Finance Actuaries what do they do

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Actuaries are well paid and often employed in the insurance industry. Their duties include working out potential implications of future insurance scenarios.

There are a number of areas where Actuaries commonly get involved with,

Estimate future pay outs

For example, an Actuary working in Life Insurance will use Mortality tables to work out the likelihood of a customer dying early and apolicy paying out before maturity. Or perhaps use crime figures, to estimate the pay out of home insurance if a customer's property is robbed, depending on the area a customer lives.

Calculate Premiums and Pricing Policies

When an insurance product is being developed, the Marketing Department will usually ask the Actuarial Department to help calculate the products' profitability. An Actuary would often respond that for a profitable product, the insurance premium would have to be a certain amount.

Calculating the impact of life changing events

Not only is pricing a key part of an Actuarial's job, but looking into the future and analysing different life changing scenarios are other areas Actuarial departments are asked to look at. For example, if their was a typhoon or a Tsunami, what would the effect be on home insurance payout. If a typhoid epidemic happended what would be the potential medical insurance loss. All these questions are important for insurance companies working in different insurance areas.

Regulations

Regulatory matters often affect an Actuaries workload. For example, in the UK, the Integrated Prudential Sourcebook ( IPSB PS04 - FSA policy paper), is currently being implemented and this especially affects With-Profits insurance funds. For Actuariues, this brings in a great deal of work to calculate the reserves thefirm has to hold to cover potential scenarios e.g. the stock market drops 20%. This is particularly important in the UK considering Equitable Life went bankrupt and left thousands of investors without a penny.

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