Education

Sunday January 13, 2008

Making financial sense

If you are a whiz at numbers and have a logical mind, you may want to consider becoming an actuary.

By KAREN CHAPMAN
educate@thestar.com.my

THOSE with a life insurance policy, pay an annual premium in exchange for the financial protection that an insurance company provides them.

Have you ever wondered who calculates the amount of premium you pay? An actuary.

This profession may be right for you if you like numbers and solving problems, and have a logical mind.

Malaysian Assurance Alliance Bhd vice-president (Actuarial and Strategic Planning) Serena Thio has always liked mathematics and statistics.

“I had considered going into either engineering or architecture. Then when I was doing my matriculation studies at Taylor's College, someone from a New Zealand university came to give us a talk on what actuaries do,” she says.

SERENA THIO: “The road to becoming a qualified actuary is long, but rewarding.”
The talk piqued her interest in the profession and she decided to study it at Macquarie University in Sydney, Australia.

“Becoming a qualified actuary is a long but rewarding journey,” Thio shares.

According to the Actuarial Society of Malaysia (ASM) website, an actuary can become a specialist in investment, pensions, life assurance and general insurance.

For life insurance premiums, actuaries build and use mathematical models based on statistical data to calculate the premium to charge policyholders.

Besides calculating premiums, actuaries also design insurance products, formulate investment strategies and estimate the amount of future claims by analysing past data or experience to assign probabilities to an event such as death or disability.

Students who are interested in finding out more about the profession can visit the ASM booth at the Star Education Fair today at B021, Hall 2, Kuala Lumpur Convention Centre.

My job involves ...

In the beginning there is a lot of number crunching, but as you progress it may make up about 10% to 20% of what actuaries do.

The rest of my time now involves trying to make conclusions and decisions based on numerical analysis and to effectively communicate them to non-actuaries.

But my early experience has been important because it provides me with the necessary expertise to view things from a “big picture perspective” and to make effective decisions.

I also do a lot of financial analysis in order to advise shareholders and management on the pros and cons of various corporate strategies.

To qualify, you need ...

... a degree. Although a qualification in Actuarial Science will give students a head start, those with degrees in Commerce and Finance can also become actuaries.

There are also accountants and engineers who are now actuaries.

It depends on a person's interest. It can take from five to 15 years, but even if you don't pass all the papers or decide to stop half way, your training will not be wasted.

You can still go into other fields or opt for financial careers which require the same analytical and problem-solving skills that actuarial students are trained in.

Prospects for the future ...

... are wide as there is a shortage of actuaries in the country.There are about 50 actuaries registered with the Actuarial Society of Malaysia.

Actuaries aren't limited to working in life insurance or consulting firms. They can opt to go into many areas, including investment and financial services, the government sector (such as Bank Negara), or lecture.

They can also become risk managers or investment bankers.

I love my job because ...

There is job satisfaction because I am doing something I am interested in and getting paid for it, too. Now that's a bonus.

It also helps when your work is appreciated by the management.

This profession keeps me mentally alert and there are many challenges too.

What I dislike most about my job ...

In the early part of my career, I did not enjoy sitting for the actuarial examinations as it was a challenge balancing a career, personal life and trying to squeeze in time to study.

Now, it can be frustrating sometimes trying to get your point across to non-actuaries. But overall, I have no regrets.

Will I be a millionaire by 30?

Actuarial graduates do get a premium salary as there is a shortage of actuaries.

Graduates can earn between RM2,200 to RM3,000 for a start, depending on their educational background and how many professional examinations they have cleared in university.

As graduates work towards becoming qualified actuaries, they have to continue to pass certain examinations.

Most companies do provide study leave. If they pass, they often receive not just a cash incentive but also an increment in salary as they become more knowledgeable and are able to take on more responsibilities.

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