Actuarial Profession

Members of the actuarial profession provide risk management expertise to insurance companies, consultancies, government, regulatory bodies and a range of investment and banking institutions. The role of the actuary is to try to reduce financial uncertainty to a manageable level, and therefore improve the predictability of future financial performance. Actuarial expertise is an essential ingredient in managing the solvency of insurance companies and pension schemes globally.

Actuaries use probability theory, statistical analysis and financial mathematics to understand the past and to help predict future financial scenarios. Actuaries also need to have excellent communication skills both to discuss complex concepts and to explain findings and recommendations to non-specialists.

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Types of employers

To understand the range of jobs in this sector, it is useful to first look at the types of institutions that employ actuaries. Further details are below, but the headlines are:

  • Insurance companies and consultancies are the largest employers of actuaries, with close to 75% of the profession working for them.
  • Life insurance and pensions are the largest practice areas that actuaries work in, accounting for nearly 50% of the profession.

Insurance companies

These companies sell a range of insurance products to individuals and to businesses to help them manage a range of risks. Most insurance companies sell all three types of insurance: life, non-life (general) and health. As an actuary working for this type of company you will normally work with one of the specific insurance types as the skills and knowledge required to manage different products are specialised. You could find yourself in either a Life & Health Insurance team or the Non-life (General) Insurance team. Within each of these teams there is a range of work that actuaries do and the tasks are split broadly into Financial Reporting/Reserving, Capital Management and Pricing. Each of these areas requires deep technical knowledge and an understanding of the regulatory rules that govern insurance companies. As a result, it is common for actuaries to specialise further in one of these areas, though moving from one area to the other is common.

Reinsurance companies

Reinsurance companies act to insure the risks of insurance companies. Rather than dealing with individuals, reinsurers normally work with large portfolios of life/non-life/health insurance liabilities. They are organised in much the same way that insurance companies are and the types of actuarial jobs are split in a similar fashion (reporting/capital/pricing).

Consultancies

There are very few “pure” actuarial consultancies, i.e. consultancies that offer only actuarial services. It is more common to see larger financial service consultancies that have specialised actuarial teams as part of their service offering. For example, the Big 4 accounting firms (see our briefing on Accountancy) all have specialised actuarial teams offering life insurance, non-life insurance, pensions and investment consulting services. There are also many smaller consultancies in the sector.

These consultancies provide services to a range of corporate clients which are typically insurance companies, pension schemes and investment banks. The type of work you do within a consultancy will depend on the area of specialism you have chosen to pursue, i.e. pension actuaries will work in pensions consulting teams whilst life insurance actuaries will work in life insurance consulting teams.

Investment & finance companies

There is a diverse range of institutions in this sector offering many types of products and services (see out briefing on Banking and Investment). Traditionally it has not been the domain of actuaries, but in recent decades the actuarial skill set has been recognised as valuable when making investment decisions. The types of employers include fund managers, investment banks, hedge funds and risk management firms. Actuaries work in middle-office and front-office teams and tend to do jobs that draw on their insurance and pensions expertise as well as their strong quantitative abilities.

Rating agencies

There have been a growing number of actuaries working for ratings agencies in the last decade. As ratings agencies scrutinise the operations and financial positions of insurance companies, the actuarial skill-set has become very valuable in picking apart the rather sophisticated balance sheets of insurance companies. Actuaries working in rating agencies need strong investigative skills and also need to be able to apply their knowledge to a range of companies.

Regulatory bodies

The role of the actuary in both the pensions and insurance sectors is a regulatory requirement. In much the same way that companies must publish their financial accounts each year and have them signed off by an auditor, insurance companies and pension schemes must also submit various actuarial reports that show their on-going financial condition. For regulatory bodies to manage the operations of insurance companies in a prudent manner, they require actuaries to help them develop their policies and also to ensure the insurance sector is working within the guidelines they set out. The Financial Services Authority (FSA) is the main UK regulator for insurance whilst the Government Actuaries Department (GAD) informs pensions-related policy.

Government

As mentioned above the UK civil service includes the Government Actuary’s Department which recruits both trainees and qualified actuaries. The GAD advises government on significant policy initiatives where understanding and quantifying financial risks are critical elements of good decision-making. In particular it provides advice on pensions, student loans and risk-pooling arrangements such as those for clinical negligence claims, although it also undertakes a range of work across insurance and investment sectors (in the UK and internationally).

Career path

The career path for an actuarial student is relatively open and can incorporate an individual’s strengths and interests. It is possible to get a breadth of technical experience across different practice areas whilst completing the exams and then specialise once full qualification has been achieved. It is also possible to focus on one practice area throughout your whole career. Though it is perceived to be a very technical career choice, there are options to move away from purely technical work and take on roles that involve more people management, business development or broader operational management.

The actuarial skill set also travels very well internationally with different overseas actuarial bodies recognising UK qualifications. The UK has the oldest and most developed insurance sector in the world and many emerging markets are following the UK’s model of prudential supervision of insurance companies. As a result, UK actuaries are often seen to be at the forefront of actuarial development and are highly sought after.

95% of UK entrants into the actuarial profession are graduates, the majority having first-class or upper second-class degrees. Employers generally look for a numerate degree and applicants with a keen mathematical mind. Although the profession is trying to encourage people from a much broader range of academic disciplines, they will usually require you to have A-level Mathematics at grade A or above and have a strong numerical aptitude.

Graduates entering the profession will combine work with study towards their professional qualifications. 

  • To be recognised as an Associate of the Institute and Faculty of Actuaries (IFA), trainees must complete two years of Personal and Professional Development (PPD), gained with their employer, and complete the numerous exams that make up  Professional Skill Stages 1 & 2. It can typically take 3 or more years to reach Associate level. 
  • Further study and professional exams to support specialisation and a minimum of one more year of PPD are required to become a Fellow of the IFA.

