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An actuary weighs the risks and benefits of various financial situations, particularly insurance programs. More specifically, a chief actuary serves as a supervisor for a team and usually analyzes financial expenditures on a high government or corporate level. The term also often refers to a large organization that predicts the viability of various regional government investments.
Generally speaking, an actuary uses mathematical methods to evaluate all possible outcomes of a financial system. The system’s complexity and method of operation is strongly considered in these calculations, as are individual variables like mortality, property loss, and consumer choices. In a sense, the actuary is the ultimate accountant, creating a sprawling balance sheet of loss and rewards on large-scale projects. As such, the actuary’s main goal is to reduce loss — both financial and emotional — to its minimal level, and thus the prominence of insurance-related expenditures in the occupation. Actuaries also serve as business managers, expert witnesses, and investment advisers: all roles which a chief actuary may undertake.
Chief actuaries act as an actuary supervisor for a corporate or government department. They oversee other actuaries and distribute and direct assignments. The preparation of reports and review of business functions like budgets and mergers are other common responsibilities. Further, a chief actuary designs and implements policies and guidelines relating to actuary risk analysis. Day to day, the head actuary may perform any of the analytical and research duties required of a typical actuary.
Different regional governments have different chief actuary departments. The primary actuary organization in the United States, for example, is the Office of the Chief Actuary (OCACT). This organization manages and predicts financial trends related to social welfare programs such as Social Security and Supplemental Security Income, or SSI. Just as traditional actuaries help set insurance guidelines, chief actuaries assist in creating rules and guidelines for government insurance programs. Representatives from the OCACT may work with a board of trustees and Congressional committees to devise financial strategies for sustaining these programs.
Research and analysis are the main skills required of a chief actuary. The position performs statistical demographic research among relevant affected populations and studies various financing options for an expenditure, especially insurance-related expenditures. Actuaries then use all of this information to predict the commitment required and the potential success or failure of a course of action. Recommendations may also be given.
One must complete a long and arduous process to enter this challenging profession. Regardless of the regional location, a prospective actuary must usually complete several exams to become certified, ranging from five to fifteen tests. These exams demonstrate competency in several relevant fields, including economics, statistics, and corporate finance. Individuals must also complete a higher education curriculum and be accepted into a fellowship that will allow hands-on experience, and many regions require membership in an actuarial society or academy as well. A chief actuary obtainment will likely involve years of promotions, supplemented by political knowledge for government chief actuary jobs.