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What is an Actuary & Why Might You Need One?

An actuary is the closest thing businesses have to a crystal ball. The future is a roiling mass of uncertainty to businesses. The past 18 months have shown us just how precarious the fate of our companies can be, and how important it is to read the proverbial tea leaves and adapt to the unprecedented. 

An actuary is an essential tool in your risk management arsenal. They leverage their in-depth knowledge of maths and statistics to help companies mitigate risk and ensure that their business models and operational processes are as agile as possible. Here we’ll look at what an actuary does, why you might need one and what to do if you want to become one. 

What does an actuary do?

Actuaries are professional problem-solvers. They combine mathematical calculus with a strong understanding of business strategy. Their duties are varied, but their role is to help businesses to predict the financial impact of their strategic decision-making. An actuary will help to mitigate a company’s risk by modelling the impact that future events could have on their operations and their clientele. 

Actuaries usually have a background in mathematics and/or statistics. However, like quantitative analysts, they will often have extensive computer programming knowledge. Like “quants”, they will develop financial models that will help them to minimise future risk. 

What kinds of businesses hire actuaries?

Actuaries are highly in demand from businesses and governments. Around 75% of actuaries work in the consultancy and insurance sectors. The life insurance and pensions sectors account for around 50% of the current actuarial workforce. They’re also often found in the pensions sector, designing and advising on private pension schemes. As the pension sector grows in complexity, we can expect to see more actuaries migrate to this field. Actuaries are also frequently found in the financial services industry. Corporate finance, investment management and banking are all fields where the role of the actuary has become increasingly important. 

In the wake of the pandemic, more sectors are coming to appreciate the importance of risk management. Experienced actuaries who value their freedom are often seen working as independent consultants helping businesses of all shapes and sizes to meet the changing challenges of an uncertain future.  

How do you become an actuary?

If you have a keen mathematical mind, a flair for strategy and an affinity for creative problem-solving you might want to look into becoming an actuary rather than hiring one. Actuaries help solve an increasingly uncertain future and are helping businesses and governments alike to combat issues from global recession to climate change. It’s a lucrative career with strong projected growth.

If you have a mathematics (or maths-adjacent) degree with a 2:1 or higher, there are many graduate and trainee actuarial roles. These will allow you to learn the realities of the trade while studying for your IFoA (Institute and Faculty of Actuaries) exams. 

After completing your exams, you become an IFoA associate. The next step is gaining more professional experience and becoming a Fellow of the IFoA. This is an important step in gaining the skills and experience necessary to be an independent actuarial consultant. This will allow you to scratch your entrepreneurial itch while also helping numerous clients to benefit from your knowledge and expertise. 

Don’t have a maths degree? There are also non-member IFoA exams that allow you to take your first steps towards becoming an actuary. 

We can help

If you’re interested in discovering more about the role of an actuary, risk management, or any aspect of your business finances, then get in touch with our financial experts. Find out how GoCardless can help you with ad hoc payments or recurring payments.

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