If you want a job as an Actuary you will get quite good at predicting the future! Nothing in the future is certain and some of the things that "might" happen are not desirable. Actuaries are responsible for working out the "Risk" of these events happening as any consequences. Actuary specialize in:
o Ascertaining how likely future events might be,
o Thinking of ideas and working out ways of reducing the risk of the undesirable events taking place.
o Reducing the consequences in the event that the undesired income does take place.
Actuarial jobs require conscientious and logical workers with good analysis skills, a great understanding of how businesses operate as well as practical knowledge of how people typically behaved so that they can create and manage programs that control risk.
The important of actuaries on society can not be underestimated. Insurance plays a vital role in our everyday world and it is easy to underestimate the implicit effect is on our way of life. Would you be so willing to drive your car if you feared the cost of having to replace it? Would people travel abroad so frequently if they knew they would have the financial responsibility if they were to fall ill? Although seemingly unimportant the comfort that comes from insurance can affect our lives in very real and tangible ways even if at first we do not notice them.
So it's an actuaries job to manage this risk in various ways, they attempt to get the best financial benefit with out introducing their clients to excessive risk. Typically they do this in a combination of three different ways.
o Offsetting risk – Typically two undesirable events may have a related relationship, where as the likelihood of one goes up, the likelihood of the other goes down. For example if the cost of wine went up the cost of beer goes down. So to manage the risk we could invest in both beer and wine manufacturers to manage the risk.
o Risk depends which side you are on – an undesirable opportunities to one party is beneficial to another. For example a rise in the cost of flights might be bad for airlines but is likely to have a positive exit for UK based hotels. In this circumstance an actuary may invest in both so they have a positive exit regardless of the outcome of the event.
o Focus on Big Risk – While the greatest reward in the management of risk is dealing with the big problems, while they may well be illegally but if they do occur could result in huge consequences. Often it might only require small steps but the impact may be significant.