By Kischel Nair, Actuarial Analyst at FNB South Africa.
What differentiates Actuarial Science from other competent professions?
I believe it is the practical ability to recognise a problem in any complex system and apply logic to derive a solution to that problem. The cool thing about the actuary is that he/she can do this while acknowledging the effects of time and other variables that may cause the problem to change in the future. It’s sort of like Tom Cruise in minority report. The further ability to effectively communicate all of the relevant aspects of the problem and solution to all of the stakeholders involved with the system while managing any conflicts of interest which may arise is what make the actuary, in my opinion, the ultimate business superhero.
As I have mentioned, the variety of jobs that the actuarial profession enables one to do is quite astonishing. The reason for this is that the actuarial course attempts to teach one about a business as a whole. This means that an actuary will understand the constituents of a business as well as interactions a business does thoroughly. Actuaries will also understand the importance of a customer and the necessity to design products and solutions that meet their needs both now and in the future. Apart from understanding the value of a customer, an actuary will understand the true nature of both assets and liabilities of a business and most importantly how they are related to each other. This enables an actuary to have a major influence on business decisions that affect the profit line of a company and to implement unique innovative solutions to a variety of problems. This thorough understanding of a business as a whole as well as the interactions a business may have through time is certainly a differentiating feature of the actuary.
Apart from the really cool and important applications, actuarial science offers great job satisfaction (ranked top profession in 2015) and allows for personal growth at any stage of one’s career. There are so many different roles for different personalities that it allows one to choose any desired career path. Whilst other jobs may remain the same and become tedious over time through repetition, an actuarial job is not static and changes with you as you change through life and look to find new challenges to overcome. Where else can you get the pseudo drug like mental stimulation and thrive?
Actuarial science changes the way a person thinks about the world. So in addition to the skills provided to facilitate one’s career, Actuarial Science gives a person really awesome tools to apply in their lives beyond the work place. Apart from the practical knowledge of how to manage one’s personal finance, real personal problems that may seem unrelated to Actuarial science can be solved by using actuarial thinking and techniques. Just as Ben Stiller in Along Came Polly used a risk model to decide between two women, I used actuarial techniques to quantify the cost of a child to try and persuade a friend of mine not to make a hasty long term decision. I don’t think many other professions can boast such a claim.
What does a working actuarial student fresh out of varsity do on a daily basis?
Apart from the usual extravagant adventures I have(such as shark wrestling and vampire hunting), I spend a lot of time on my computer manipulating and making sense of data to enable important business decisions to be made. Of course there is also a fair amount of time I spend studying for board exams.
The most important fact about Actuarial Science is that it really allows for a person to add value and to see themselves as a real life superhero.
Why is Actuarial Science important to society?
Apart from the value an actuary offers from a business perspective, actuarial science enables an efficient transfer of risk and wealth in a society so that growth and development can take place. From an altruistic perspective actuarial science allows for a reduced financial dependency within a society. While there are many other benefits to a society some worthy mentions are financial advice, financial development and innovation and even legal dispute resolutions.
So now that I’ve hopefully dazzled you with the sexy world of actuarial science, I hope that you can see why business person is too much of a bland definition. However, you can now see why it is very difficult to summarise the profession in one or two sentences and why we had to take our long journey to develop a realistic idea of what an actuary is. This is essentially what the opening quote of the article intends to show. The actuary has to be highly skilled in many areas and not in one particular area in order to do their job efficiently. It is because of this fact that the actuary has many roles in the professional world that the many different misconceptions about the actuarial profession exist.