What does an actuary do? Exploring the daily responsibilities of actuaries

The roles and responsibilities of actuarial work are diverse and challenging, but this can be a hugely rewarding career path. By learning more about the practical day-to-day realities of working as an actuary, you will be better prepared to take the first steps in your own actuarial career.

The actuarial profession is a cornerstone of the financial services industry, yet for many who are just getting started with their actuarial career, they may not understand exactly what they can expect to be called upon to do when working as an actuary.

This is partly because the responsibilities of an actuary can be extremely varied, in terms of the range of tasks they will be asked to handle on a daily basis, but also in terms of the different ways of working that exist across the various actuarial specialisms.

In this blog post, we will share our actuarial recruitment expertise to shed light on what the role of an actuary looks like in day-to-day terms, and examine the different types of actuarial roles to help identify the key skills that will help you to succeed in this field.

What is an actuary?

In the simplest terms, actuaries are business professionals who are responsible for dealing with the financial impact of risk and uncertainty. Using their knowledge of mathematics, statistics and financial theory, actuaries are relied upon to analyse complex data to evaluate the likelihood of certain events - such as natural disasters, accidents or mortality - that might affect a financial plan. They are also responsible for designing and pricing insurance policies, pension plans and other financial strategies to ensure that these are financially sound and fully compliant with the relevant regulations.

As such, actuaries are often considered the backbone of financial security in the insurance and pension industries. They use their unique skill set to quantify and manage risk, ensuring that companies can meet their financial obligations and individuals can plan for their future with confidence.

Actuaries also work in a variety of other fields, including health insurance, property and casualty insurance, enterprise risk management, and financial planning.

In addition to their technical skills, actuaries are also called upon to demonstrate the highest standards of professional integrity. They are bound by a strict code of conduct in all of their dealings, reflecting the fact that actuaries often have access to sensitive personal data, meaning their work can have a significant impact on the lives and financial wellbeing of individuals, as well as organisations.

What are the core responsibilities of an actuary?

With these requirements in mind, the core responsibilities of actuarial work can be described as follows:

• Risk management - using their analytical skills and understanding of actuarial science, actuaries will work to predict future events and assess their financial implications. This involves creating statistical models to predict the probability of a risk occurring, and the potential financial loss that this will create.
• Calculating the cost of risk - for example, in the insurance industry, actuaries determine the price of insurance policies by assessing the likelihood of a claim and the potential pay-out. They use a variety of factors to make these calculations, including statistical data, economic trends, and specific details about the policyholder.
• Developing insurance policies and pension plans - actuaries calculate premiums, ensuring they are sufficient to cover potential claims but are also competitive in the market. They also ensure that pension plans are financially viable in the long term, by predicting how much money will be paid out in benefits over time, and ensuring that the plan has enough funds to meet these obligations.
• Supporting strategic decision-making - actuaries are called upon to advise on investment strategies, mergers and acquisitions, and other major business decisions. This requires a deep understanding of financial markets and economic trends, as well as the ability to communicate complex information clearly and effectively.
• Ensuring compliance - actuaries play a central role in helping their employers to meet all of the relevant regulatory standards, ensuring that their calculations and methods meet the requirements set by regulatory bodies. This involves staying up-to-date with changes in regulations and adapting their methods accordingly.

What are the different types of actuarial roles?

The actuarial field is diverse, with several distinct roles each carrying unique responsibilities. As such, the type of work an actuary does can vary significantly depending on their specific role and the type of organisation they work for. Some of the most common types of actuarial role include:

• Insurance actuaries - these professionals typically work for insurance companies, and will focus on designing policies and setting premium rates, using a combination of statistical models and market analysis. Some actuaries will work with individual customers to advise them on which product to buy, while others will work as pricing actuaries, collaborating with product development teams at the insurance company to develop a competitive pricing strategy for new and existing products.
• Pension actuaries - Pension actuaries work with pension plans, calculating the funds required to ensure that all members receive their promised benefits. They need to consider various factors such as the age of the pension plan members, their life expectancy, and the expected returns on the pension fund's investments.
• Consulting actuaries - Consulting actuaries work for consultancy firms, providing advice to clients on a range of issues. This could include advising on mergers and acquisitions, financial forecasting, and risk management. The role of an actuarial consultant is often more varied than that of insurance or pension actuaries, as consulting actuaries tend to work with a number of clients on a range of different projects.
• Risk actuaries - These actuaries help businesses identify and manage potential risks that could affect their operations. They may work in a variety of industries and their role often involves strategic planning and decision-making.

