“The path less taken” and the tools needed
Actuarial Science’s near mythical (and often notorious) status as a path of study and career is well-chronicled. In this article series I will discuss various aspects of the discipline; from the paths of study to career outlook; evolution and sustainability of the occupation, and the more unique aspects of the discipline.
When it comes to requirements, the career has become renowned for attracting some of the most mathematically astute and analytical thinkers the world has to offer. It is also considered one of the most rigorously demanding training regimens in any professional career, and usually demands a significant amount of training time throughout a candidate’s formative years. In contrast, the work environment itself is a lot less pressured, and often ranks among some of the best workplace environments worldwide.
But what is an Actuary?
The Actuarial Society of South Africa (ASSA) definition sums this up pretty well:
“An actuary is a professional who applies analytical, statistical and mathematical skills to financial and business problems. This is especially valuable when facing real-world problems that involve uncertain future events:
- Financial risk such as calculating the price an insurer should charge customers for various insurance benefits
- Understanding the impact that different investments have on a pension fund’s expected risk and return
- Calculating a bank’s risk due to home-loan customers being unable to repay their mortgage debt.
This ability to quantify that which is unclear helps individuals and businesses to safeguard their future, confidently and at a fair price, in an ever-changing world.
They are able to provide realistic solutions to complex problems with a long-term forward view. They are recognised to be pragmatic, innovative and numerate. Actuaries operate within a strict professional and ethical framework, advancing equity across all stakeholders and promoting the public interest.”
Starting off with what is a foundational trait; mathematical aptitude. My first year Actuarial Science lecturer in my formative days at Wits discussed the view that being mathematically adept was only a partial view of the picture. He used the analogy of an athlete. In order for the athlete to perform for extended periods of time, they would need to be fit. In a similar vein; mathematical ability can be considered your “mental fitness”. Elite athletes wouldn’t get to where they are with simply fitness alone. Talent is thus an important ingredient. The talent in this case is drawn from critical thinking and natural problem-solving ability. Each aspect relies on the other. Fitness and talent operate in tandem to maximise the realisation of potential.
The academic barriers to entry are fairly high with most formal university programmes in the country seeking candidates with an A or “high B” in Mathematics and Physical science, along with a (recommended) strong grasp of language and comprehension (B or higher). The programme consistently ranks amongst the highest requirements in terms of APS/Entry Points scores at universities who offer it.
When it comes to qualifying as an actuary, there is more than one way to ‘skin a cat’. The first is the university route, which is the most direct. The second is to become a student member of a professional body. These include:
- Actuarial Society of South Africa (ASSA) in South Africa
- Society of Actuaries (SOA) in North America
- Institute and Faculty of Actuaries (IFoA) in the UK
Membership is conditional on meeting their entry requirements, usually a high 2nd class pass (>65%) in Mathematics 1, Applied Mathematics 1 or Statistics 1 at university level, or a mathematically-orientated degree.
In the first instance you will enter a programme at a university and obtain an undergraduate qualification with a major in Actuarial Science and Statistics. Statistics plays an essential role in developing your critical thinking and forecasting skill set which are considered to complement the mainline Actuarial Science course. What makes this the most direct route is the number of exam exemptions that you can obtain from passing modules within the undergraduate and honours programmes.
ASSA has recently restructured the local actuarial curriculum containing roughly 14 qualifying examinations. Exemption can be obtained from a number of South African institutions (number of exemptions in brackets):
- University of Cape Town (11)
- University of Witwatersrand (11)
- Stellenbosch University (11)
- University of Pretoria (11)
- North-West University (8)
- University of the Free State (8)
- University of Johannesburg (3)
Obtaining a high number of exemptions will reduce the number of exams that you will need to write on completion of your university studies. Hence why this is considered the most direct route.
The second alternate route is open to individuals in other careers. You can join the actuarial profession and write the examinations with any mathematical-based degree. It is the most onerous, because you will have to take all 14 examinations and obtain sufficient work-based skills (more on that later in the article series) in tandem.
The quickest time taken theoretically is 5-6 years from the time of leaving school, but on average it takes roughly 8-10 years to qualify as a Fellow – possibly longer for some.
The North American Actuarial Authority (SOA), has less examinations, but they still cover similar bodies of content over a smaller number of written exams. The IFoA (UK) has a very similar curriculum to ASSA’s (SA) local structure, and cross-exemptions are available between various international actuarial societies.
Part 2 of this article series will discuss the training, work-based skills and various designations that those within the actuarial discipline can obtain.
For more information; the following links will provide some further insight into entry and training: