Is an Actuary a Technical Job?

Someone asked if I was sure what a technical job was. But, to be an actuary, you need a solid foundation in mathematics and a bit of programming knowledge. As your career progresses, the requirement for extensive mathematical skills may diminish, but the technical aspects remain.

Mathematics as the Foundation

Actuarial science is fundamentally a mathematical field. Actuaries must be proficient in advanced mathematical concepts, such as statistics, probability, and calculus. This strong mathematical foundation is crucial for understanding and modeling the financial risks associated with life, health, and property insurance, pensions, and other financial products.

Programming Skills and Scripting

While a solid grounding in mathematics is essential, actuaries also need programming skills and database knowledge. The ability to write scripts and manipulate large datasets is becoming increasingly important as companies rely more on digital solutions for analyzing and predicting future outcomes.

Consider a scenario where an actuary is responsible for converting a highly normalized database model created by IBM into a more normalized but still complex model. This involves a detailed data marshalling process and ensuring that all the data is properly aligned. This task requires a combination of database management, data conversion, and programming skills.

Real-World Applications

One of the best projects I've ever worked on involved translating a hyper-normalized IBM database model into a more manageable, normalized model. The model originally required joining 10 tables together to answer simple questions like 'How many quotes does sales agent A have in the active status right now?' This was a challenging task that required a deep understanding of both the database structure and the underlying business logic.

To make this query more manageable, my role as a software engineer was to break it down into something that could be handled more efficiently with only 3 joins. This task involved not just technical skills but also a deep understanding of the business requirements.

The Role of Technology in Actuarial Science

The use of technology in actuarial science is growing rapidly. Actuaries now use advanced software tools and programming languages to analyze vast amounts of data, develop risk models, and make predictions about future financial trends. This shift towards technology has made the actuarial profession more about problem-solving with code and less about manual number crunching.

Companies are leveraging the power of artificial intelligence (AI) and machine learning (ML) to improve risk assessment and decision-making. Actuaries who can work with these technologies are in high demand. They must be able to understand the nuances of the algorithms and how they can be applied to solve specific business problems.

Conclusion

So, is an actuary a technical job? Absolutely! While the role requires a strong mathematical foundation, it also demands programming skills, database management expertise, and the ability to work with modern software tools. The technical aspects of the job are becoming increasingly important as the field evolves to incorporate more data-driven approaches.

An actuary who can bridge the gap between mathematical theory and practical applications in a technical environment is well positioned for success in the modern financial world.