If you think actuarial science is just about statistics and spreadsheets—think again. Actuaries work in a number of different areas, advising businesses and governments across the world on how to manage the complex risks facing society in the 21st century and beyond.
These are some of the areas in which actuaries are making a huge impact on global policy:
Climate change is predicted to have a major impact on weather patterns throughout the world. To be able to keep on providing insurance from weather perils such as flooding, actuaries need to analyse data to predict the frequency and severity of future weather events.
Actuaries can help reduce the impact of climate change in a number of ways such as liaising with governments in designing suitable flood defences or changing the way that houses are constructed by offering cheaper premiums when different materials are used.
In addition, the long term investment outlook that actuaries in life insurance and pensions have allows them to steer funds into long term green investments.
When pricing conventional motor insurance policies, actuaries often have to group people into broad categories. For example, on average young drivers have more frequent accidents and also more expensive accidents than older drivers and hence are charged a higher premium to pay for these claims. However, many young drivers drive safely and so are being over-charged.
Telematics allows the data of an individual’s driving history e.g. speed, braking, time when they drive, etc. to be recorded and transmitted to the insurance company. By analysing this data, actuaries can determine who are safer drivers and also quantify the impact of different characteristics. This will allow fairer premiums to be charged to policyholders.
Actuaries can thus reduce the overall risk environment on the roads by encouraging safer driving through education and the offering of cheaper premiums. This will reduce accidents which will benefit all of society.
Over recent years, the way that companies conduct their business has changed substantially with an increasing usage of technology and in particular the internet. Whilst this has allowed companies to become much more efficient, it has also exposed them to new and constantly evolving types of cybercrime.
The insurance industry exists to allow their customers to reduce their exposure to risk by transferring some of their risk through insurance policies. Over time, the insurance industry has developed new products and modified existing products to meet their customers’ changing needs. As companies, and individuals, are at risk of being liable for potentially large sums of money due to cybercrime there is an increasing demand for this type of insurance. However, for actuaries to be able to design and price these products they need to keep on top of a constantly changing risk environment.
By pricing insurance products based on their customers’ actions, actuaries can influence their customers’ behaviour by changing the premiums they charge. For example, premiums can be reduced if customers have the latest operating system with all updates installed. This will reduce the impact of cybercrime on all of society.
Throughout history, the world’s population has been susceptible to pandemics ranging from the Black Death in the Middle Ages through to Spanish ‘flu that killed millions in 1918. In recent years there have been minor outbreaks of Bird ‘flu and SARS,
Pandemics can be mathematically modelled by analysing such characteristics as the length of incubation and how infectious a disease is. Similarly, as our world becomes more connected, the movement of people affect how quickly a disease can spread as one infected person on an aeroplane going to a major transport hub could lead to a disease quickly spreading across the world.
By analysing the early stage of a potential pandemic an actuary can model the potential development of the pandemic allowing medical resources to be deployed where they are expected to be needed the most. In addition, actions such as shutting down airports and constructing quarantines can be employed to try and reduce the overall impact of the pandemic.
Actuarial undergraduate degrees at Bayes
Our Faculty of Actuarial Science and Insurance is one of the leading academic actuarial departments in the world and offers three undergraduate degrees:
BSc in Actuarial Science
This degree is for highly numerate students who wish to pursue actuarial careers in insurance, finance, consultancy and related areas.
BSc in Finance with Actuarial Science
This degree introduces you to different aspects of the financial world, with an emphasis on risk management.
BSc in Data Analytics and Actuarial Science
This degree prepares you for a career in actuarial science and the dynamic world of data science.