Actuaries - who are they? actuaries in insurance

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

The profession of an actuary is prestigious in the US and Europe. Such specialists are considered indispensable in various business areas. In Russia, this profession is not particularly popular, but this does not prevent organizations from actively using the services of actuaries in various areas of their activity. They are most in demand in the banking sector, insurance services, and pension funds are also actively using their services.

The actuary is a certified professional

Actuaries are specialists who have a higher economic or technical education, and also hold the relevant certificate of an actuary. In Russia, their activity is not one that needs to be licensed, so the certificate is issued on the basis of special exams. Not all candidates pass this type of value check. But by their successful completion, we can safely say that actuaries are specialists of the highest standard. They are carried out by the state oversight body.

You can say that actuaries are mathematicians who have certain skills,necessary for the calculation of insurance risks. In addition, actuaries can make calculations that allow drawing conclusions about the success of investing in certain assets.

An insurance company cannot do without such a specialist

An actuary in insurance is a specialist who performs calculations of insurance rates and insurance premiums. Probably, such specialists are most in demand in the field of providing insurance services, the cost of which is determined on the basis of the calculations of the actuary. In addition to the fact that actuaries are such professional employees who calculate the necessary reserves of the insurer, they can evaluate the investment project, as well as other calculations related to voluntary or compulsory insurance.

Such specialists are indispensable for insurance companies. Since an actuary in insurance is an employee who must be highly qualified, they are treated with special attention in the company, since it is quite difficult to find a professional.

Also, according to the legislation of the Russian Federation, insurance companies must submit reports on their obligations to the body supervising their activities. Such reports are based on calculations performed by actuaries.

Insurance actuary is not the profession you should choose if you don't know "excellent" mathematics and other exact sciences. The specifics of the work of such an employee lies precisely in the exact calculations thatneeds to be done every day. After all, an insurance actuary is a very responsible profession: due to incorrect calculations of insurance rates, such a company can simply be deprived of the right to engage in insurance activities.

When this profession appeared

The word "actuary" has Roman roots. This was the name in ancient Rome of a person who was engaged in keeping minutes during a meeting of the Senate. But this meaning of the word then became a thing of the past.

Actuarial activity in the modern understanding of the functions, duties and tasks of actuaries appeared in Great Britain at the end of the 18th century. At that time, it simply became necessary to mathematically correctly substantiate the level of certain sums insured that characterize certain risks in life insurance.

In 1762, the first actuarial company appeared. Due to the high demand for such specialists, this market has grown and developed. In parallel with the growth of the market, there was an increasing need to create an organization that would unite actuaries and control their work. This contributed to the establishment of the London Institute of Actuaries in 1848, and four years later, the Faculty of Actuaries in Edinburgh.

At the same time, already in 1895, similar societies in Belgium, Great Britain, Germany, France, and also the United States of America created a common International Association of Actuaries, the main headquarters of which is located in Brussels. This organization holds meetings every four years. They discuss the pressing problems of actuarial activity,practices, arrangements and functioning.

What tasks are set for such specialists

The tasks of the actuary are to carry out calculations in order to calculate suitable tariffs for insurance services. Suitable tariffs mean such a cost of the company's services that will cover all the risks of its activities, so that the level of solvency and financial stability are at the proper level, ensuring stability of work and timely settlement of obligations assumed.

An actuary is an employee who is able to provide answers to management personnel on all questions related to the cost of tariffs. For example, he must know the answer to the question of how the insurance premium will change if the deductible is increased to a certain level, and also “damage due to other circumstances” is removed from the list of insured risks. At the same time, he must have such a level of knowledge that will allow him to accurately recalculate the tariffs for any services of the organization related to insurance activities.

How to become an actuary

First of all, you need to get the appropriate qualifications. Actuarial training is expensive. A survey of employers abroad shows that their training costs are approximately £6,000 per year of study.

To become an actuary, an applicant must pass as many as 15 exams. In addition to paying for training, companies provide support to employees with training manuals and other materials that may be useful in masteringprofessions.

It is difficult to become an actuary in Russia

On the territory of the Russian Federation, not a single educational institution is engaged in the training of this particular speci alty. Basically, they hire a person who has a higher education and knows mathematics well. And then the companies themselves conduct training and educate an actuarial specialist in it.

You need to get a certificate from the Actuarial Society of Russia. Some pass exams of foreign guilds of actuaries, which allows them to confirm the level of their knowledge and successfully get a job in an insurance company or bank.

Self-regulatory organizations of actuaries (SROs of actuaries)

In order to monitor the activities of these specialists, non-profit organizations are created that supervise their work, and can also regulate relationships in the actuarial services market. In other words, self-regulatory organizations of actuaries, created as working associations, monitor the activities of such professionals.

Any such specialist must be a member of such an organization to carry out their professional activities.

What are the functions of SRO actuaries

The following main functions can be distinguished:

1. Development, approval and implementation of standards and rules that should guide actuaries in their professional activities.
2. Establishment of requirements and conditions for the admission of new members,membership fees, fines.
3. Protection of interests, as well as the rights of members of the organization before state authorities, courts and other proceedings.
4. Exercising control over the professional activities of members of the organization, their compliance with all the norms and procedures provided for by law.
5. Providing full informative follow-up for members.

What requirements should the SRO meet

The activity of actuaries in Russia is accompanied by an incompletely developed system of legal documents. That is why now the State Duma of the Russian Federation is considering a bill that will regulate the activities of actuaries. This legal document implies that a self-regulatory organization of actuaries must comply with the following requirements:

1. The organization has at least 100 individuals who meet all the requirements established by law.
2. A compensation fund should be set up to pay out claims by customers. Such a fund is formed exclusively from cash. At the same time, all members of the organization must make a mandatory contribution to it. The minimum contribution must be equal to 30,000 rubles. The maximum amount of payment for customer claims from the compensation fund should not exceed 600,000 rubles.
3. In such an organization there should be a clear structure, divisions, as well as a collegial governing body. The governing body mayto speak to the supervisory board.
4. The organization must apply in its work those actuarial standards that comply with and do not contradict the legislation of the Russian Federation.

Being a specialist and being able to calculate the cost of certain risks is a difficult profession. An actuary should have a good knowledge of the exact sciences and be able to solve complex problems associated with a large number of unknowns.