„Actuaries are business professionals who deal with risk and uncertainty. Hence, it is required that they have knowledge of probability and statistics. This is very often heard as the basic definition of what we do.
However, the background story is much more complex, bears much more responsibility, but it is also much more beautiful.
To assess the risk and uncertainty in companies, especially within the financial industry, actually means to estimate how much a certain business decision or decisions will financially cost the company, including the financial consequences such decision will have on the current business already in progress.
In order for an actuary to stand behind his opinion and, consequently, for the company management to be sure that their future business decisions based on the ‘risk and uncertainty assessment’ lead to a financially stable and secure business results as well, and that the company operates sustainably on the long run, the actuary must have specific knowledge that allows him to estimate and predict this uncertainty well. This brings us to the before mentioned specific knowledge of probabilities and statistics.
Such a role is extremely responsible because it directly affects the financial position and stability of the company. Therein lies the beauty of our profession. The creativity of analytical thinking regarding the risk and its deep understanding comes to an exceptional level and opens a very special world of our profession.
However, like everything else, the actuarial science is experiencing technological changes. Data are always important for stable statistical analysis and calculations. In the past, data were ‘expensive’ i.e. it was difficult to obtain data information, especially sufficient amount of data required, which is important from the perspective of statistical reliability.
Today, as we live in a digital environment, accessing data is much easier and almost free. In addition, there is a large amount of data available which makes quick processing and statistical analysis, in a way that you can interpret results in a meaningful way ,quite challenging. And even more importantly, the challenge also lies within the choice of a method of an analysis that has to provide the reliable information you are looking for.
Therefore, the term ‘data science’ is increasingly associated with actuaries, pushing the actuaries to strive for new knowledge of advanced methods of data processing and analysis, and especially the interpretation of the obtained results.
Hence this exciting profession, which at first glance looks like it’s changing slowly, has a very interesting and dynamic future.
Therefore, remember this: when you meet an actuary, be careful what you are saying because he is always processing information and predicting the future 😉 “.