Insurance ActuaryImagine getting a life insurance policy and that an insurance agent is right now in front of you over a coffee table and words like face value, premiums, double indemnity and other insurance jargons would naturally come up. These terms would be, of course, be explained in layman terms by the agent to his prospective client but what lies beneath those terms are complex mathematical and statistical equations. When an agent quotes a client a premium of $100 monthly for ten years with coverage of $50,000 annually would mean that risk factors like age, smoking habit, family history of diabetes and heart diseases, occupation, and address among other factors that would be a potential risk, would really mean that the risk factors mentioned were expressed in a tangible amount. Although right now, computer software are now being used by insurance companies and that all pertinent details are just inputted, these figures don’t just come out of nowhere but really is a product of complex mathematics and statistical methods before those figures where arrived at. To come up with an exact amount of how much should a client pay would be the responsibility of a company’s actuarial department. Of course,
software have now automated computing risks for insurance companies but still actuaries would always be the backbone of the insurance industry.
Computing risks for insurance companies are just one of the many ways an Actuary’s talent would be of use. Other industries like the automotive industry would find an actuary very useful. There have been times when a car maker would recall certain models of a car because they have found out that certain features might cause a car’s brake system to become ineffective when temperature gets to a certain level, for example. The president of the company would then call up their resident actuary and would ask if paying a class suit would be cheaper than recalling all the cars that have those features in question and repair them. Questions like these are not simple to answer because of so many factors to consider but an Actuary would not even break a sweat answering these types of questions.
Because the insurance industry or in particular an insurance company would be very much exposed to risks, and since they are in the business of minimizing risks, hard to answer questions similar to a car-recall-or- face-lawsuit question would be a regular brain exercise for them whereas other fields or industries would only require them to stretch out once in a while.
Another good example of an Actuary putting his talent to good use would be those launching a marketing campaign. An Actuary would be able to predict sales for the year given how many 30-second spot commercials will be shown in TV for the year.
Accreditation to become an Actuary depends on different countries. In the United States, the Society of Actuaries, for pension, health and life and the Casualty Actuarial Society, for properties, give out exams which is also the same for Australia. In Sweden and Denmark, becoming an Actuary would be enrolling to a four or five-year master's degree. According to a survey conducted by Wall Street Journal in 2009, Actuary was voted as the second best job.