What is Actuarial Science/Mathematics?
It is the study and application of financial concepts associated mainly with demography (i.e. analysis of population mortality, life expectancy etc.) to real world problems predominantly in the insurance arena.
What is an actuary?
Actuaries apply financial and statistical theories to solve real business problems. These business problems typically involve analysing future financial events, especially when the amount of a future payment, or the timing of when it is paid, is uncertain. A lot of actuaries’ work might be thought of as ‘risk management’, assessing how likely an event may be and the costs associated with it.
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.
(Taken from www.actuaries.org.uk)
What are the examples of actuarial work?
The traditional areas in which actuaries operate are: consultancy, investment, life and general insurance and pensions. Actuaries are also increasingly moving into other areas of the financial sector where their analytical skills can be employed.
Consultancy
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 fact, such consultancies are probably the biggest employers of actuaries in the UK.
Investment
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 quantative investment research. Often investment actuaries work in fields where their understanding of insurance or pension liabilities helps them to manage the investment of the corresponding assets.
Insurance
The work carried out by actuaries in insurance includes designing new insurance policies, setting premium rates, calculating a company’s financial status (based on the policies already sold), and answering technical queries from policyholders. Insurance actuaries also undertake detailed investigations of different experiences; such as how assets and expenses have performed and the extent of different types of claims for different types of insurance policies (eg death claims for life insurance or car theft for motor insurance).
Pensions & Employee Benefits
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. Actuaries are also involved in designing schemes for employee benefits.
(Adapted from www.actuaries.org.uk)
Who should become an actuary and what attributes would be of help?
- To become an actuary, you will generally need to have a high-level of mathematical ability and an above-average level of intelligence.
- Important characteristics for an actuary to have would be as follows:
- Interest in solving complicated problems.
- Interest in business, finance and economics.
- Good oral communication skills.
- Good written communication skills.
- Perseverance (especially in tackling the exams!!!).
Where do most actuaries work in Malaysia?
- Life insurance companies.
- Consultancies providing advice in the fields of employee benefits, life insurance, and general insurance.
- Bank Negara Malaysia (BNM) is also a major actuarial employer
- Universities (such as UKM and UiTM) also employ actuarial staff in their actuarial departments.
Besides insurance firms, which other areas can actuaries venture into?
The areas of work for actuaries are not limited to life insurance and consulting firms only. Instead, the horizon for this line of job is very wide. Below are some of the areas of work which actuaries do:
- Life Assurance
- Actuarial Consultancy
- Investment and Financial Services
- General and Health Insurance
- Employee Benefit Industry (e.g. EPF)
- Government Sector (e.g. BNM)
- Colleges and Universities
What are the career options available to actuaries?
There are many career options available to people who have actuarial background or knowledge, such as:
- Chief Executive Officer (CEO)
- Chief Risk Officer (CRO)
- Chief Financial Officer (CFO)
- Life Insurance Actuary
- General Insurance Actuary
- Asset/Investment Consultant
- Management Consultant
What are the future prospects of actuarial profession in Malaysia?
- Given the expected continuous growth in the insurance market, it is anticipated that the demand for actuaries in Malaysia will continue to grow in the next few decades.
- Future regulatory developments (e.g. requirement for certification of IBNR) and the increasing need for risk management are likely to result in significant increase in demand for actuarial services by general insurers.
Which professional bodies are recognized locally?
Malaysian insurance regulator, Bank Negara Malaysia and the Actuarial Society of Malaysia (ASM) recognize Fellows of the following organizations as qualified actuaries:
- Society of Actuaries (USA)
- Institute and Faculty of Actuaries (UK)
- Institute of Actuaries of Australia
- Canadian Institute of Actuaries
- Casualty Actuarial Society (USA)
What about exams and qualifications?
- The ASM does not conduct its own exams but actuarial students in Malaysia have a choice of taking any of the USA, UK or Australian exams from the above listed professional bodies.
- The current structure for the respective exam series is briefly described below:
- Society of Actuaries (USA)
- 5 Preliminary Exams
- Validation by Educational Experience (VEE) – 3 subjects
- Fundamental Actuarial Practices (FAP) – 8 modules + 2 assessments
- Associateship Professionalism Course
- FSA Module – 2 Modules
- FSA Exams – 2 Exams
- Decision Making and Communication Module
- Fellowship Admissions Course
- Institute and Faculty of Actuaries (UK)
- CT series exams – 9 papers
- CA series exam – 3 papers
- ST series exams – choose 2 papers from 6 areas of specialization
- SA series exam – choose 1 paper from 6 areas of specialization
- Professionalism course
- Experience requirement
- Institute of Actuaries of Australia
- Part 1 (equivalent to UK CT series exams)
- Part 2 – 2 half-year subjects
- Part 3
- 2 compulsory papers
- Another 2 papers from a specific practice area (choose 1 from 4 areas of specialization)
- Practical Experience Requirement & Mentor program
- Professionalism course
- Society of Actuaries (USA)
Which are the universities/colleges offering actuarial programs?
