Where do actuaries work?
Of the 10,498 Fellows of the Profession, 72% are in the UK, 8% in the rest of Europe and 20% in the rest of the world. 35% of those Fellows work in Insurance, 37% work in consultancy, 7% work in finance and investment and 4% work in the public sector and education, as well as other newer areas such as industry.
Insurance and Consultancy - what is the difference?
Working in an insurance company environment means that there is usually only one client; your employer. A variety of work is available but tends to come more slowly – often you’ll be asked to work in one area for a period of about one year before moving on to the next challenge, taking the experience you have gained with you.
The day to day work within consultancy firms tends to be more varied, as in any year you are likely to work for a number of different clients solving different types of problems. This can become particularly challenging if you have a number of projects running in parallel and you need to ensure that you meet and manage each of your clients’ expectations and deadlines. This can give you an excellent opportunity to work with other people and see the running of an organisation other than your own. You may also find yourself working on just part of a project rather than seeing it all the way through from start to finish.
Actuarial consultancies are the biggest employers of actuaries in the UK. Consultancies will offer a range of services to their clients, such as pensions, enterprise risk management, merger and acquisition advice, corporate recovery and financing capital projects. The Government Actuary’s Department (GAD) provides advice to the Government via Royal Commissions, as well as giving advice to other government departments and a wide range of public sector bodies, including local authorities and the NHS.
Life insurance companies provide life insurance, pensions and other financial services. Actuaries are involved at all stages in the product development and in the pricing, risk assessment and marketing of the products. With recent legislation leading to more private healthcare provision, insurance companies are extending their range of products to include medical insurance, critical illness and disability insurance.
General insurance is a fast-growing area for actuaries, both within insurance companies and consultancies as well as reinsurance and broking operations. General insurance includes personal insurance, such as home and motor insurance, as well as insurance for large commercial risks. Terrorist attacks, Caribbean windstorms and industrial diseases like asbestosis are all examples of insurance liabilities where actuaries have been integrally involved in estimating ultimate costs into an uncertain future.
Finance and investment
Actuaries have been involved in the field of investment management for decades. Indeed, it is probably true to say that more people see the word ‘actuaries’ through the daily stock exchange indices than through any other source. Actuaries are involved in buying and selling assets, investment analysis and portfolio management. Many employers recognise the skills that the training provides and have allowed actuaries to develop these skills as well as others, such as the skills of financial economists.
Although generally regarded as the province of the investment banker, actuaries can add value in this area. An actuary’s basic skills in forecasting and assessing risks are ideal for estimating whether a capital project (e.g. for a new hospital or a transport infrastructure project) is financially viable. Employers might include government departments, management consultancies, or property companies.
Actuaries are becoming increasingly involved in banking. For example, some of the leading insurance companies now have their own established banking operations, with actuaries filling some of the senior executive positions for finance and risk. The leading retail banks are also increasingly employing actuaries, as they recognise that the longer term approaches advocated by actuaries can add value to their businesses. As the insurance and banking markets continue to converge, we can expect to see the demand for actuaries within banking fields continue to grow.
The UK qualification is highly valued throughout the world. Of the qualified members of the UK profession, 60% are UK based, with the remainder overseas. The Actuarial Profession works with other international actuarial bodies to arrange reciprocal recognition of the professional qualifications between the different bodies.