What is an actuary?

Definition

When we say someone is a lawyer or a doctor or a teacher, we tend to have a good idea of what it is that they go to work and do on a daily basis. However, when we say someone is an actuary. What exactly does that mean? A quick Google search turned up the following definitions.

Wikipedia:

a business professional who deals with the financial impact of risk and uncertainty. They provide assessments of financial security systems, with a focus on their complexity, their mathematics, and their mechanisms.

The Society of Actuaries:

a business professional who analyses the financial consequences of risk. They use mathematics, statistics and financial theory to study uncertain future events, especially those of concern to insurance and pension programs. They also evaluate the likelihood of those events, design creative ways to reduce the likelihood and decrease the impact of adverse events that actually do occur.

Actuaries use their analytical skills to manage risk.

Where do they work?

Actuaries can work in any area where there is risk. The skills that they have maybe utilized throughout the financial sector, particularly in investment and the insurance and pensions industries.

• As a consultant, they offer advice on issues such as acquisitions, mergers and financing capital projects, and also on occupational pension schemes.
• Working in investment, actuaries are involved in the pricing and management of investments, particularly in mitigating the risk of investments.
• Working in life or general insurance, they create and price policies to ensure they have the money to cover claims.
• A pension actuary will place a value on the accrued commitments of pension schemes.

They also work in other areas such as government, fraternal organizations, colleges and universities, labour unions, and rating bureaus.

What are the skills they need?

They need a diverse set of skills for the work they do. Some of these skills are outlined below.

Personal characteristics:

• Ability to deal with failure and know that things do not always go according to plan;
• Superb communication skills (written and oral);
• Ability to work independently and to also work in a team;
• Persistence, self-motivation and the drive to succeed;
• Creative problem-solving.

Technical knowledge:

• Strong mathematical skills: probability, statistics, calculus;
• Ability to understand and interpret legal documents.

Computer skills:

• Ability to formulate spreadsheets and carry out calculations;
• Ability to manipulate and use word processors and databases.

Business skills:

• Finance;
• Economics;
• Accounting;
• Current affairs: the ability to understand how what is going affects the work to be done.

I stuck out like a sore thumb

“Vyda”

“Mad Vy”

“Vyda G”

Some were bold enough like my brothers to call me names to my face. With brothers like mine, who needed enemies? In their opinion, they were calling it as they saw it. My younger sister, however, was more forgiving; she thought I was cool.

Vyda was the name of a madwoman from the country where my parents grew up. For whatever reason, I reminded my brothers of this woman.

Could it have been the scraps of cloth they would often see me wearing? Perhaps.

In my defense, they never stopped to ask me why I had pieces of scrap material of varying colours hanging from me. After all, I had a darn good explanation.

Explanation

My aunt was a dressmaker. When we visited Auntie Pansy, she would give me scraps of material to make clothing for my dolls. One day whilst designing yet another outfit, it occurred to me that I could also make outfits for myself. The problem was that no one piece of material was large enough to make me an entire outfit. Consequently, I pieced together different materials.

A brilliant solution I thought. However, what my brothers saw was their little sister playing in the back yard wearing scraps of material. Hmmmm, talk about their lack of vision!

A recurring story

This is just one example where I never felt like I fitted in. For years, in front of certain audiences, I pretended to be someone I was not. Exhausting much! Eventually, I dropped the façade and started the journey of owning and accepting the good, the bad, and the ugly about myself.

My actuarial journey is yet another example of my recurring story – another area of my life that I just did not feel welcomed.

The journey

My actuarial journey started when I was accepted to read for a Bachelor of Science in Actuarial Science. It would appear that I willingly chose Actuarial Science. Let me hasten to right that wrong – Actuarial Science chose me. Let me explain.

Undergraduate studies

In high school, I wanted to be a lawyer, not because I loved law but because my options were doctor, lawyer, indian, or chief. I do not like the sight of blood and in my teenage mind, I could not figure out how I would make a living being an indian or a chief. By the process of elimination, I chose law.

One day I overheard my parents discussing sending me to school in the UK to study law. They wanted to get rid of me I thought so I boldly announced that I no longer wanted to be a lawyer. This decision left me in a bind. It was time to go to university and I had no clue what I was going there to do.

My Math Teacher came to my rescue. She told me about this thing called Actuarial Science. I jumped for joy even though at the end of our conversation, I still had no idea what Actuarial Science was. From the conversation, I gathered that it did not include Chemistry or Physics. This was good enough for me because I wanted to drop these subjects after high school.

I did not fit in. Math at the university level was more about theorems and proofs. My classmates were all so ‘bright’. They were actually following what was being taught during class to ask questions! The only times I felt at peace were during my social science lectures, my dance classes, and hanging out with my friends who were all from Computer Science.

I was disappointed at the end of my programme and I barely passed my actuarial courses. Twenty of us started the programme and only twelve of us survived to graduation. I was one of the bottom two of my graduating class. Consequently, my confidence took a major hit. I voted myself the least likely to succeed in Actuarial Science.

Graduate studies

I migrated to the United Kingdom and eventually the opportunity to do postgraduate studies presented itself. I ran from Actuarial Science like the plague and pursued a Master of Science in Management and Finance. This was my chance to right a wrong from my past – I graduated with distinction.

Return home

I returned to Jamaica and as the faiths would have it, I was offered an actuarial job that technically, I did not apply for. The writing was on the wall.

In the beginning, the learning curve was steep because I had no clue what I was doing but I had to figure it out. I learn best by doing. Throw me into the deep end (not that I am a happy bunny about being thrown in) and I refuse to sink. This trait has served me well over the years.

Message to all aspiring [actuaries] anything really

In dealing with [actuarial] people over the years I have gotten the impression that we believe that we must have all the correct answers. I have learnt that there are several ways to skin a cat and that we do not always get it right and that is okay. When things go wrong be accountable and deal with the consequences.

My journey has been more of a marathon than a sprint. Several times I wanted to quit and go find something else to do with my life. I had to learn that life does not go on pause simply because I was not in the mood. I had to learn how to juggle.

Conclusion

From sticking out like a sore thumb to being an Associate of the Society of Actuaries. I assist in the mentoring and continuous training of Actuarial Assistants and I also lecture Calculus at a university. Not bad I think for someone who was self-voted:

“least likely to succeed at this thing called Act Sci”.

To all my sore thumbers – let us dance and toast to owning sticking out like a sore thumb.

A video summary