Malaysia
Universiti Kebangsaan Malaysia (UKM), Universiti Teknologi Mara (UiTM), University Tunku Abdul Rahman (UTAR), University Malaya (UM)
Degree transfer programs are offered by these various colleges: University College Sedaya International (UCSI), Help Institute, Inti College, Prime College, Curtin University.
Singapore
National University of Singapore (NUS).
Nanyang Technology University (NTU).
Hong Kong
University of Hong Kong.
United Kingdom
London School of Economics, Heriot-Watt University, City University, Southampton University, University of Kent, University of Wales.
Australia
Macquarie University, University of Melbourne, Australian National University, University of New South Wales.
United States
University of Pennsylvania, Wharton School of Business, University of Wisconsin, University of Iowa, University of Illinois, University of Nebraska, University of Minnesota, etc.
Canada
University of Waterloo, University of Calgary, University of Manitoba, University of Toronto
How is the employment and remuneration in this field of study?
Relative to other professions, actuaries enjoy competitive remuneration. The following lists some major actuarial employers in Malaysia:
• Life Insurance Companies — Allianz Life Insurance, American International Assurance, CIMB Aviva Assurance, Great Eastern, Hong Leong Assurance, ING Insurance, Manulife, Etiqa Insurance, MAA, Uni.Asia Life, MCIS, Prudential Assurance, Tokio Marine Life
• General Insurance Companies – Kurnia, Allianz General Insurance, AXA Affin, Uni.Asia General Insurance
• Takaful Operators – Syarikat Takaful Malaysia, Etiqa Takaful, Hong Leong Tokio Marine Takaful, Prudential BSN Takaful, CIMB Aviva Takaful
• Government and Universities –Bank Negara Malaysia, Universiti Kebangsaan Malaysia, University Teknologi Mara
• Reinsurance Companies — Hannover Life Re, Malaysian Life Re, Swiss Re, Munich Re
• Actuarial Consulting Firms — Actuarial Partners, NMG Financial Services Consulting, Watson Wyatt, JPWall
What kinds of support do local and foreign companies provide?
Most, if not all local and foreign companies support their actuarial students by having actuarial development programs with the following incentives:
• Study and exam leave
• Full/partial reimbursement on costs of study material.
• Salary increment upon passing of exams.
• Bonus upon passing of exams.
How long does it normally take to complete a degree?
A normal bachelor degree spans 3 years (+1 year if you consider an Honours degree in Australia). Thereafter, writing the professional exams through the Institute and Faculty of Actuaries (UK) or Society of Actuaries (USA) or Institute of Actuaries of Australia takes an average of 3-7 years (working and studying) after the degree.
What are the passing rates like?
Passing rates are generally low compared with other professions.
For the Institute, Faculty or Society professional exams, passing rates as low as 15% – 25% per subject are not uncommon.
What are the rewards?
• Financial – qualified actuaries have significantly higher salaries than most other professionals in the financial services industry. In addition, due to increments commonly offered for exam progress, actuarial executives can expect to outperform their peers in other sectors even before qualifying.
• Intellectually stimulating – actuaries are rewarded for their problem solving and analytical skills. As such, job satisfaction comes from working in an intellectually stimulating and challenging environment. This encourages continual growth in one’s technical skill and ability, paving the way to involvement at senior levels of all organisations.
• Employment opportunities – due to the constant demand for actuaries exceeding supply, there is rarely ever a shortage of demand for actuaries. Many actuaries have also successfully transitioned to other non-traditional areas such as corporate finance and investments, where their analytical and quantitative skills are highly sought after.
What are the opportunities like?
With only 70-80 qualified actuaries in Malaysia, the market for actuaries can perhaps still be considered unsaturated. The President of the Actuarial Society of Malaysia (ASM) had recently stated in the press that Malaysia needs at least 100 Actuaries for its estimated 24 million population.
Interested to find out more?
Check out from the following websites:
• Actuarial Society of Malaysia
(www.actuaries.org.my)
• Society of Actuaries
(www.soa.org)
• Faculty & Institute of Actuaries
(www.actuaries.org.uk)
• Institute of Actuaries Australia
(www.actuaries.asn.au)
• Canadian Institute of Actuaries website
(www.actuaries.ca)
• Casualty Actuarial Society
(www.casact.org)
