What do actuaries do

Actuaries work in all areas where an understanding is required of a combination of the probability of uncertain future events and their financial consequences. Primarily actuaries work in insurance, pensions, investments, enterprise risk management, banking, regulation, audit and consultative firms.

In insurance companies actuaries calculate technical provisions, carry out asset-liability modelling and management, solvency assessment and risk management, design data systems, help in the classification and underwriting of risks, advise on appropriate contract design, pricing and appropriate tools for risk mitigation.

The Solvency II Directive requires all insurance entities to have an “actuarial function”, staffed by fit and proper persons, to:

– Coordinate and oversee the calculation of technical provisions;
– Oversee data management and quality control;
– Make judgements about methods and assumptions;
– Inform the administrative, management or supervisory body of the reliability and adequacy of the calculation of technical provisions;
– Provide an opinion on the overall underwriting policy;
– Provide an opinion on the adequacy of reinsurance arrangements;
– Contribute to the effective implementation of the risk management system, especially in regard to the use of models.

The Directive also requires all insurance entities to have a risk management function. Qualified actuaries who are full members of one or more of the professional associations in Europe which make up the AAE (Actuarial Association of Europe) are the natural candidates for leading and carrying out the actuarial function, as well as many other tasks under Solvency II.

In particular they can be expected to meet the fit and proper requirement, because of the qualification standards of the profession, the high priority given by the professional bodies to their members having to keep up-to-date through continuing professional development (CPD), the strong ethical code, technical actuarial standards and a disciplinary scheme.