Kongsi: The Truth about Actuarial Science?

Saya juga kongsikan antara yang telah dibuat sedikit homework oleh saudara Ahmad Hafifi Hamdan yang dikongsikan dalam Nota Facebooknya yang bertajuk "The Truth about Actuarial Science" dan anda bolehlah menambah pengetahuan berkaitan Sains Aktuari jika anda benar-benar berminat. Semoga perkongsian di bawah memberikan anda kefahaman berkaitan bidang tersebut. Terima kasih juga kepada Ahmad Hafifi Hamdan kerana sudi berkongsi hasil homework beliau berkaitan bidang ini.

Quoted from forum.lowyat.net:

I believe that people are doing Actuarial Science for the wrong reasons. I hope that this post will actually shatter the disillusionment that people have. Don’t get me wrong, I am not trying to discourage people to pursue this challenging course, its challenge being its ultimate reward. However, it is disheartening to see so many people get into this course and ending up not being qualified actuaries, because they fail to understand what this course is all about.

First and foremost, my qualifications: I have wanted to do Actuarial Science since I was in Form 4. In college, I did my research and I have looked at the qualifications provided in the UK, US, Australia and Malaysia. I have now finished my final year in Actuarial Science in the UK. I have interned in an insurance company in Malaysia as well as in my current location. And I have been in your shoes before.

To get the ball rolling, here are some misconceptions that need to be cleared up:

1. I want to do Actuarial Science because I like Math.

This is the biggest misconception that people have about Actuarial Science. In actual fact, a good knowledge of Mathematics is necessary, but a great knowledge is not. In the UK, the first 8 professional papers are somewhat Maths-based, but the tougher papers at the end are all written papers, which require a good command of English, a good knowledge of the insurance industry and good critical thinking skills. Throughout my course, the most difficult branch of Maths we did was Calculus and Linear Algebra, and that is not saying much. When you do start working, you will realise that the only Math you need are mostly addition and subtraction. Computer Programming will be the most important skill you will ever need. And to all of those who says that they need Further Math in their A-Levels, I did Math, Economics and Law. If you like Math, do a Mathematics degree.

2. I want to do Actuarial Science because the pay is good.

True, we have one of the highest starting salaries in the business world. Not by much though. The thing is, a qualified actuary does earn a lot. But to get that qualification, one has to pass professional papers, and those are not easy by a mile. The average time it takes to pass all your papers in Malaysia is around 6 years, depending on how good you are. (Some do take more than 10 years) And truth be told, all other professions will be able to earn a satisfactory remuneration within 10 years. If you want the money, go into Investment Banking. In a magazine which I have read, in business, while all other financial workers are paying off their mortgage for their first house, Investment Bankers are buying their second home.

3. I can pass all my professional exams if I work hard enough.

I want to believe this. I really do want to believe this. But with only 50 qualified actuaries in Malaysia, doesn’t it make you doubt that the only reason people are failing is because of a lack of effort? Studying is easy enough. Working is easy enough. Studying while working is not. While I was working in Malaysia, a colleague of mine works from 9 to 7 everyday, if he is lucky. On his way to and back from work, he studies on the LRT. If there is overtime, he will need to stay back and continue working. On weekends, he studies. At night, after being thoroughly exhausted at work, he studies. And while doing all these, he needs to find time for his girlfriend, family and friends. Now, ask yourself this: can you picture yourself doing that for a year? 3 years? 10 years?

I am really glad I chose this course. I know I would spend half my time working staring in a computer at spreadsheets. I know it will be a hard few years in front of me. I also know that I want nothing more than to qualify as a professional actuary, as I do love what I do very much. But I wished I knew what I was in for before I made the decision. And I do hope that people who read this will have the ability to make an informed decision about the course that is Actuarial Science.

Another post:

I'm going to try to answer your questions. First and foremost, a degree in Actuarial Science is not necessary for a career in Actuarial Science. The only reason why people choose to do a degree in Actuarial Science is because they want exemptions from professional papers and want a leg up in them. However, I know for a fact that UK companies do not specifically employ students who did Actuarial Science - they hire people who have any Mathematical background. This is because the papers which you get exemptions from (CT1 - 8) are not difficult. In fact, CT7, the economics paper is just a simpler version of the A Levels Economics Paper! I know people who complete their CTs in a year and a half worth of studying, without any exemptions. One more problem I encounter when having a degree in Actuarial Science is that you pigeon hole yourself into that profession. It doesn't allow you to diversify into many other financial branches as it is so specialised in its own way, and that might be hard for a person who wants to find a job which is not actuarial-related in the future. Truth be told, I applied to do Mathematics in Cambridge as well, and if I had gotten the offer, would have accepted it straightaway.

