Actuary

Category: Actuarial fundamentals · Reviewed by Matt Bartlett, Director · Founder · Last reviewed

Actuary

An actuary is a professional applying mathematical, statistical and financial techniques to the analysis and management of risk — most prominently in insurance, pensions, investment and healthcare. In the UK the actuarial profession is governed by the Institute and Faculty of Actuaries (IFoA) under Royal Charter.

Domains of work

• General insurance (non-life) — pricing, reserving, capital, reinsurance.
• Life insurance — product design, valuation, embedded value, with-profits.
• Pensions — scheme valuations, funding, longevity, de-risking.
• Health and care — pricing of health insurance, long-term care, critical illness.
• Investment — asset-liability management, ALM.
• Risk management — chief risk officer roles in insurers.
• Wider fields — climate, ESG, cyber, AI risk, banking.

Qualifications

The IFoA route to Fellowship (FIA / FFA) typically involves CT/CS/CP/CB modules followed by Specialist Principles (SP) and Specialist Advanced (SA) examinations, work-based skills and a professionalism course. Internationally, qualifications include:

• Society of Actuaries (SOA) — US.
• Casualty Actuarial Society (CAS) — US, focused on general insurance.
• Institut des Actuaires (IA) — France.
• Deutsche Aktuarvereinigung (DAV) — Germany.
• Mutual recognition exists between many jurisdictions.

The Actuarial Function under Solvency II

Article 48 of the Solvency II Directive requires (re)insurers to have an effective actuarial function whose role is to coordinate technical provisions calculation, assess data adequacy, contribute to risk management and opine on underwriting policy and reinsurance arrangements. The head of the function is a senior management function under SM&CR in the UK.

References

• Institute and Faculty of Actuaries — Royal Charter, Bye-laws and Regulations.
• Solvency II Directive 2009/138/EC, Article 48.
• PRA Insurance Rulebook, Conditions Governing Business.

Cross-references

• Institute and Faculty of Actuaries
• IFoA (acronym)
• Fellow of the Institute of Actuaries

Maintained by Matt Bartlett, Director, Apex Insurance Brokers Limited. FCA FRN 724952. Companies House 07014570.