An actuary is a professional who evaluates the risks and benefits of various financial situations, particularly insurance programs. A chief actuary, in particular, supervises a team and analyzes financial expenditures at the highest levels of government or corporations. A large organization that forecasts the viability of various regional government investments is also referred to by the term.
In general, an actuary employs mathematical techniques to assess all possible outcomes of a financial system. Individual variables like mortality, property loss, and consumer choices, as well as the system’s complexity and method of operation, are all taken into account in these calculations. The actuary, in a sense, is the ultimate accountant, compiling a massive balance sheet of losses and rewards for large-scale projects. As a result, the actuary’s primary goal is to minimize loss — both financial and emotional — and thus the importance of insurance-related expenditures in the profession. Actuaries can also work as business managers, expert witnesses, and investment advisers, all of which are jobs that a chief actuary can do.
A corporate or government department’s chief actuary serves as an actuary supervisor. They are in charge of supervising and directing other actuaries as well as distributing and directing assignments. Other common responsibilities include the preparation of reports and the review of business functions such as budgets and mergers. A chief actuary also develops and implements actuary risk analysis policies and guidelines. On a daily basis, the head actuary may perform any of the analytical and research tasks that a typical actuary is responsible for.
The chief actuary departments of different regional governments are different. The Office of the Chief Actuary, for example, is the primary actuarial organization in the United States (OCACT). This organization oversees and forecasts financial trends in social welfare programs like Social Security and Supplemental Security Income (SSI). Chief actuaries assist in the creation of rules and guidelines for government insurance programs, just as traditional actuaries do. Representatives from the OCACT may collaborate with a board of trustees and congressional committees to develop financial strategies for the programs’ long-term sustainability.
A chief actuary’s primary responsibilities include research and analysis. The position conducts statistical demographic research among relevant affected populations and investigates various financing options for an expenditure, particularly those involving insurance. Actuaries then use all of this data to forecast the level of commitment required as well as the likelihood of a course of action’s success or failure. Recommendations may be given as well.
To enter this difficult profession, one must go through a long and arduous process. A prospective actuary must usually pass several exams, ranging from five to fifteen, to become certified, regardless of where they live. These exams demonstrate knowledge of economics, statistics, and corporate finance, among other subjects. Individuals must also complete a higher education program and be accepted into a fellowship program that will provide hands-on experience, and many regions also require membership in an actuarial society or academy. For government chief actuary positions, years of promotions are likely to be required, as well as political knowledge.