time to studying for professional examinations.

Flexible and part-time work, as well as career breaks, can be negotiated - but this is usually dependent on the employer and your individual circumstances.

What to expect

• Most actuaries are employed by large financial institutions. Self-employment or freelance work are possible, but very unusual.
• Jobs are widely available in most large towns and cities in the UK, although London has the largest proportion of jobs.
• The Institute and Faculty of Actuaries (IFoA) is the chartered professional body for actuaries in the UK, and it has more than 32,000 members in over 119 countries.
• The actuarial profession is currently male-dominated with an approximate 75/25 split. The IFoA has initiatives in place to try to address all areas of diversity, equity and inclusion.
• Exams are an important part of an actuarial student's training, and study during this period may impact on your social and personal life.
• Depending on the employer there may be opportunities for travel regionally, within the UK or even abroad.

Qualifications

Although this area of work is open to all graduates with strong numerical skills, the following degree subjects may increase your chances:

• actuarial science or actuarial mathematics
• mathematics or statistics
• economics
• risk management
• maths-based subjects such as engineering, physics, chemistry.

The majority of UK entrants to the Institute and Faculty of Actuaries (IFoA) are graduates with a first- or second-class honours degree.

Employers typically look for a 2:1 or above, ideally in a numerate subject such as mathematics, statistics or economics. Eligibility of other qualifications, including those from outside the UK and Ireland, can be checked with the admissions team at the IFoA. Entry with an HND only is highly unlikely.

A degree, postgraduate diploma or MSc in actuarial science may give exemption from core technical subjects and allow qualification in a shorter time. It is also possible to get exemptions having studied a numerical degree such as mathematics or economics, provided modules include some focus on statistics and probability. You can search for postgraduate courses in actuarial science.

The Actuarial Statistics (CS1) and Actuarial Mathematics (CM1) exams are offered by the IFoA to non-members such as university students and people working in financial services. They provide a valuable grounding in mathematics and its simple applications and are a useful starting point for those considering a career as an actuary. These exams also go towards completing the professional qualification.

The IFoA has information about actuarial apprenticeships. School leaver apprenticeship roles will ask for an A-level in maths.

Skills

You'll need to have:

• a high level of numeracy
• good communication skills, including the ability to convey complex information to clients
• analytical, research and creative problem-solving skills
• IT skills
• the ability to write clear reports
• excellent people, interpersonal and listening skills
• a strong teamwork ethic
• self-discipline, determination and an appreciation of the demands of studying while working
• the ability to take responsibility
• sound judgement and a genuine interest in business
• commitment to an actuarial career.

Work experience

Although pre-entry experience is not a requirement, talking to people already in the job and acquiring some work experience will prove invaluable. Some companies offer work placements or internships for students interested in becoming actuaries. Internships may begin to be advertised as early as October or November for the following summer, so starting to look for opportunities early is advisable.

You could also network with professionals or enquire about work shadowing at careers events.

Find out more about the different kinds of work experience and internships that are available.

Employers

Most trainees begin their careers in the financial services industry, particularly in the traditional employment areas of insurance and pensions.

This means you will typically work at an insurance company or at a consultancy. At an insurance company, you're always working for one client - your employer. Generally, you'll work in one area before moving on to a different area. Insurance work includes life insurance, medical and health insurance and general, personal, home and motor insurance.

In a consultancy firm, the work will be more varied day to day. You'll probably work with a range of clients solving different problems. Financial consultancies deal with pensions, risk management, merger and acquisitions, corporate recovery, asset management and liability management.

Career opportunities vary depending on the type and size of employer.

The Government Actuary's Department (GAD) is an independent actuarial consultancy working within government. Their work includes advising public sector organisations in the UK and internationally on insurance-related issues, principally the regulation and supervision of insurance companies.

Look for job vacancies at:

• Actuary List
• Insurance Jobs
• The Actuary Jobs
• Actuarial Careers

The IFoA has a Find an Actuary page that you can use to find actuarial firms to keep an eye on their recruitment activities or to use for speculative applications.

Specialist recruitment agencies such as Oliver James, Emerald Group and Star Actuarial Futures handle vacancies and often advertise in the financial vacancy sections of the press or in professional journals.

Professional development

Most new students enter the profession by joining a company as an actuarial trainee or risk analyst at the same time as studying for professional exams. It is important to choose the area of work you are most interested in and then apply for suitable posts.

Student actuaries take exams at their own pace through self-study, as well as a mixture of distance learning courses and tutorials supplied by specialist providers such as the Actuarial Education Company (ActEd). Many employers provide support through mentoring, coaching, study leave and meeting the costs of learning materials. Subjects studied include statistical modelling, economics and financial actuarial maths. It is crucial for students to keep up with any changes in the sector as these can often affect the content of learning materials and exams.

Qualification as an associate member of the profession typically takes three to six years. To become an associate member, you must pass exams, complete a number of practical modules and gain a satisfactory level of work-based skills. The associate-level qualification is recognised internationally as meeting the minimum requirements to be an actuary and qualifies members to use the letters AIA or AFA.

If you wish to continue your studies to an advanced level or want to specialise in a particular actuarial field, you may take further specialist exams to qualify as a fellow, becoming an expert in areas such as investments, enterprise risk management, pensions or insurance.

Qualifying for fellowship can take between three and six years. Exemptions from some of the exams may be awarded if you have studied to an appropriate standard in a relevant degree, or have studied actuarial science at postgraduate level. Fellows use the letters FIA or FFA and are sought after as experts in their chosen field.

Career prospects

Once qualified, you can progress quite quickly to managerial positions with greater levels of responsibility for project work and team management, including mentoring new trainees.

An actuarial career offers a great deal of flexibility, and although you may choose a particular area of specialisation such as consultancy, investments, life assurance, general insurance, pensions or reinsurance, it's still possible to change areas later in your career. For instance, you may move from pension firms to work in investment banks or asset management firms, or into large corporations.

Enterprise risk management is a developing area offering opportunities for senior actuaries to progress to board-level positions, such as chief risk officer (CRO).

You may also choose to move into product development, marketing and senior sales roles where the complexity of the product and value of sale require a consultative sales approach. It is also possible to pursue particular areas of interest such as genetics, energy supply or climate change.

Other related areas of work open to experienced actuaries include:

• investment systems
• technical research
• commercial activities
• financial modelling
• software development
• valuation work
• general administration.