Some firms offer pay increments linked to examination success to reward trainees who are part-qualified.

It’s worth noting that although some actuarial degrees provide exemptions to professional exams in the core principle subjects, Oxford degrees do not provide any such exemptions.

Do not underestimate the commitment required to manage a full-time job and to study at the same time. It requires a great deal of application and determination and, although employers give their actuarial students generous study support, most trainees fail at least one exam on their path to qualification – which can be a shock to academically bright trainees not used to failing!

For further information on the exams and routes to qualification, see the Institute and Faculty of Actuaries’ website.

 

Skills needed

There is strong competition for trainee positions, and employers are looking not only for high academic achievement but also for the right personal qualities, motivation and skills. For example, communicating complex issues to lay people is a key part of the role and there is a distinct mix of skills sought, as follows:

  • a high level of numerate and academic ability
  • excellent problem-solving
  • analytical skills and logical reasoning
  • ability to plan, project manage and organise
  • business acumen
  • the ability to explain complex business information
  • good interpersonal skills with an ability to build effective working relationships
  • strong self-confidence and integrity
  • self-discipline and application

Getting experience

A number of employers offer internships and vacation work, and undertaking actuarial vacation work can certainly help with applications for permanent positions. A good source of target employers is the Directory of Actuarial Employers. Application deadlines vary from firm to firm and you should start researching firms you are interested in as early as possible, as some firms begin accepting applications from September onwards.

The experience gives you the chance to get to know what the work is all about and check whether you will enjoy it. In addition, the employer can observe you and assess your capabilities – and if you perform well, you may be offered a graduate trainee position for the following year. Work experience in other finance-related professions will also prove useful.

If you are unable to get work experience, think about other ways of demonstrating your knowledge of and commitment to the career. It may be worthwhile undertaking computing courses or taking the Certificate in Financial Mathematics (offered by the Institute and Faculty of Actuaries), or attending open days and speaking to actuaries already working in the profession.

Will I get paid?

Internships and summer jobs are governed in the UK by National Minimum Wage law, which means that if you are carrying out activities that class you as a “worker” by the employer, then you should be paid. Full details of Employment Rights and Pay for Interns are published by the government.

If you are undertaking a learning and development opportunity such as a micro-internship, or volunteering for a charity or statutory body, or shadowing or observing, then you may not be eligible for the National Minimum Wage. The organisation may reimburse you for your travel and/or lunch expenses, but they aren’t obliged to do so.

 

 

In line with many firms in the finance sector, vacancies for actuarial traineeships will begin to open in the summer, a year before anticipated start dates. You can expect these vacancies to close some time during Michaelmas term, and many of the firms will participate in the annual 'Milkround' - the annual season when companies visit UK universities to promote themselves and their graduate opportunities. Students will be able to meet companies and their representatives each year at the Finance Fair (usually in 1st week) and Jobs for Mathematicians (3rd week), and some companies may also run separate company events or presentations, which will be advertised on CareerConnect.

If you are confident you want to train as an actuary it is best to apply as early as possible to get the position, employer and location you prefer. For students who miss the autumn recruitment season, it will be possible to continue to find vacancies throughout the year, but many of the most high profile opportunities are likely to have closed.

Look for vacancies on the websites of individual firms and their social media feeds as well as using industry sources like The Actuary magazine, registering with the Actuarial Careers website to receive reminders of deadlines for applications, and the Oxford Careers Service's vacancy board on CareerConnect (the password-protected area of our website). If you have missed previous deadlines you may find a graduate vacancy listed with one of the specialist recruitment agencies that service the sector, although very few employers will use recruitment agencies for graduate recruitment.

The broad advice given here applies to postgraduate students (and research staff) as well as to undergraduates. Even if job adverts do not ask for a postgraduate qualification, many graduate employers are keen to employ people who have postgraduate qualifications, whether at Masters or DPhil level, and see them as often offering enhanced maturity and a broader set of transferable skills. 

Postgraduate degrees

Full-time postgraduate courses in actuarial science are available through a range of universities around the country and can offer exemptions from a number of the professional examinations of the Actuarial Profession. Sponsorship for a postgraduate degree can be available through The Worshipful Company of Actuaries. The full-time study option can give you time to pass the examinations without the stress of learning a new job, although you will still need to complete 2 years of Professional and Personal Development to be recognised as an Associate of the IFA. Employers can have mixed feelings about applicants who have several exemptions from exams without the practical experience to support it, so full-time actuarial study does not necessarily equate to an advantage in the job market and

Information

Jobs

Recruiters are keen to have a diverse workforce and many will have policies and processes that are proactive in recruiting students and graduates from diverse backgrounds. An increasing number of recruiters are offering traineeships, internships, and Insight events and many are being recognized for their approach to being inclusive employers. To find out the policies and attitudes of the recruiters that you are interested in, explore their equality, diversity and inclusion policy. Search their website to see if they have any specific staff networks, look out for external accreditation such as are they a Disability Confident employer, a Stonewall Diversity Champion or part of the Mindful Employer charter promoting mental health at work. Check to see if they are partnering with such organisations as Rare Recruitment, SEO London, MyPlus Students Club(disability), EmployAbility(disability and neurodifference) and there are many more that are working for specific communities. A key place to look is to see what they do to celebrate diversity on their Facebook and Twitter pages.

The UK Equality Act 2010 has a number of protected characteristics to prevent discrimination due to your age, disability,  gender reassignment,  race, religion or beliefs, sex or sexual orientation. For further information on the Equality Act 2010 and to find out where and how you are protected, and what to do if you feel you have been discriminated against, visit the Government’s webpages on discrimination.

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