The Actuarial Science industry is an ideal choice for those who are passionate about risk analysis and able to provide solutions to potential future issues.

What is Actuarial Science?

Actuarial Science is a specialised field that evaluates financial risks in the insurance and finance sectors, utilising mathematical and statistical methods. Actuarial Science applied probability and statistics to identify, analyse, and solve the financial impacts of uncertain events that may occur in the future for individuals, organisations, or companies.

What will you study in the Actuarial Science field?

To become an expert in Actuarial Science, you need at least a Bachelor’s degree. The most direct path is to major in Actuarial Science at the undergraduate level, delving into mathematics, statistics, and related subjects such as finance and economics. However, other quantitative majors such as Economics, Computer Science, and Physics can also provide a strong foundation for a future in Actuarial Science.

Fundamentally, any major that includes coursework in mathematics, statistics, business, management, accounting, economics, finance, and computer programming can help prepare you for the Actuarial Science field. Courses that students should take include:

• Mathematics
• Statistics
• Financial Mathematics
• Mathematical Research Methods
• Probability
• Auditing
• Macroeconomics
• Microeconomics

What do you need to prepare to start studying Actuarial Science?

In addition to classroom learning, obtaining certification from the Society of Actuaries (SOA) or the Casualty Actuarial Society (CAS) is required to become an expert in Actuarial Science. These organisations manage a series of exams covering topics such as economics and finance, mathematical analysis, probability, statistics, and interest theory.

These exams are held twice a year in May and November. As passing rate is very low (around 40%), students need to excel in classes and carefully study the materials before taking the exam. Taking additional online courses on platforms such as Coursera is highly recommended.

Are you a good fit for the Actuarial Science field?

Strong analytical and logical skills

To become an Actuarial Science expert, you need to have strong analytical skills because your role involves examining complex data and identifying future trends to determine which factors are responsible for potential risks. After assessing and considering the importance of these factors, Actuaries will seek to minimise the likelihood of unwanted outcomes or the cost of eliminating unwanted outcomes.

Excellent teamwork and communication skills

Actuaries often collaborate with various colleagues in departments, including programmers, accountants, and senior managers, which requires you to communicate and work effectively in a team. Strong presentation skills allow you to explain complex technical and statistical details to various audiences, while solid writing skills ensure that your findings and solutions are presented clearly in reports.

Schools offering Actuarial Science programs

Currently, Actuarial Science programs are available at many universities in several countries around the world. Depending on your level of education, the specific areas of Actuarial Science you want to focus on, and your personal financial and competency requirements, you can choose a suitable course and destination. Here are some reputable universities in the United States, the United Kingdom, Australia, and Canada that offer Actuarial Science programs to consider:

• Dalhousie University
• Queen Mary University of London
• UNSW Sydney
• Central Connecticut State University
• University of East Anglia UEA
• University of York
• DePaul University

What can graduates in the field of Actuarial Science do upon completion of their degree? 

According to the US Department of Labor, an Actuary uses mathematics, statistics, and financial theory to evaluate the risk associated with potential events. By doing so, they can help businesses and customers develop cost-saving policies and strategies to minimise risk.

• Analysing statistical data and related information.
• Estimating the probability and economic cost of events such as death, illness, accidents, or natural disasters.
• Designing, testing, and managing insurance policies, investments, retirement plans, and other business strategies to minimise risk and maximise profit.
• Creating charts, tables, and reports to explain calculations and propose solutions.
• Explaining findings and proposed solutions to company executives, government officials, shareholders, and clients.

Aside from becoming an Actuary, graduates with an Actuarial Science degree can also consider the following career paths:

• Financial Planner: This job involves helping individuals and corporations achieve their long-term financial goals. Financial planners carry out their work by consulting with clients to analyse their objectives, risk tolerance, and then determining the appropriate type of investment for them. From there, they can set up a program to assist clients in achieving these goals by allocating their existing savings into a portfolio of investments designed to grow or provide income, as desired. Financial planners may also specialise in tax planning, asset allocation, risk management, and retirement planning.
• Business Analyst: Business analysts (BAs) are responsible for bridging the gap between the IT Department and businesses by using data analytic tools to evaluate processes, define requirements, and provide data-driven recommendations and reports to executive management and stakeholders. You will engage with business leaders and end-users to understand how data-driven changes to processes, products, services, software, and hardware can improve efficiency and add value to services. You must articulate those ideas but also balance them with the financial risks and technological feasibility.
• In addition, you can also choose a career path as a Risk Analyst, Investment Analyst, and so on.

