If you’re considering a career as an actuary, then it’s important to have a clear understanding of the job description of an Associate Actuary, which is one of the stepping stones towards becoming a fully qualified actuary or Fellow Actuary.
This post will provide valuable insights into the job description of an Associate Actuary, the qualifications required to excel in this field, and the career opportunities and growth potential for this job track.
What Is an Associate Actuary?
In general, an actuary is a professional who uses mathematical and statistical techniques to evaluate and manage risk in a variety of industries, such as insurance, healthcare, banking, investments, and pensions, among others.
On route to becoming a fully qualified actuary (or Fellow Actuary), members of an actuarial profession must first qualify as Associate Actuaries.
An Associate Actuary is a professional who has completed the requirements of an actuarial professional organisation to become an Associate member. Typically, this involves passing a series of actuarial exams and obtaining the necessary experience while working.
An Associate Actuary usually has a good understanding of actuarial principles and practices and can perform various actuarial functions.
Associate Actuaries start their careers as actuarial analysts. During this time they gain the relevant experience and professional training. In addition to their day job, they are expected to continue writing their actuarial exams to reach the Associate Member status. They would often report to an actuarial manager or fully qualified actuary, who is responsible for signing off on their work-based skills requirements.
Working as an Associate Actuary can lead to a challenging and rewarding career.
What Does an Associate Actuary Do?
The Associate Actuary job description will depend on the industry the candidate specialises in.
Initially, the Associate Actuary will perform the work of an actuarial analyst. As they pass more exams and gain more experience, they will take on more responsibility and eventually become fully qualified actuaries or Fellow Actuaries of their region’s professional body.
An Associate Actuary performs various actuarial functions, such as analysing data, developing and maintaining actuarial models, and preparing reports. They must also collaborate and work with other departments to gather data, monitor industry trends and changes in regulations that may impact actuarial calculations and the business they work for.
The Associate Actuary job description requires a deep knowledge and understanding of mathematics and statistics. Using this knowledge, the Associate Actuary can design and price different products such as life insurance products, banking products and healthcare products, to name a few. In addition to the product development and pricing function, they must also predict and manage risks associated with these products.
For example, an Associate Actuary can be responsible for designing and pricing a crop insurance product that protects a farmer against severe weather conditions and disasters that may impact the farm’s yield. The Associate Actuary must then determine the risk posed by the insured farm based on a variety of underwriting factors, which include the farm’s geographical location, previous claims by the farmer, and the types of crops grown on the farm, among other things. Based on this information coupled with historical data of past claims and future predictions of weather patterns, the Associate Actuary can decide whether to accept the risk (i.e. grant an insurance policy to the farmer) and they can price the crop insurance appropriately.
As an Associate Actuary becomes more senior, they are expected to provide mentorship and guidance to junior team members.
For a complete breakdown of what an actuary does in different insurance industries, be sure to read this article.
Role of an Associate Actuary
The role of an Associate Actuary is to provide actuarial insights and support to the company or organisation they work for, whether that is an insurance company, bank or healthcare provider.
They are mainly responsible for ensuring the accuracy and reliability of actuarial models and calculations and for communicating their findings and recommendations to management and stakeholders.
Through the statistical analysis of historical data, Associate Actuaries can evaluate and manage the financial risks associated with insurance policies and other financial products.
An important part of an Associate Actuary’s role is reporting findings to their actuarial manager. They must also be able to communicate results effectively to a non-technical audience.
During the course of their job, they must make sure to capture their work experience to complete the required work-based skills necessary to become an associate member of their professional body. In addition to gaining work-based skills, they are also required to pass a series of technical actuarial exams before they can gain the Associate Actuary designation.
Associate Actuary Roles and Responsibilities
The roles and responsibilities of an Associate Actuary can be wide-ranging and will vary depending on the industry they work in.
An Associate Actuary can be responsible for performing various actuarial functions, such as analysing data, developing and maintaining models, and preparing reports.
