Actuaries: Welcome to the wonderful world of numbers

Actuaries have more fun than you might think – including global travel

(Alamy)

What springs to mind when you hear the word "actuary"? Probably an image of someone cooped up in a back office poring over very hard sums. And, although few of us have even the foggiest idea of what they do, the last adjective we'd associate with the job is "creative". But, says actuary Andrew McGuinness, that's just what it is.

Put simply, actuaries work in areas such as insurance, pensions and investments, using past data and mathematical theories to predict future economic events. And, because those fields are full of uncertainties, it's highly complex and involved work. "I genuinely never have a dull moment," says McGuinness, who works for EMB, a large actuarial consulting firm specialising in general insurance. "I really enjoy the problem solving and the technical challenge. The companies we work with can provide cover for anything from tigers to spaceships, although the most common areas are household and motor insurance."

McGuinness heads a team specialising in financial modelling. You have to take into account all the risks faced by a business, the interrelation between those risks, and the kind of claims that are likely to arise, he says. He also has a hand in his firm's development of actuarial computer software.

For McGuinness, consultancy provides a balance between office-based work and going out to meet clients. Excellent communication skills are vital, he says. "I spend a lot of time explaining complicated concepts to people. You need to be able to take things from a very technical level and spin them out to the bigger picture."

But an in-house job with a large financial organisation also has its attractions, according to Gary Fossett, who is in life insurance and pensions with Prudential. He prefers working within one organisation to the shorter-term projects and troubleshooting that come with consultancy. "It's still very varied," he says. "You get rotated around three main areas: valuation of assets and liabilities; pricing, such as assessing the costs of setting up pension schemes; and business modelling. You build up a wide skills base, and you're not just working with actuaries but with other departments as well."

There's a certain amount of number crunching to begin with, he admits, but as you progress in your career the work becomes increasingly analytical and interesting.

So how do you get in? You don't need a maths degree to apply for a training post as an actuary but you must have studied a subject with significant numerical content, such as statistics, economics, or a science. Or you can study for a degree in actuarial science, which exempts you from some of the professional exams. Employers will also look for strong academic performance – usually a 2:1.

When it comes to the drawbacks of the career, McGuinness and Fossett are in agreement: actuarial exams are one of the hardest professional qualifications, and it often takes at least five years to complete them. "It is quite challenging," says McGuiness. "You get home from a day in front of the computer and the last thing you want to do is pick up a lever-arch file full of study notes." But most employers will give time off for study and help to foot the bill for exams, even resits.

Passing the first two sets of exams leads to an Associate level qualification, after which you can continue to Fellowship of the Institute of Actuaries (or the Faculty of Actuaries in Scotland) via more specialist exams. You don't need to go the whole way. Remaining a generalist at Associate level allows you to work in a wide variety of financial organisations; the professional body is currently promoting this option as a gateway to a City career.

The financial rewards compensate for the toughness of the exams. A starting salary for a student actuary is in the region of £30,000 with a consultant or section leader often earning more than £60,000. The salary of a senior partner can top £150,000 per year.

And with actuarial qualifications globally recognised, there are opportunities to work abroad – McGuinness recently spent two weeks on secondment in Bermuda, a far cry from that stuffy back office.

For more information, visit the Institute of Actuaries at www.actuaries.org.uk