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Actuarial Profession | The Careers Service Actuarial Profession – Oxford University Careers Service
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About this sector

If you are interested in economics and business and you are highly skilled in maths and statistics, the actuarial profession could be ideal for you. 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.

Types of job

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:

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

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. 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 government also has an actuarial department. Whilst the focus is on the pensions sector, 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.

Remuneration

Whatever area the qualified actuary moves into, the rewards are notable. Data on salaries published by the The Institute and Faculty of Actuaries indicates that the average starting salary for a student actuary is c. £33,000 to £36,000 depending on the number of exam passes they have. Newly-qualified actuaries can expect a salary of c. £50,000 or more. However, salaries for newly qualified actuaries in more specialist areas of work (such as the London Market or banking) can be significantly higher. Salaries well in excess of £100,000 are typical for senior actuaries. In general, salaries in consultancy are higher than in insurance companies.

Entry points

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.

To qualify as an Associate or Fellow takes on average six-to-seven years as a trainee actuary. Studying for professional examinations is a key part of the role alongside the professional work experience. Qualification requires completion of fifteen professional examinations, and 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 eight 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 & experience

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.

There is often confusion about whether you should be paid to do an internship or work experience. It will depend on your arrangement with the employer as well as on the status of the employer. To find out if you are entitled to be paid when undertaking work experience or an internship, visit the Government’s webpages on the National Minimum Wage.

Getting a job

The Milkround is a useful way of finding an actuarial traineeship, with vacancies advertised early in Michaelmas Term. Use the events organised by The Careers Service to meet companies and their representatives to find out more about actuarial work, particularly the Michaelmas Term Finance Fair (usually 2nd week) and Jobs for Mathematicians (7th week). Look at The Actuary magazine for vacancy notices, and log in to CareerConnect, the password-protected area of our website, where you will be able to search all current jobs.

Actuarial vacancies can still be available in spring and even in the summer, although many of the most popular positions will have been taken later in the year: 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. It is worth registering with the Inside Careers website to receive reminders of deadlines for applications. If you have missed previous deadlines you may find a graduate vacancy listed with one of the specialist recruitment agencies that service the sector. Remember, though, that 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 broad set of transferable skills. Whatever your particular circumstances or career aspirations, the careers advisers here are well equipped to discuss resources relevant to your needs, how best to find jobs and how to market yourself effectively.

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, though it will lose you a year of practical experience. 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.

Our resources

Journals

Through your membership of the Bodleian Library you are able to access a multitude of journals and newspapers free of charge, and you can set set up a personal account for electronic access to, for example, the Financial Times and The Economist.

The industry journals is called The Actuary, and is published monthly. This can also be accessed via your membership of the Bodleian Library.

Take-away material

Collect the following material from our Resource Centre at 56 Banbury Road:

Equality, diversity & positive action

A number of major graduate recruiters have policies and processes that are proactive in recruiting students and graduates from diverse backgrounds. To find out the policies and attitudes of employers that you are interested in, explore their equality and diversity policies and see if they are a Disability Confident employer or are recognised for their policy by such indicators as ‘Mindful Employer’ or as a ‘Stonewall’s Diversity Champion’.

The UK law protects you from discrimination due to your age, gender, race, religion or beliefs, disability 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 website on discrimination.

This information was last updated on 31 January 2019.
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