It is good that you are trying to find out that if it is Maths that you like, or is it AS. Actuary's main industry is insurance. They are risk managers, they try to maintain the solvency of the company by managing the risk effectively. In a nutshell, the work that an actuary does in insurance can be divided into two - Pricing and Valuation. In Pricing, actuaries have to price insurance products so that the company will make a profit. This is not as easy as it sounds because the way insurance works, the company only suffers a loss in the future, and it is up to an actuary to price the product in a way that it is improbable for the company to go bankrupt anytime in the future. That is why we have projections and forecasts. In Valuation, actuaries need to take the premiums that people pay to invest in the best possible assets. This is necessary for the company to make a profit, because many products only allow to break-even, and it is up to the actuary to find the most valuable financial assets to invest in. There are consultant and contractor actuaries as well. They move from company to company advising insurance companies on how best to price their products, how they value their products, how they meet regulation, etc... They are one of the most well-paid people in the field. An actuary can become Chief Financial Officer and eventually CEO of a company. The fact is that insurance companies need us. We are the experts when it comes to the financial matters of an insurance firm.

Do let me know if you require more information.

I like the work. I like the challenge. I like the fact that I have different stuff thrown at me everyday. Sometimes, it does come to a point when I ask myself if it is worth it, especially having to come back from work and put myself in front of books. But I genuinely love the job I am given, and I really don't see myself doing anything else. I think it is the interest that keeps me here, and the fact that I do like applying Mathematics in practical business problems that helps me maintain my interest in the field. Plus, the fact that once I qualify, I'll get a FIA behind my name, which is pretty cool.

Another post:

Good point, communication skills is one of the most valued commodity in the actuarial world. This is because what we do in the field is so technical, that normal people will never be able to understand it. Thats is why, we need good communication to be able to present our work in laymen form to higher management. In fact, two of the UK institute papers are based around communication as the Institute has realised how important this skill is to the field. And that is why, I do stress that having a good command of English is necessary to succeed in the actuarial world.

In my opinion, the reason why more and more people with AS degree are venturing into other fields is because they cannot cope with the exams pressure and have decided that they do not want to be an actuary. However, with a degree, we do know how to manage any financial risk, and that is probably why people venture into risk management, which is extremely big now, due to the credit crisis. But bear in mind, that not all companies provide study support to these graduates, and they will most likely end up as risk managers, not actuaries.

I believe that if someone is not too sure whether they like this profession, they should do more research, talk to some actuaries and go do an internship. The work of an actuary and an accountant is so different that it is hard to compare them both on an equal footing. It all boils down to the individual, I guess. I personally never saw myself as an accountant, hence the choice was easy. I do agree though that when an accountant moves to management, he would need the same qualities, however, the question is, would you like the work thrown at you before you become senior management?

I'm going to be very biased now, and say that it is true that accountants do have more flexibility, but so do actuaries. The fact that qualified accountants are a dime a dozen, is probably gonna make competition tough. Actuaries are elite.

This post is from other person:

Actuarial Science is a study of accident, risk events on financial, economic and commercial impact of the department. This department needs to be translated into the various effects of data and in-depth discussion and study of these data in order to maintain business and financial sectors such as sensitivity in the market, competitiveness and internal financial stability. Therefore, students must not only learn a variety of probability, statistics and other analytical techniques to study the analysis of mortality, making life table, the application of traditional topics of interest such as actuarial science, but also must learn a variety of financial financial, economic, insurance, accounting, risk management and other aspects of science.

Learning content: This department's curriculum includes a foundation for economics, algorithms, statistics, permutations and combinations, accounting and finance, actuarial mathematics, risk theory, Insurance, interest theory, investment analysis and portfolio management.

Future prospects: Graduates may generally be in the business sector, such as insurance companies, financial institutions, such as the actuarial department of the actuary or actuarial consultant. In addition, you can also own private practice or enterprises to provide financial investment, risk management, employee retirement benefit plans and corporate asset management to provide consulting services.

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