Actuaries analyse past and present data to solve real life problems. They predict and measure emerging risks for businesses and then help reduce these risks by putting financial safeguards in place.
The skills that actuaries offer are becoming increasingly valued across a range of industries and there are various sectors that an actuary can work in.
So what are those industries? And which companies hire actuaries?
In this article we look at which companies hire actuaries and where an actuarial career could take you.
Which companies hire actuaries?
Typically, companies that hire actuaries are insurance companies and consultancies. These make up the largest employers of actuaries, with close to 75% of the profession working for these types of companies.
The largest practice area that actuaries work in is the life insurance and pensions sector, of which accounts for nearly 50% of the actuarial workforce.
Where can actuaries work in the insurance industry?
General insurance includes personal insurance, such as motor and home insurance, as well as insurance for large commercial risks. Actuaries working in general insurance will be employed to assist with financial management and can also be found working in reinsurance and broking operations.
Actuaries use statistical techniques to analyse substantial amounts of data, which is then used to rate risks and ensure that claims reserves are adequate to meet insurance claims. There are many different factors that can affect the size and number of claims so general insurance companies employ actuaries to assist with their financial management.
General insurance is a fast-growing area for actuaries and if you choose to move into general insurance you could find yourself working for an insurance company, a consultancy or at Lloyd’s of London.
What is Lloyd’s of London
Lloyd’s of London is an insurance market place that is based in the City of London. It consists of multiple financial backers grouped in syndicates, which then essentially join hands and spread the amount of risk. These syndicates specialise in different types of risk.
It is not an insurance company, but instead is a corporate body that is governed by the Lloyd’s Act 1871. The business underwritten at Lloyd’s is mainly general insurance and reinsurance but there are some syndicates that write life assurance.
Interestingly, Lloyd’s was founded by Edward Lloyd at his coffee house in 1686 and started out working in marine insurance. You can read more about Lloyd’s of London here.
Do Actuaries work at Lloyd’s of London?
Actuaries do work at Lloyd’s of London. They are responsible for the oversight of market reserves and capital, which means that they ensure that there are enough funds set aside to ensure that adverse claims are met.
Like actuaries in other sectors, an actuary working at Lloyd’s of London will handle large quantities of data.
Mergers between life insurance companies is becoming increasingly frequent, though when this does happen you tend to find that actuaries are retained from both sides (one of the many benefits of being an actuary is job security, you can read more benefits here).
Working in life insurance is quite a traditional path for actuaries, and they often work at all stages of the business journey, from the product development, through to the pricing and risk assessment as well as the marketing of the new product.
As an actuary working in life insurance, you could possibly find yourself working for a company such as Legal & General, Scottish Widows, Zurich and more.
Do actuaries work in risk management?
A large part of what actuaries do is measure risk, so naturally they are well suited to work in risk management. Actuaries will develop models for businesses to minimise future risk, which they will then have to explain to the business so it can be used to full effect. The actuary will then leave the model with the business.
Can actuaries work in the pensions industry?
Actuaries are very much at home in the pensions industry, and as the pensions sector becomes more complex, there is an increasing demand for specialists to advise on pension schemes.
As an actuary in the pensions sector, you will be heavily involved in designing and advising on occupational pension schemes, which could be anything from formal valuation for one person’s benefits or for a whole pension scheme with over one million members.
Can Actuaries work in finance?
You may be interested as to whether Actuaries can work in the finance sector, and while they have traditionally been more prominent in some areas of finance, they are found in areas including investment and corporate finance.
Can Actuaries work in investment?
Actuaries have been involved in investment management for a while now, and actuarial techniques are used in measuring investment performance.
If you work in investment, you could be involved in buying and selling assets, investment analysis and portfolio management.
Actuaries and corporate finance
An actuary’s skill in forecasting and assessing risks are invaluable in the area of corporate finance. Employers such as government departments, management consultancies and property companies will use actuaries to estimate whether a capital project is financially viable.
Do actuaries work in banking?
As more insurance companies have their own banking operations, many actuaries are now working in this area of finance.
Actuaries are also now found in retail banks, as well as an increased demand in actuaries from investment banks that provide hedge products.
Hopefully this article has given you an idea of which companies hire actuaries, the different industries an actuary can work in and what sort of work they may typically be involved in.