Most actuaries will choose their particular specialism depending on their personal skill sets, allowing them to look for roles that will play to their strengths, interests and career ambitions.

What does a typical day look like for actuaries?

Although their choice of specialism will have an impact on how actuaries work on a daily basis, there are also various key responsibilities and everyday tasks that most actuaries will be familiar with, no matter what sector they work in.

For an entry-level Actuary or Actuarial Analyst, the day will typically start by checking emails and catching up on any industry news. They need to stay informed about the latest developments in the financial and insurance sectors, as these can impact their work.

The bulk of their day will then be spent analysing data and building statistical models, using software like Excel or specialised actuarial software, such as Prophet or Emblem. They might be tasked with analysing risk factors for insurance policies, calculating potential pay-outs for pension plans, or forecasting financial trends.

Throughout the day, these entry-level Actuaries will also be asked to work closely with more experienced colleagues, who provide guidance and support. They may attend meetings with other departments to discuss ongoing projects or potential risks. Towards the end of the day, they might prepare reports summarising their findings and recommendations.

For a more experienced Actuarial Manager, their role within the organisation is likely to be more strategic, with a focus on regular meetings with other managers to discuss organisational decisions, or with clients to present findings and recommendations.

While they still need to have a strong understanding of data analysis and statistical modelling, they often delegate these tasks to their team, who will summarise their findings and bring the managers up to speed ahead of relevant meetings. As such, those in managerial positions spend more time reviewing the work of their team, ensuring the accuracy of calculations and the validity of models. They may also be involved in higher-level tasks such as planning, budgeting and decision-making.

Actuarial Managers also play a key role in communication within the organisation. They need to be able to explain complex actuarial concepts to non-specialists, such as senior management or clients. This requires strong communication and presentation skills.

As such, as you progress through your actuarial career, you should expect the scope and focus of your role to evolve over time, which in turn will change how your day-to-day responsibilities are structured. Learning to manage this transition as part of a healthy work-life balance will be a key aspect of your career development.

What skills are required for actuarial work?

Actuaries require a unique blend of skills and qualifications to excel in their roles:

Qualifications:

• Educational background - most actuaries have a degree in a field like mathematics, statistics, economics or actuarial science.
• Professional qualifications - to become a fully qualified actuary, individuals need to pass a series of professional actuarial exams. In the UK, these are administered by the Institute and Faculty of Actuaries, the chartered professional body responsible for the sector.

Technical skills:

• Mathematical and statistical proficiency - actuaries need a strong foundation in mathematics and statistics, as these are the tools they use to analyse risk and uncertainty.
• Computer literacy - proficiency in using software to analyse data and build models is essential. This includes general software like Excel and specialised actuarial software.
• Problem-solving skills - actuaries need to be able to apply their mathematical knowledge to solve real-world problems. This involves creating models, making calculations and interpreting the results.

Soft skills:

• Communication skills - actuaries often need to explain complex concepts to non-specialists. They need to be able to communicate clearly and effectively, both in writing and verbally.
• Teamwork - actuaries often work as part of a team, collaborating with professionals from other disciplines. They need to be able to work effectively with others and contribute to a positive team environment.
• Attention to detail - actuaries need to have a keen eye for detail. They need to ensure that their calculations are accurate and that they consider all relevant factors.

Business and industry knowledge:

• Understanding of business and economics - actuaries need to understand how businesses operate and how economic factors can affect risk. This involves understanding financial markets, economic trends and business strategies.
• Industry knowledge - actuaries need to be familiar with the specific industry they work in, whether it's insurance, pensions, or another field. This involves understanding the products and services in their industry, the regulatory environment and the key risk factors.

The range of skills required for actuarial roles reflects the fact that this is a rewarding but challenging career path - one that plays a crucial role in the worlds of business, insurance, finance and investment banking, among many other sectors. Those that work in the industry will need to take a structured but flexible approach to their day-to-day planning, in order to ensure they are meeting all of the expectations placed upon them by their employers and their clients.

By getting to grips with these responsibilities, experienced actuaries will be able to enjoy all of the professional and personal fulfilment that these roles can provide.

Find out more

If you are considering taking up an actuarial role for the first time, or looking to advance your existing career, the journey begins with finding the right opportunity.

This is where Sellick Partnership comes in. As specialists in actuarial recruitment, we have the expertise and connections to help you navigate the job market. Our team of dedicated Consultants specialise in connecting talented actuarial professionals with top employers across various industries. By getting in touch, you can explore how we can assist you on your actuarial journey.

You can also take a look at our actuarial recruitment services hub to find out more.