Actuaries working in finance work in many areas, including corporate finance and banking.
Corporate Finance
Although generally regarded as the province of the investment banker, actuaries can add value in this area. An actuary’s basic skills in forecasting and assessing risks are vital in this area. For example, they have the skills to estimate whether a capital project is financially viable. Employers might include government departments, management consultancies, or property companies specialising in this area.
Actuaries working in corporate finance may work in areas such as financial reporting, capital management and mergers and acquisitions.
If you are considering a career as an actuary, you may also be considering a career as a financial analyst. So what’s the difference?
The main difference between the two is that financial analysts deal with financial information, whereas actuaries deal with risk analysis.
In terms of qualifications, financial analysts will work towards becoming a Certified Financial Analyst, where as actuaries will work towards their IFoA qualification to become a qualified Actuary.
Banking
The demand for actuaries in the banking field is growing. As an increasing number of insurance companies have their own banking operations, many actuaries are now filling some of the senior roles in finance and risk.
Actuaries are now also found in retail banks, as many are recognising that the longer term approaches advocated by actuarial professionals can add value to their businesses. And, with insurance companies hedging their risks, there has been an increased demand for actuaries from investment banks that provide hedge products.
Some actuaries may move into financial analysis and work with a range of businesses. They may work in areas including regulations, markets and investments. Alternatively, actuaries can be used to measure the potential loss in an investment portfolio.
As the insurance and banking markets continue to converge, we can expect to see the demand for actuaries continue to grow.