Here are 10 roles and responsibilities an Associate Actuary may perform:
- 1Gathering and analysing large amounts of statistical data to predict future events, such as mortality rates, accident rates and investment rates.
- 2Analysing the data and performing actuarial calculations to predict future events. For example determining the appropriate price to charge for a life insurance product or motor vehicle insurance products and the appropriate reserve to set up for future claims.
- 3Developing and maintaining various actuarial models, including pricing, reserving, and forecasting models. This includes continuously enhancing the models and tools used for forecasting and risk assessment.
- 4Preparing reports and presentations to communicate actuarial findings and recommendations to management and other stakeholders. For example presenting the latest experience review on an insurance company’s book of household insurance policies to senior management.
- 5Collaborating with other departments to gather data and ensure the accuracy of assumptions used in actuarial models. This means Associate Actuaries must work closely with other professionals, such as underwriters, investment managers, and accountants.
- 6Monitoring industry trends and changes in regulations that may impact actuarial calculations and models, such as changes to the reserving requirements of insurance companies, which might impact the reserves that need to be set aside for future claims.
- 7Assisting in the development and implementation of policies and procedures related to actuarial functions, for example codifying the experience review exercise, which needs to be performed on a regular basis.
- 8Developing and implementing risk management strategies, such as creating products that do not attract fraudulent behaviour by customers.
- 9Effectively communicating their findings to a non-technical audience in a clear and concise manner. The nature of their work is often technical and difficult to explain in layman’s terms.
- 10Providing mentorship and guidance to junior team members. This can be especially useful for junior team members who are currently writing the exams the Associate Actuary recently passed.
Associate Actuary Skills
As you can tell from the roles and responsibilities above, the job description of an Associate Actuary requires a unique skillset. There are several key skills required to perform the job effectively.
The ideal candidate will have excellent analytical and communication skills, be detail-oriented, and possess a strong understanding of actuarial principles.
In addition to this, Associate Actuaries must have a strong foundation in mathematical and statistical concepts, understand the insurance and banking environment. They must also have the discipline and wherewithal to complete the technical exams and work experience required to reach associate member status of their professional body.
The five most common skills that an Associate Actuary should possess include:
- 1Strong analytical and problem-solving skills. This includes a high level of mathematical and statistical skills. Associate Actuaries need to have strong mathematical, statistical, financial, and economic skills to evaluate and manage the financial risks associated with insurance policies and other financial products. Associate Actuaries often work with large data sets, so it’s important to be computer-literate and proficient in data analysis and modelling software, such as Excel and SQL. These technological tools help to effectively analyse and interpret large and complex data sets.
- 2Excellent communication and interpersonal skills. Associate Actuaries are required to report to their actuarial manager. In addition to this, they will often need to present reports, reviews and findings to a non-technical audience. They may work with multiple other stakeholders such as the legal, finance and marketing teams who don’t have the mathematical and statistical background an actuary possesses. Strong writing and communication skills are required to break down complex, technical information into layman’s terms for these stakeholders.
- 3Ability to work independently and as part of a team. An Associate Actuary must have a can-do attitude and the ability to take ownership of projects. They will often need to learn on the job and work on projects they don’t have experience with yet, with their actuarial manager providing guidance where necessary. They are also required to give guidance and support to junior members of their team, which requires strong people and listening skills.
- 4Attention to detail and accuracy. Attention to detail is a very important skill for an Associate Actuary, as tiny errors in the data analysis stage can have a major knock-on effect when it comes to predictions and financial decisions down the line. Since Associate Actuaries are involved with the assessment of the solvency and financial stability of insurance companies, the accuracy of their work is of the utmost importance. This protects the company from insolvency and ensures all policyholders are covered in case a claim arises.
- 5Determination and commitment. The job of an Associate Actuary may be demanding. They must be able to work under pressure and adapt to changes in the field. The job demands working under tight deadlines and making quick and accurate decisions based on complex data. Only with the necessary discipline, will an Associate Actuary complete their studies and work-based skills.
