If you want a job as an Actuary you will get quite good at predicting the future! Nothing in the future is certain and some of the things that “might” happen aren’t desirable. Actuaries are responsible for working out the “Risk” of these events happening as any consequences. Actuary specialise in:

• Ascertaining how likely future events might be,

• Thinking of ideas and working out ways of reducing the risk of the undesirable events taking place.

• Reducing the consequences in the event that the undesired outcome does take place.

Actuarial jobs require conscientious and logical workers with good analysis skills, a great understanding of how businesses operate as well as practical knowledge of how people typically behave so they can to create and administer programs that control risk.

The important of actuaries on society can not be underestimated. Insurance plays a vital role in our everyday world and it is easy to underestimate the implicit effect is has on our way of life. Would you be so willing to drive your car if you feared the cost of having to replace it? Would people travel abroad so frequently if they knew they would have the financial responsibility if they were to fall ill? Though seemingly unimportant the comfort that comes from insurance can affect our lives in very real and tangible ways even if at first we don’t notice them.

So it’s an actuaries job to manage this risk in various ways, they attempt to get the best financial benefit with out introducing their clients to excessive risk. Typically they do this in a combination of three different ways.

• Offsetting risk – Typically two undesirable events might have a connected relationship, where as the likeliness of one goes up, the likeliness of the other goes down. For example if the cost of wine went up the cost of beer goes down. So to manage the risk we could invest in both beer and wine manufacturers to manage the risk.

• Risk depends whose side you are on – an undesirable outcomes to one party is beneficial to another. For example a rise in the cost of flights might be bad for airlines but is likely to have a positive outcome for UK based hotels. In this circumstance an actuary might invest in both so they have a positive outcome regardless of the outcome of the event.

• Focus on Big Risk – While the greatest reward in the management of risk is dealing with the big problems, while they may well be unlikely but if they do occur could result in huge consequences. Often it might only require small steps but the impact may be significant.