If you had to tell someone that you are an actuary, probably the reaction would be a blank one. Most people have never heard of the word let alone the work involved. Being an actuary carries quite a reputation since the expertise is renowned for its complexity and mathematical prowess.
Actuaries cope with uncertainty and financial risks; they are problem solvers, business analysts, consultants and financial risk assessors who look at past and present information to develop and communicate a picture of the future.
The actuarial qualification carries with it prestige and esteem. In becoming a member of the Institute of Actuaries (UK), individuals join a small group of professionals who have made a personal commitment to high standards of education, competence and integrity. In return for this professional commitment, the profession offers attractive and relevant benefits to all members. Key among these benefits are the professional education programmes and networking opportunities that membership brings with it.
Passing exams at core technical stage is the first hurdle to becoming an actuary. The Malta International Training Centre (www.mitcentre.com) caters for such needs by running an Actuarial Studies diploma course in preparation for the Institute of Actuaries (UK) exams held every April and September.
This is the second such course that the centre is running successfully in Malta. The core technical stage comprises nine subjects - financial mathematics; finance and financial reporting; probability and mathematical statistics; models; contingencies; statistical methods; economics; financial economics and business awareness.
Actuaries apply mathematical, statistical, economic and financial analyses and theories to solve a wide range of real business problems in insurance, pensions, investments and banking. Part of their job is to try and predict what money will do when it is invested in insurance, pensions, stock markets or other financial services.
Actuaries are therefore among the most influential professionals in the financial world. A lot of work can be described as 'risk management' - assessment of the probability of events and of associated costs, understanding how businesses operate, how legislation may impact and how financial economics can affect values are all vital skills for an actuary.
But what differentiates actuaries is their core mathematical, economic and statistical understanding and their ability to apply this to real financial problems.
The traditional areas in which actuaries operate are: life and general insurance, investment, consultancy, pensions and enterprise risk management. Actuaries are also increasingly moving into other areas of the financial sector where analytical skills can be employed.
Actuaries have traditionally worked in life insurance, and their role and responsibilities have evolved as life insurance itself has developed external relations. Their traditional areas of activity include designing and pricing contracts, and monitoring the adequacy of funds to provide the promised benefits.
Actuaries employed by life insurance companies may also provide expert advice on investment, planning and marketing of products, strategic risk measurement and almost any aspect of the work of the company.
There has also been significant growth in the general insurance area of the actuarial profession over recent years. General insurance actuaries are involved in: estimating the reserves for future claims for insurance companies; helping a company identify its management information requirements; rating of insurance products, particularly in relation to classes such as motor and household, where there can be large volumes of data; and advising a reinsurance company on its rates for catastrophe excess of loss reinsurance.
In the area of investment, actuaries are involved in a range of work, such as pricing financial derivatives, working in fund management, or working in quantitative investment research. Often investment actuaries work in fields where their understanding of insurance or pension liabilities helps them manage the investment of corresponding assets.
Actuarial consultancies offer a whole range of services to their clients on issues such as acquisitions, mergers, corporate recovery and financing capital projects. Many also offer advice to employers and trustees who run occupational pension schemes.
In the pensions field, actuaries are usually involved in designing and advising company pension schemes, especially where a value needs to be placed on a scheme's accumulated pension promises. This could be for a formal valuation of a whole scheme or for an individual's benefits (perhaps if they want to transfer their entitlements from one scheme to another).
Enterprise Risk Management is the process effected by an entity's board of directors, management and other personnel, applied in strategy setting and across the enterprise, designed to identify potential events that may affect the entity, and manage risk to be within its risk appetite, to provide reasonable assurance regarding the achievement of entity objectives.
More details about the Diploma in Actuarial Techniques may be obtained from the MITC, by calling 2123 0831, by visiting www.mitcentre.com or e-mailing info@mitcentre.com.