Overall, there are abundant opportunities available for graduates with Actuarial Science degrees. Your task is to explore which career paths are most aligned to your interests, aptitudes, passions, and capabilities to guide your choice of an appropriate major.

Actuarial Science in Vietnam

Recently, the National Economics University in Vietnam announced that starting in 2018, the school will begin recruiting for the first batch of students to enrol in their new Actuarial Science program, which focuses on insurance pricing and risk management. The introduction of this new program in Vietnam is expected to help address the issue of heavy reliance on foreign personnel for these specific skills and contribute to the country’s labor market.

There is a shortage of Vietnamese actuaries

Insurance actuaries are regarded as a sought-after profession in the finance and insurance sectors. The work of actuaries involves the use of mathematical models, probability theory, and finance to analyse and calculate risks. In insurance companies, actuaries perform two primary roles – price insurance products and calculate the company’s payment ability for insurance contracts, and reserve for insurance activities. After participating in designing insurance products that meet the needs of different customer segments, actuaries rely on scientific calculations to price the product, taking into account the clients’ rights and benefits in the event of an occurrence and ensuring the insurance company’s profit-making ability. Actuaries take responsibility for the products they create and must calculate how the company can meet the payment obligations under various insurance contracts and ensure the appropriate level of reserves are available for other activities. In addition to the insurance sector, career opportunities for insurance actuaries are vast, including retirement planning, risk management in financial institutions, investment banking, mergers and acquisitions of financial or insurance companies, and more.

Actuarial science is a profession that requires high-level specialised skills, and it is a highly paid profession. In the United States, it is the second highest-paying profession on the list of top 10 most attractive and high-paying professions in the country, with an average salary of around USD 103,000 for insurance actuaries. However, even in the United States, the actuarial profession is highly competitive, and there is a shortage of professionals in this field. The shortage is so severe that actuarial science is categorised as a priority immigration profession in some countries in Europe, the United States, Canada, and other developing countries such as Australia.

In Vietnam, experts in actuarial science have only recently started to contribute their skills to the insurance sector. However, the labor market in this field is still insufficient. Currently, the number of actuarial experts with international accreditation in Vietnam is extremely limited, and actuarial positions in insurance companies are mainly staffed by foreigners. In particular, for non-life insurance companies, the new regulations on actuarial standards have made the shortage of actuaries in this field even more severe. A short-term solution for insurance companies is to recruit qualified actuaries from the Southeast Asian market after the formation of the ASEAN Economic Community in 2016, which includes free movement of skilled labor, among others.

The actuarial profession requires high standards

It is not an easy field, given the high demands placed on education and work in this area. To become a skilled actuary, one must excel in mathematics and be highly sensitive to numbers, as well as aware of changes in the market, and quickly grasp the psychology of customers. Prospective students can pursue this field if they have a passion for mathematics and achieve high scores, sensitivity to numbers, good abstract thinking skills, and accurate analysis skills. Furthermore, this field requires good English skills, the ability to work independently, and a willingness to learn and a strong sense of responsibility.

Up until now, Vietnam has not had a workforce that has been trained and graduated domestically in actuarial science. The majority of the workforce in this field comes from returning international students. However, just graduating from a university with a major in actuarial science is not enough. To become an official actuary, candidates can continue to take exams and become certified by actuarial associations around the world such as the Society of Actuaries (SOA), the Canadian Institute of Actuaries (CIA), or the Institute of Actuaries of Australia (IAA). For example, if you choose to take the CAS certificate, you must pass 7 exams. Or if you choose to take the SOA certificate, you need to pass 5 exams. Mr. Le Thanh Nam, one of the first two Vietnamese people to receive an F.S.A. (Fellow of the Society of Actuaries) degree and became a member of the American Actuarial Association, the largest actuarial association in the world, said he had to pass  difficult exams, with only about 30- 40% of people passing each exam! This shows that pursuing this profession is a difficult path, and success requires true perseverance and effort.

Before the National Economics University opened the actuarial science and risk management majors, as has just been announced, there was only one institution in Vietnam, the Institute of Financial and Insurance Science (I.S.F.A) – part of the Claude Bernard Lyon 1 University (France), linked to the Hoa Sen University and National Economics University in Hanoi to train experts in actuarial science and finance. Students study for 2 years in Vietnam and the final year in France.

By VINH PHAN, Practice Leader of Executive Search & Board Services

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