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Actuary
Actuaries use their knowledge of finance, statistics, and business to determine risk and develop policies to minimize financial loss. Actuaries try to determine the probability that certain events will occur. As a result, actuaries are necessary for insurance companies.
Actuaries gather and analyze data to determine the probability a death, disability, injury, sickness, or destruction of property will occur. Actuaries also use their skills to answer financial questions such as determining how much money needs to be invested in a pension fund to reach a specified amount, or they develop strategies for companies to maximize profits in lieu of risk. Actuaries develop cost effective pension plans and insurance policies.
Most actuaries work for insurance companies specializing in life, health, casualty, or property insurance. They use dynamic modeling techniques and develop probability tables, to determine the probability an event will produce a claim, and from the tables, they estimate what a company will pay if a claim is filed. For example, casualty and property actuaries use information such as a person’s age, sex, type of car they drive, and driving record, to determine accident probabilities. This information is used to set insurance premiums, so the company can meet its obligations. Life and health insurance actuaries develop long term care insurance and annuity polices.
Actuaries in the financial service sector determine corporate security offerings and oversee credit. Actuaries develop investment instruments to compete with other financial institutions. Pension actuaries evaluate a pension plans’ solvency covered by the Employee Retirement Income Security Act of 1974 (ERISA) and report to federal regulators. Actuaries employed by the federal government manage programs such as Medicare and Social Security.
Actuaries help develop company policies and explain to executives, shareholders, government officials, and the public complex technical details. They may be called to testify in public hearings and explain policy changes to customers. Actuaries also work with companies wanting to open branches in new locations and determine expected demand in the region.
Consulting actuaries contract their services to interested parties. Consulting actuaries provide the same sources as other actuaries. Some evaluate pension plans to determine whether investors will meet their goals, or some consult companies wanting to reduce their insurance costs by reducing risk. Consulting actuaries often testify in court about the potential income a person would expect to earn, usually after a person is killed or injured. Actuaries also work in reinsurance, an arrangement where insurance companies swap percentages of their liabilities with one another in exchange for premium percentages.
Work environment. Actuaries work in comfortable offices usually working 40 hour weeks. Consulting actuaries travel a lot, work long hours, and often experience periods of unemployment.
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