The actuarial world can be subdivided into different fields. Some are traditional, while others are non-traditional. Basically, actuarial science can be applied to any field that has an element of risk associated with it. Here’s a brief overview of some of them.
Health Insurance: Actuaries help develop long-term care and health insurance policies by predicting expected costs of providing care under the terms of an insurance contract. Their predictions are based on factors such as including family history, geographic location, and occupation.
Life Insurance: Actuaries help develop annuity and life insurance policies for individuals and groups by estimating, on the basis of risk factors such as age, gender, and tobacco use, how long someone is expected to live.
Property and Casualty (P&C): Often associated with cars and homes insurance, actuaries in P&C help develop insurance policies that insure policyholders against property loss and liability resulting from accidents, natural disasters, fires, and other events. They calculate the expected number of claims resulting from automobile accidents, which varies with the insured person's age, sex, driving history, type of car, and other factors.
Reinsurance: Occurs when multiple insurance companies share risk by purchasing insurance policies from other insurers to limit their own total loss in case of disaster. Actuaries in reinsurance are given tasks such as designing and evaluating pricing methodologies, monitoring portfolios, and many more.
Investment Consulting: Actuaries provide investors with investment products, advice, and/or planning. Investment consultants do in-depth work on formulating investment strategies for clients, helping them fulfill their needs and reach their financial goals.
Pension Consulting: Actuaries provide advices and information on retirement provision to other organizations and advise on the best form of pensions provision for the organization as a whole to provide to its employees.
Health and Benefit Consulting: Actuaries advise business clients on insurance, employee benefits, and other products. A benefit consultant may focus on a particular type of benefit, and can provide a range of advice on selecting, purchasing and administering benefits. Check out the MASSA Podcast episode on health and benefit consulting here!
Pension and Retirement Administration
Actuaries are required by law to certify the valuation of the pension plan’s liabilities. As part of this function, they must develop appropriate assumptions for life expectancy, future returns on invested assets, future changes in salaries, and other factors. They may also provide recommendations to the plan sponsor on funding strategies, or complete contribution calculations for the plan.
Check out the MASSA Podcast episode on the investment field here!
Investment banking: Actuaries will help with corporate finance needs, such as assessing how much risk is attached to each merger, acquisition or investment in stocks and hedge funds. They need to determine the liability risk involved in any investment strategy design and products to minimize and manage such risks.
Investment management: Actuaries perform financial analysis, portfolio allocation between bonds and stocks, equity research, and issue buy and sell recommendations to help clients manage their money. Clients can include individuals, educational institutions, insurance companies, and pension funds.
Enterprise Risk Management
Actuaries identify any risks, including economic, financial, and geopolitical risks that may affect a company's short-term or long-term objectives. They help top executives determine how much risk the business is willing to take, and they develop strategies to respond to these issues.
Wealth Management and Financial Planning
Contribute skills and expertise to wealth management firms and individuals (rather than to insurance companies).
Please note that the description for each actuarial field is an overview. There are a lot more actuarial positions that are available based on different companies.