There are many roles you can pursue as an actuary; Learn more about what it’s like being a Chief Actuary at The Co-operative Insurance…
Starting out on an actuarial career
Like many new actuarial students, I didn’t have much idea what to expect when I started my career. Having obtained a Mathematics degree from Cambridge, I was looking for a career that used my mathematical and statistical background, and alighted on the actuarial profession. It seemed to be well-regarded and well-paid, and suited my skills.
I was offered a job in the general insurance actuarial department of the Co-operative Insurance Society in my home city of Manchester. At that stage I had no clear idea of what type of actuarial role I wanted to pursue – whether in general insurance, life insurance or pensions, whether in a company or a consultancy environment. With hindsight, I was lucky in that initial role.
General insurance is still a relatively new branch of actuarial work, and as such offers opportunities for actuaries to develop techniques in a fast-changing market. Working in a company environment offered me the opportunity to get involved in the detail, to understand every aspect of the way the business operates. For some people, a consultancy environment offers the best route to an actuarial career – gaining exposure to a broad range of ideas from a number of companies – but for me, the depth was more important than the breadth and working in a company was ideal.
The training scheme to qualify as an actuary is notoriously hard work. It consists of a series of 14 or so exams, combining advanced mathematical techniques with specialist knowledge of the various actuarial practice areas (life and general insurance, pensions, investments) and softer skills such as communications.
Studying for the exams while also holding down a full-time job requires a lot of commitment and hard work. I was fortunate in that the Co-operative Insurance offers a generous package of study support for actuarial trainees, but I still had to put in a lot of study in my own time as well. I was lucky to complete the exams in just under three years – many actuarial students take four or five years or more to qualify.
Career experience to date
My initial role as an actuarial trainee involved a wide range of work – producing management information, writing reports for senior managers, calculating the reserves the company needs to hold to pay past insurance claims and setting the prices for future policies. At the heart of it all is a need to use past experience – perhaps statistics on the numbers and cost of motor insurance claims for the last five years – to predict the future.
Of course, even the most advanced statistics and mathematical techniques can take you only so far; throughout my career I have found that the best actuaries are those who can combine that with a deep understanding of the dynamics of the insurance market and a healthy dose of business acumen.
After qualifying, I began to specialise, particularly in the pricing of motor insurance.
I also began to take on more managerial responsibilities – initially just supervising the work of one or two more junior actuarial trainees, and gradually progressing to leading a pricing team of a dozen or so people – a mixture of actuaries, trainee actuaries and statisticians – giving pricing advice not just on motor insurance but also home insurance and a range of other personal and commercial lines of business.
My big career break came in 2007, when I was appointed as Head of Motor Insurance and Pricing. This gave me the opportunity to combine my technical background, still managing the pricing team, with an account management role – responsible for growth and profitability of a £500 million business, whilst also ensuring that we kept our customers happy and complied with a regulatory framework that becomes ever more onerous.
This was something of a departure for an actuary – moving into a more general business management role – but it was one that suited my interests and gave me more exposure to the way the business, and the wider market, operates, as well as more responsibility for leading a larger team of people.
In 2013, I have moved back into a more technical role as Chief Actuary. This involves managing a team of around sixty people covering a wide range of activities, including:
- Pricing – setting the prices we charge for our insurance business.
- Reserving – working out how much money we need to set aside for claim events that have already happened but we haven’t yet paid.
- Capital management – insurers have to hold ‘rainy day’ money to ensure they always have enough money to pay claims, even if things turn bad. We build detailed models of our business to look at all the risks we are exposed to and calculate just how bad that could be, and hence how much money we need.
- Underwriting – determining which types of customer we are prepared to accept, writing the wording of our insurance policies and ensuring that we have appropriate anti-fraud controls in place.
- Reinsurance – the process by which an insurance company itself buys insurance to protect against extremely large claims (e.g. a person seriously injured in a motor accident may be due compensation of several million pounds) or collections of claims arising from a major storm or flood.
My role is very broad and gives me the opportunity to use both my technical actuarial training and my knowledge of the insurance market. The market is extremely competitive and regulation is intense so we can never stand still. I have the opportunity to contribute to the overall strategic thinking of the business and I attend board meetings where these ideas are discussed. I’ve also made a number of TV and radio appearances as an insurance expert – definitely something I wouldn’t have seen myself doing 17 years ago.
Overall, I would definitely recommend an actuarial career. The technical training opens doors to a wide range of potential future roles and whilst it can be very hard work at times, it is also constantly interesting and challenging.