What is the role of Actuaries in the economy?
Actuaries are business professionals who work in organizations whose success depends on managing the financial consequences of risk based on the likelihood of certain events taking place.
They use mathematical and statistical skills to solve problems in the future that involve the flow of money. It takes a combination of strong analytical skills, business knowledge and an understanding of human behaviour to design and manage programs that control financial risk.
The actuarial profession tends to attract people with outstanding mathematical abilities, with the result that many top management positions in financial services companies are filled by actuaries. Accountants and auditors work with the past; they check the financial transactions of previous years to ensure that everything had been done properly. Utilising their mathematical and statistical skills, actuaries analyze past events, assess risks that are known or may arise in view of current knowledge, and then model what could happen in future. This allows the actuary to improve financial decision-making by developing models with which to evaluate the current financial implications of unsure future events.
The application of such models to various social and financial problems has resulted in actuaries also being referred to as financial architects or social mathematicians. In other words, actuaries create more certainty in situations of financial uncertainty or risk. They make financial sense of the future by forecasting the long-term financial implications of business decisions.
Where do Actuaries work?
Most Actuaries work in the following sectors/subsectors:
The insurance industry, Government departments, Academic institutions, Private consulting, Accounting firms, Banking institutions, Medical Aid Schemes, Risk Management, Investment companies etc.