#life #insurance #actuaries
Have you ever wondered how insurance companies come up with the pricing for the myriad of policies offered by each? And what about those frequent rate changes? To the uninformed, these ever-escalating rates seem arbitrary. While insurance policy pricing does seem random at best, it is really the result of a lot of hard work, careful analysis and number-crunching. This is the work that is performed daily by a relatively small group of little-known but highly trained insurance industry employees who wear the title of Actuary.
As you search for insurance industry jobs. you probably won’t notice many openings for Actuaries. Once an insurance company finds a well-qualified Actuary, it’s in the company’s best interest to hold on to that person for as long as possible. As a result, the majority of new job openings for Actuaries are actually those that are needed to replace Actuaries who have reached retirement age. Actuaries in general are paid decent salaries, and work 40-hour weeks inside comfortable office environments .
What does an Actuary do all day? An Actuary is responsible for analyzing the possible outcomes of the types of events that could potentially cause policyholders to make claims against their insurance policies. They study the overall likelihood that different events will occur, and they evaluate the potential risks each event poses. Their goal is to try and assess the costs associated with the event should it actually occur.
Why do they do this type of analysis? Insurance companies need to make sure that the money they are charging and collecting from policyholders is adequate to cover the costs of settling the claims that might potentially be made by policyholders as well as their other expenses. In fact, the work that Actuaries perform is crucial to an insurance company’s ability to remain in business. If policies are priced too low, there possibly won’t be adequate funds available to pay out all claims. If policies are priced too high, insurance companies risk losing business to those insurance companies offering less expensive policies.
The majority of Actuaries work in the insurance industry, and in particular in the life, health, and property/casualty branches. Others are employed by the financial sector and help set prices for securities, pensions and other financial offerings. Actuaries may be asked to testify at rate increase public hearings and court proceedings or they may need to help develop internal corporate policy.
What qualifications will you need before searching insurance jobs in this field? Those hiring Actuaries prefer a Bachelor’s Degree in Math, Statistics or some other area of business such as Accounting, Economics or Finance. Some colleges even offer a degree in Actuarial Science. What’s important is an ability to work with figures and basic business knowledge.
If you’re good with numbers and you like to evaluate “what-if” scenarios, you might be a perfect candidate for an actuary position. As you’re searching for jobs in the insurance industry, look hard to see if you notice any openings.
One Response to What Actually is an Insurance Actuary?
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