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| Rueben the Risk Analyst |
So I was watching a movie one day called “Along Came Polly” staring Ben Stiller and Jennifer Aniston. (disclaimer: I’m not necessarily promoting this movie, although I thoroughly enjoyed it). When researching Actuarial Science, this movie came to mind. The movie depicts Reuben Feffer as an uptight, actuarial or risk analyst who works for an insurance company. Although this is just a movie and exaggerates the lifestyle of an actuary, it does give a little insight to this area we call, “Actuarial Science”. Actuarial scientists analyze, predict, and look to find ways to decrease risk within corporate companies, banks, government or within a personal consulting business. This was the first time I was ever really introduced to this career field.
This career choice seems to be one that many individuals haven’t heard about or have yet to be exposed to. In 2008 there were less than 20,000 actuaries in the United States. So the likelihood of you or I coming across an Actuary is significantly less than the probability of, let’s say knowing personally someone who is in the health field.
Even more, most people have a hard time describing just even what they think an actuary might be! Check this video out.
What we do know about actuarial science is that individuals interested in this major must have a love for math. More than just a love, you also must be quite proficient with numbers and formulas. Although there are lots of benefits to this job, such as a relatively high starting salary (on average), more job stability, increasing outlook and pretty relaxed environments; its important to be aware that this job is for those who really pay great attention to detail and are equipped with great critical thinking skills. Just think…Actuaries are like fortunetellers. They predict the future [risk] that may or may not occur, however they have proof to back them up—numbers and formulas. With this being said, being “right” is probably more than just necessary.
So here are some things to consider if you are thinking about choosing a field of study in actuarial science.
Skills and Abilities:
Proficient math knowledge
Calculus, statistics, probability
Keen analytical, project management, and problem solving skills
Good business sense
Finance, accounting, economics
Solid communication skills (oral and written)
Strong computer skills
Formulating spreadsheets, statistical analysis programs, database manipulation, programming languages
Calculus, statistics, probability
Keen analytical, project management, and problem solving skills
Good business sense
Finance, accounting, economics
Solid communication skills (oral and written)
Strong computer skills
Formulating spreadsheets, statistical analysis programs, database manipulation, programming languages
Conventional, Investigative, Enterprising
Want to test your knowledge, try doing this problem:
1. A tour operator has a bus that can accommodate 20 tourists. The operator knows that tourists may not show up, so he sells 21 tickets. The probability that an individual tourist will not show up is 0.02, independent of all other tourists. Each ticket costs 50, and is non-refundable if a tourist fails to show up. If a tourist shows up and a seat is not available, the tour operator has to pay 100 (ticket cost + 50 penalty) to the tourist. What is the expected revenue of the tour operator?
- 935
- 950
- 967
- 976
- 985
This is just an example of the type of problems an actuary might solve.
1. A tour operator has a bus that can accommodate 20 tourists. The operator knows that tourists may not show up, so he sells 21 tickets. The probability that an individual tourist will not show up is 0.02, independent of all other tourists. Each ticket costs 50, and is non-refundable if a tourist fails to show up. If a tourist shows up and a seat is not available, the tour operator has to pay 100 (ticket cost + 50 penalty) to the tourist. What is the expected revenue of the tour operator?
- 935
- 950
- 967
- 976
- 985
This is just an example of the type of problems an actuary might solve.
Educational Prep:
Classes in these specific areas are definitely helpful.
finance
microeconomics
macroeconomics
three semesters of calculus
one semester of linear algebra
two semesters of calculus-based probability and statistics
actuarial science courses, as available
computer science courses
business courses, such as marketing
communication courses, such as speech, business writing and technical writing
literature, history, art, political science, the humanities, and other liberal arts classes
finance
microeconomics
macroeconomics
three semesters of calculus
one semester of linear algebra
two semesters of calculus-based probability and statistics
actuarial science courses, as available
computer science courses
business courses, such as marketing
communication courses, such as speech, business writing and technical writing
literature, history, art, political science, the humanities, and other liberal arts classes
Four-year degree programs are very helpful and can prepare you for the work that will be needed to pass the professional exams required of this career. However, a degree is not required, as long as you can pass the exams.
Related majors to consider: Mathematics, Applied Statistics, Computer Science
Related majors to consider: Mathematics, Applied Statistics, Computer Science
Related Careers:
If you are considering a career as an actuary, check out the following links for more information.
New Batches are starting from 2nd June'12 for ACET and CT Series
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If you are dreaming of a highly rewarding and challenging career in the field of mathematics, then actuarial Science is an interesting option. The actuarial profession was formally established in 1848 with the formation of Institute of Actuaries (London).At one point of time it was the only institute in the world to conduct actuarial professional examination. Later in 1944 was formed the actuarial Society of India whose main aim was the advancement of actuarial profession in India.
The Job
Actuarial science is a discipline that applies mathematical and statistical methods to assess risks in the insurance and finance industries. An actuary is a business professional who analyzes the financial consequences of risk. These professionals work in various insurance companies, employee benefits departments of large corporations, banks, stock exchanges, consultancies and other financial institutions controlled by government and private bodies.