Are you wondering what would be a good area to study? Did you enjoy a subject like maths or accounting at school? Or do you just like working with numbers? One of the skilled jobs that South Africa is critically short of is an actuary. This means that there are very good work prospects should you decide to follow this career path.
So what does an actuary do?
Actuaries use maths and statistics to work out the financial costs of the risks associated with an event that might possibly happen. This means that they help companies to keep down the financial costs of those possible risks. Actuaries often work for insurance companies that have to deal with the potential risk situations all the time.
For example: How at risk is this type of building of catching fire? Or how likely is this young man to have a car accident?
In order to work out how much risk the insurance company is taking by insuring that building or that car, an actuary will figure out, through analysing mathematical or statistical information, how likely that event is. The more likely it is, the higher the premium the insurance company will charge the client.
What are statistics?
When you work with statistics, you are dealing with data that has been collected from a number of different sources. Once this data has been organised, then you can summarise and analyse it. This allows you to interpret what the data is telling you.
In other words, in order to find out how likely a young man is to have a car accident, you will look at the number of accidents young men in general have been involved in over a number of years. Once you’ve summarised this, it becomes clear in your analysis that they are 60% * more likely to have an accident than the general population of drivers. This means that, in order to reduce the costs of risk to the insurance company, the young man will need to pay more for his insurance cover.
(*This figure is used for example purposes only and is not reflective of current statistics.)
An overview of the duties of an actuary:
- They organise data
- They estimate the probability and cost of an event happening such as: a natural disaster, death, car accident, ill health etc.
- They design and test out various insurance policies, investments such as retirement annuities, pension plans and other business plans.
- They create tables, charts and reports to explain the analyses they’ve done.
- They explain their findings and put forward proposals to their clients.
In which areas do actuaries work?
- Risk Management
Other details about the job:
- Actuaries often work in teams which include managers and professionals in related fields such as accounting and finance.
- Most of the work done by actuaries is done on computers. They use database software and other advanced software to create models that forecast the possibility of an event happening and the potential cost if that event happens.
What, for example, are the statistical risks of a global pandemic breaking out? How well did insurance companies prepare for the risks associated with a pandemic? This would be interesting to find out from an actuary!
- Actuaries often work as consultants. This means that they essentially work for themselves and have a number of different clients.
- Although actuaries often work in the financial services industry, many branch out into other business fields.
FunDza’s Amber Solomons interviewed Keelan Moodley who is an actuary. Here’s what he had to say about his profession:
Why did you become an actuary?
I think when it boils down to it, I just really love solving problems, testing myself, applying my mind. I think that’s probably the biggest reason I decided to pursue a career as an actuary.
Where did you study?
I studied a bachelor of business science, specialising in actuarial science at the University of Cape Town.
What qualities do you need as a person to become an actuary?
You have to be very hard working and have a real attention to detail. To become an actuary requires a lot of effort, time and sacrifice. You have to be the type of person that embraces challenges and someone that’s not afraid of making mistakes.
What do you enjoy about your job?
The main thing is that I get to work with really great people. I work as a client manager at Swiss Re and our company motto is that we ‘make the world more resilient’. I think that’s so true as we make a difference in the lives of so many people by providing insurance cover that gives families protection against unforeseen events, whether that’s death, critical illness or disability.
Can you make a decent living as an actuary?
I think it’s well known that actuaries are very well paid. I think it’s a career that is in demand. A lot of companies are looking for actuaries, not only in the traditional fields, but also wider fields, just based on the way they think and their ability to solve problems. With that demand comes increase in remuneration and the ability to make a comfortable living.
What are some of the challenges of your job?
I think for me as a client manager, trying to manage clients’ expectations and working with a number of different stakeholders, internal and external, can be difficult. In my job you’re never going to get everything right, you’re going to make mistakes, but as long as you’re able to bounce back and learn from them, I think you’re all the way better for it.
Would you recommend this job to young people?
Yes, definitely. It’s a job where you do very stimulating work, you’re solving problems and you’re not doing the same thing every single day. I think that combination is why I enjoy my job and love what I do.
What advice do you have for young people?
Focus on your studies. Think about your long-term future goals and ambitions, whatever those may be, and work hard to make them a reality. I think it’s really important to have a vision and a plan for what you want to do in life.
The steps to becoming an actuary:
- You need to have achieved at least 80% for maths as a matric subject.
- You will have to study for an BSc Degree in actuarial science or mathematics and then write the actuarial exam to become an accredited actuary (more details below).
- Join a relevant firm and become an actuarial trainee. You can do this while you study for the accredited actuarial exam or join when you are older and want to become a registered actuary. You can take an actuarial exam at any stage to see if you are suited to the profession and then transfer from your current career.
- You will need to pass the accredited exam that allows you to be registered as a Fellow of the Actuarial Society or an Associate of the Actuarial Society. This takes between 3 to 8 years. You study for this exam by long distance while you are working as a trainee. Often employers will offer support for study and pay for study leave.
- Now you can find a job anywhere in the world. Actuaries are highly sort after professionals who can work in a number of different fields.
You can study for actuarial science and related degrees such as Mathematical Statistics and Financial Planning at the following accredited universities:
- University of Pretoria: http://www.up.ac.za/insurance-and-actuarial-science
- University of Johannesburg: https://www.uj.ac.za/faculties/science/
- University of Cape Town: https://www.commerce.uct.ac.za/Managementstudies/actuarialscience/
- Stellenbosch University: http://academic.sun.ac.za/statistics/
- University of the Witwatersrand: http://web.wits.ac.za/Academic/Science/Stats/Home.htm
- Free State University: https://www.ufs.ac.za/natagri/departments-and-divisions/mathematical-statistics-and-actuarial-science-home/actuarial-study-support/exemption-agreement
- North West University (Potchefstroom Campus) http://www.nwu.ac.za/bmi
There are a number of bursaries available to someone who wants to study actuarial science.
Some of these are:
- Capitec Bank Bursary
- Old Mutual Actuarial Bursary
- South African Reserve Bank Bursary
- SARS Bursary
- Vodacom Bursary
See the full list here: https://zabusaries.com/list-of-science-bursaries-in-south-africa/
To find out about the Actuarial Society Education Trust and the work being done at schools in disadvantaged communities go to: https://www.actuarialsociety.org.za/get-involved/assa-education-trust/
There is plenty of scope both for bursaries and work for anyone who wants to qualify as an actuary. It does mean working hard at school and in the years that follow but the high salary and scope of work you are qualified for will set you up for a long and successful career. It’s definitely worth the effort!