Associate Actuary Career Path
The road to becoming an actuary may be demanding, but the salary and opportunities for advancement that come with being an actuary, make this role highly sought after. One step to becoming a qualified actuary is obtaining associate member status of the region’s professional body i.e. becoming an Associate Actuary.
The journey typically begins with a degree in a relevant field, such as mathematics, statistics, actuarial science, or economics. After graduation, aspiring actuaries can join the insurance industry as actuarial analysts. If they wish to become fully qualified actuaries, they must pass a series of professional exams. The actuarial exams are known to be challenging.
Depending on the professional body the aspiring actuary belongs to, there are different requirements to become an Associate member. This typically involves passing a series of technical exams and obtaining the relevant work experience. Specific examples for different actuarial bodies are provided below.
The career path for an Associate Actuary typically involves obtaining further actuarial credentials and gaining more experience in actuarial work. This may involve pursuing Fellowship status with an actuarial professional organisation and taking on more advanced actuarial roles with increased responsibilities.
In every professional body, whether that’s the Casualty Actuarial Society (CSA) or the Society of Actuaries (SOA), Actuarial associates are encouraged to continue their professional development throughout their careers by taking courses, attending seminars, and keeping up to date on other developments in their industry.
Here are the requirements to become an Associate Actuary for the professional bodies of the United Kingdom and South Africa:
Associate of the Institute of Actuaries (AIA) or Associate of the Faculty of Actuaries (AFA) - United Kingdom
In order to become an Associate member of the Institute and Faculty of Actuaries (IFoA) in the United Kingdom, you need to complete the following:
- Exams: the Core Principles subjects (CS1-2, CM1-2 and CB1-3*) and Core Practices subjects (CP1-3*) comprise a series of 10 exams that can be obtained either by examination or exemption. These exams cover subjects like Actuarial Statistics, Actuarial Mathematics, Risk Modelling, Financial Engineering and Business Economics.
- Work-based skills: Personal and Professional Development (PPD), which details the relevant work-based skills an aspiring Associate Actuary should obtain in the workplace. The three objective categories set the minimum standards you need to demonstrate in the workplace:
- Effective Communication
- Problem Solving and Decision Making
- Professionalism: Professional Skills Course, which is a professionalism course that is hosted online and uses case studies to explore concepts of professionalism, awareness of the Actuaries' Code, and business ethics.
*Further information on modules, including the syllabus and specimen papers, can be found here.
After passing the Core Principles (CP) exams, the next step towards Fellowship is passing the Specialist Technical (ST) component. The CP exams are usually more technical with a heavy mathematics and statistics workload. The ST subjects require a bigger understanding of the theory and the principles underlying insurance.
Associate Member of the Actuarial Society of South Africa (AMASSA) - South Africa
According to the Actuarial Society of South Africa (ASSA), the requirements to reach Associate Actuary status are as follows:
- The successful completion of a degree or equivalent qualification.
- Exams: Parts A1 (Foundation Technical), A2 (Intermediate Technical) and A3 (Core Principles) comprise a series of 10 exams that can be obtained either by examination or exemption. These exams cover subjects like Probability and Mathematical Statistics, Economics, Financial Mathematics, Finance and Financial Reporting, Actuarial Risk Management and Communications.
- Work-based skills: Part A4 (Associateship Normative Skills) includes the work-based skills that will assist in the development of a fully rounded and effective actuary. Work Based Learning (WBL) has the objective to narrow the gap between the theory (from the exams) and practice (the work environment) and provides the student with an opportunity to learn and develop skills in the working environment.
*Further information on modules, including the syllabus and specimen papers, can be found here.
Associate Actuary Job Description Template
We have also created an Associate Actuary job description pdf template outlining the key responsibilities, requirements, skills and qualifications for an Associate Actuary candidate. This may be useful for you if you are a hiring manager seeking to hire an Associate Actuary. This pdf template can be downloaded from here.
Download the Actuary Job Description Template Here
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