Actuaries provide businesses with valuable information with which to make secure, long-term strategic decisions, as well as providing practical solutions to problems involving the impact of uncertain events.
An actuary’s role in today’s business and public sector is to analyse risk and construct financial models to predict financial outcomes. Results of any analysis are then communicated to management or a board of directors through presentations or formal actuarial advice. Distilling a piece of complex analysis into key insights and recommendations for a business is the value that an actuary can add to an organisation.
The Ministry of Social Development employs actuaries to look at an ‘investment approach’ for funding New Zealand’s social benefits.
Actuaries can also play an important role in pensions and superannuation, providing advice in both the accumulation of funds before retirement and the decumulation of funds during retirement. Some actuaries also provide advice to value assets for matrimonial settlement, mergers and acquisitions or other asset valuations where the future cashflow stream is uncertain.
Most actuaries, however, do work in the financial services industry. They may be employed in roles responsible for: pricing and product design; reserving or valuation of an insurer’s insurance liabilities; enterprise risk management; data analytics; reinsurance and capital management or strategy.
Under the Insurance (Prudential Supervision) Act 2010, all insurers practicing in New Zealand must have an Appointed Actuary to provide advice on matters such as claims reserving, solvency and financial condition. There are a number of responsibilities placed on each Appointed Actuary to ensure that insurers have sufficient reserves to protect policyholders in the event of a catastrophe or a financial crisis.