Careers in actuarial science
Published on: Monday, July 12, 2021
By: K Krishnan
STUDENTS who have a passion for Mathematics often choose careers in Accounting or Auditing. Another career which you can consider is actuarial science. People who work in actuarial science are often called as Actuarist, Actuarial Analyst, Actuarial Associate, Actuarial Consultant, Consulting Actuarist, Health Actuarist, Pricing Actuarist, Pricing Analyst, Product Development Actuarist, Retirement Actuarist, etc.
What do they do?
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For instance, they may work in the insurance industry. If you have a life insurance policy, you’ll have to pay premiums regularly in exchange for the financial protection that the company is providing you. Someone calculates the amount of premium you pay. This person is often called the actuarist.
Actuarists build and use mathematical models based on statistical data to calculate the appropriate amount of premiums to charge policyholders.
This will require projections of how events will unfold in the future. In calculating the right amount of premiums, the actuary will need to project how large potential claims will be and when they will occur. Such projections are incorporated into the models to calculate the premium required.
At the same time, judgement, business acumen and experience are required to understand and logically interpret the results of the model before finally coming up with a solution to the problem.
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Calculation of premiums is only one of the many contributions of actuarist to insurance companies.
In addition to pricing decisions, actuarists are involved in designing insurance products, formulating investment strategies, determining reserves to be set up to meet future claims and recommending distribution of profits to shareholders after taking into account the insurance company’s future obligation to policyholders.
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Actuaries also estimate the amount of future claims by analysing past data or experience to assign probabilities to events such as death, sickness, disability, loss of property or even loss of business profits.
Actuaries provide solutions to today’s insurance and financial problems that properly take into account the financial impact of future events. With the actuaries’ expert knowledge in financial matters, they are often key advisors to the Board of Directors.
Actuarists also work in banks, investment companies, security and commodity broker firms, regulators and even lecturing in the education sector.
With such demand, there is an ever-increasing need for actuaries all around the world. In Malaysia, most actuaries are still working in the traditional life and non-life insurance industry.
However, based on trends worldwide and the rapid growth of the Malaysian financial industry, it is expected that more and more actuaries will venture into the non-traditional areas .
What passion do you need ?
Mathematics – Knowledge of arithmetic, algebra, geometry, calculus, statistics, and their applications.
Economics and Accounting – Knowledge of economic and accounting principles and practices, the financial markets, banking and the analysis and reporting of financial data.
English Language – Knowledge of the structure and content of the English language including the meaning and spelling of words, rules of composition, and grammar.
Law and Government – Knowledge of laws, legal codes, court procedures, precedents, government regulations, executive orders, agency rules, and the democratic political process.
Skills necessary for actuarists
Critical Thinking – Using logic and reasoning to identify the strengths and weaknesses of alternative solutions, conclusions or approaches to problems.
Judgment and Decision Making – Considering the relative costs and benefits of potential actions to choose the most appropriate one.
Mathematics – Using mathematics to solve problems.
Reading Comprehension – Understanding written sentences and paragraphs in work related documents.
What interest do you need ?
Mathematical Reasoning – The ability to choose the right mathematical methods or formulas to solve a problem.
Number Facility – The ability to add, subtract, multiply, or divide quickly and correctly.
Deductive Reasoning – The ability to apply general rules to specific problems to produce answers that make sense.
Inductive Reasoning – The ability to combine pieces of information to form general rules or conclusions .
How many qualified actuaries are there in Malaysia?
According to the Actuarial Society of Malaysia, there are only 164 qualified actuarists in Malaysia in 2020. The market for actuarists can perhaps still be considered unsaturated.
Where can I study actuarial science in Malaysia?
Those interested in studying Actuarial Science can check with the following universities for further information :-
INTI International University., UCSI University., Taylor’s University, Asia Pacific University of Technology & Innovation., Sunway University, Universiti Tunku Abdul Rahman, Universiti Malaya or Universiti Kebangsaan Malaysia.
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