Hi, Welcome.
Hi, I'm Jason Lim, welcome to my site.
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What is actuarial science?
In the era of increased automation and globalization today, risk is everywhere at anytime. Let it be operational risk, financial risk, mortality risk, competing risk or technological risk, their presence is inevitable but to be properly assessed and managed. Here is how actuarial science could come into play.
Actuarial science is a discipline that utilises mathematics, probability and statistics to predict the likelihood of future undesired events and to assess risks. Professions who are qualified in this field through a series of rigorous examinations and trainings are known as actuaries.
Where could the actuarial skill sets apply?
1. Insurance
Insurance industry is always the main employer of actuaries. Having the specialties of mortality analysis, statistical modelling and risk management, actuaries are hired to perform the following tasks in general:
- insurance pricing
- stochastic asset- liability modelling
- provide estimates for unpaid claim liabilities and unearned premium
- determine the proportion of company’s profits that have to be set aside as technical reserves
- construct mortality life tables
​2. Banking
Actuaries are trained to have exceptional numerical skills, high level of statistical reasoning, superb computer proficiency and strong communication ability.
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Furthermore, the essential knowledge of quantitative finance in investment banking such as Value- at- risk (VaR), time series modelling, portfolio theory, Brownian motion, future cash flow projection, and martingale, just to name a few are taught in the actuarial syllabus.
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The general roles that actuaries play in banking are:
- Quantitative trading
- Product management and pricing
- Financial risk modelling (credit risk, market risk, retail risk, operational risk)
- Risk management