Wage slaves: Actuaries (original) (raw)

Most people have no idea what an actuary does. Outside the worlds of business and finance, the profession is shrouded in mystery. Where there is a perception of the actuarial profession, it is of groups of bespectacled men huddled over calculators, mumbling about death rates and future economic activity.

Basically, actuaries analyse past events and present risks to predict the long-term financial implications of various business decisions. As a simple example, an actuary might investigate trends in inflation, economic activity, incidence of disease and death rates to work out how much a life insurance company needs to charge in premiums to be able to meet the future costs of its policyholders.

Or he might calculate how much a company needs to pay into its employee pension scheme now to ensure that it can afford the pensions it pays out in 20 years' time without running into cash flow problems.

Most actuaries work for pensions and insurance companies, or advise a range of clients through consultancies, although they also work in investment management, corporate finance, government, banking and education.

Qualifying takes time - most trainees are graduates, usually with a degree in maths, actuarial science or economics. It then takes up to six years to qualify by passing 15 intermediate and final exams, which are set by the Institute of Actuaries (in England and Wales) and the Faculty of Actuaries (in Scotland). You can sit as many exams as you like at each sitting, so the amount of time it takes is really up to you. Companies tend to employ graduates and allow them about one day a week study leave.

To become a fellow of the Institute of Actuaries, you need three years' work experience in addition to the exams. This isn't needed to become a fellow of the Faculty of Actuaries. Between them, they have fewer than 7,000 members - making actuaries a rare and much-needed commodity.

'The supply of newly-qualified actuaries is not sufficient to meet demand,' says Dr Geraldine Kaye, managing director of GAAPS, a specialist actuarial recruitment group. 'Although work is plentiful, there are always more candidates for jobs in London than anywhere else, because overseas candidates see it as the place to be.'

Income

Graduate trainees can expect to earn about £20,000-£25,000, though Kaye warns that some companies pay considerably less, and some will pay more. Salaries rise in line with passed exams and a fully-qualified actuary can earn £35,000-£60,000 or more. Salaries are lower in Scotland.

Perks

The relative shortage of qualified actuaries compared with the demand for them makes this a very secure career with lots of job opportunities. 'For anyone numerate looking for an interesting profession, this is the job,' says Kaye. 'And it gives you a truly long-term perspective.'

It is also very well paid.

Disadvantages

It takes a long time to complete the training. It also takes a lot of hard work to qualify because the exams are not easy - the pass rate is about 50-60 per cent for the intermediate exams, and about 30 per cent for the finals. Combining study with a full-time job doesn't make it any easier.

The future

Good actuarial jobs are unlikely to dry up because companies need actuaries, and there simply aren't enough to go around.

'The actuarial profession is the only one with a qualification in applied common sense - and that's always in short supply,' says Kaye.

My view: Andrew Jackson

'This is a very interesting job if you are of a mathematical bent,' says Andrew Jackson of Pensions Actuarial Services. 'There's no really typical day - if you're a back room person, you're likely to spend a fair bit of time in front of a computer, producing calculations of one sort or another. But if you're more senior, or a consultant, you'll spend more time meeting clients or colleagues, explaining the results of your research and presenting your solutions. You don't have to be a 100 per cent mathematician to be an actuary - once you have qualified your work can be very varied.'