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Misconceptions about actuarial science

In this blog, Chloe Hung, Amazon best-selling author, describes some of the common misconceptions of becoming an actuary.

Actuarial science is a field that is relatively unknown or misunderstood by many people. Hence, there are some common misconceptions about it. Here are a few common ones:

1. An actuary is someone who tells you when you are going to die

When I first came across actuarial science, someone told me that an actuary’s job is depressing because it’s all about predicting when people die. This is true to some extent because actuaries must predict this to devise an insurance plan that would best suit an individual’s needs and current condition. However, this is only a small part of what an actuary does. A more accurate statement to describe the role of actuaries is managing risks and solving problems.

2. All actuaries work in insurance companies

This is a huge misconception because actuaries work in many other sectors such as consulting, academia, banking, finance, investment, data analytics, business analytics and artificial intelligence, among others. The actuarial skill set is not just limited to the insurance sector as it’s applicable to many other industries. This misconception comes from the fact that traditional actuarial roles fall within the insurance industry.

3. Actuaries are extremely good at maths

Many people view actuaries as super mathematicians when it comes to numbers. Actuaries are good at maths but an actuary’s real strength lies in applying actuarial concepts to problem solving. Instead of viewing actuaries as maths geniuses, view them as good business people, risk managers and problem solvers. This is because actuaries have a broader skill set than the public commonly gives them credit for.

4. Actuarial science is all about maths

Many people perceive actuarial science as only being about maths. However, actuarial science is a combination of business concepts, problem solving and maths. Also, actuarial science focuses on the practical side of maths instead of the theoretical side. Practical maths is about applying mathematical concepts to solve problems, whereas theoretical maths focuses more on deriving and proving mathematical formulas.