5 non-traditional career paths for actuaries

October 15, 2024

Estimated Reading Time: 7 minutes

Actuaries are renowned for their analytical skills, statistical expertise, and ability to assess and manage risk. While the insurance, pension and consulting industry have traditionally been the primary employers of actuaries, the evolving business landscape offers exciting opportunities for these professionals to apply their skills in diverse and unconventional fields. This article explores five non-traditional career paths that actuaries might consider to broaden their horizons and leverage their unique skill set:

  • Data Science and Analytics

  • Risk Management in Non-Financial Sectors

  • Technology entrepreneurship and Insurtech

  • Health Technology and Biostatistics

  • Public Policy and Social Impact

Since examples are often more impactful than concepts, let's start by highlighting some non-traditional roles for actuaries before diving into the five specific categories. A growing area for actuaries is in Big Tech and InsurTech companies such as Tesla, Waymo, Uber, Root, DoorDash, Grab, PayPal, DeFi platforms like Re and CavalRe, Lyft, Lemonade, and Trov. Other non-traditional industries include HR analytics, alternative reinsurance structures, and innovative finance options such as catastrophe bonds and insurance-linked securities (ILS). Actuaries are also making strides in emerging fields like climate change modeling, microinsurance, banking, quantum insurance, behavioral finance, and cyber risk analytics. Additional examples include complexity science, the sociology of risk, the philosophy of insurance, quantitative finance, and niche areas like econophysics (the intersection of physics and economics), which are increasingly relevant for large real estate companies, construction firms, and utility providers. Some further examples are:

  • Director of Analytics for Clinical Intelligence helping hospitals to analyze their data to improve the quality of care offered, business processes and revenue1

  • Founder of an insurance research and advisory company offering subscription research, customized analysis by client request, and insurance education

  • Actuarial manager for Hertz hire car company that self-insures for general and auto liability and also workers compensation in some areas2

  • Chairman and CEO of a minor league baseball team analyzing baseball statistics, communicating effectively with non-technical people including helping players improve their game

  • Software Engineer applying predictive analytics to enhance internet of things (IoT) related products2

  • Strategy manager for Expedia travel agent applying business intelligence to boost online sales of optional travel insurance. Also working with insurers to develop travel insurance products to meet the needs of worldwide customers

  • Data scientist supporting and developing products and services that help track and anticipate the social and economic repercussions of infectious diseases

  • Director of Insurance and Safety Analytics for Uber Technologies

  • Chief actuary for Google covering their corporate risk, credit card product for advertisers and other quantitative risk projects such as insurance and liability research for self-driving cars, predictive modelling for fraud and vendor risk, demand modelling, and operational research

Chief Innovation Officer for a start-up specialist actuarial company offering insurers and pension funds advice, tender management and sourcing models for their insurance risk pools

  1. Data Science and Analytics

With the explosion of big data and the growing demand for predictive analytics, actuaries are uniquely positioned to transition into the field of data science. Data science involves extracting insights from large datasets to make informed business decisions, something actuaries already excel at through their work in risk modeling, forecasting, and statistical analysis.

Data science and analytics is a fit for actuaries because:

  • Advanced Analytical Skills: Actuaries are skilled in statistics, probability, and modeling, all core components of data science.

  • Problem-Solving Mindset: Actuaries have a strong ability to analyze complex problems, making them ideal for roles that require finding solutions using data.

  • Technology Proficiency: Many actuaries are proficient in programming languages like Python, R, and SQL, which are commonly used in data science.

  • Professional ethics requirements means that chances of data and analytics being used against the interest of consumers might be limited.

  • In this field, actuaries can work across industries such as healthcare, retail, e-commerce, manufacturing and finance, providing insights into customer behavior, market trends, and operational efficiencies.

As the world becomes increasingly data-driven, actuaries are well-positioned to transition into the field of data science and artificial intelligence. Their strong background in statistics, probability, and predictive modeling aligns closely with the skills required in this rapidly growing field.

In this role, actuaries can:

  • Develop machine learning models for various industries, from finance to healthcare

  • Create predictive algorithms for business decision-making

  • Analyze big data to uncover patterns and insights

  • Contribute to the development of AI-driven risk assessment tools

Companies like Google, Amazon, and countless tech startups are seeking professionals with actuarial backgrounds to enhance their data science teams. This career path allows actuaries to be at the forefront of technological innovation while applying their analytical skills to solve complex problems across various industries. For example, actuarial and analytical team at Uber led by the CAS president Frank Chang FCAS.

Transforming Insurance Industry with Actuarial Automation

Embark on a journey with Visionet to transform your strategies and embrace the limitless possibilities of Actuarial Automation. Dive into our white paper and discover how you can embrace efficiency, innovation and ensure adherence to regulatory standards. Download white paper: The Rise of Actuarial Automation Whitepaper - Visionet

  1. Risk Management in Non-Financial Sectors

Risk management is a natural extension of actuarial work, but actuaries can expand beyond traditional finance and insurance roles to help non-financial organizations manage risk. Companies in industries such as manufacturing, energy, and technology need professionals who understand how to quantify and mitigate risk in areas like supply chain management, cybersecurity, and climate change. Sky is the limit here from supply chain analytics to working for airline industries, energy companies, retail companies and so on.

Risk management in non-financial sector is a fit for actuaries because:

  • Risk Assessment Expertise: Actuaries are trained to identify, measure, and manage risk, which is valuable in any industry facing uncertainty.

  • Regulatory Knowledge: Actuaries are familiar with regulatory requirements, making them well-suited for helping companies comply with evolving regulations in risk-prone industries like energy and technology.

  • Quantitative Skills: The ability to use mathematical models to predict outcomes is crucial for making informed decisions in areas like operational risk, strategic risk, and environmental risk.

Actuaries can work as chief risk officers (CROs), enterprise risk managers, or risk consultants in industries that face operational, reputational, and environmental risks.

With climate change becoming an increasingly pressing global issue, the demand for professionals who can assess and manage environmental risks is growing. Actuaries, with their expertise in long-term risk modeling and financial impact assessment, are uniquely qualified to contribute to environmental risk management.

Potential roles in this area include:

  • Climate risk analyst for investment firms or governments

  • Environmental impact assessor for corporations

  • Sustainability strategist for multinational organizations

  • Consultant for green energy projects

Actuaries in this field might work on projects such as modeling the financial impact of rising sea levels on coastal real estate, assessing the long-term viability of renewable energy investments, or developing risk mitigation strategies for agricultural businesses facing climate-related challenges. Examples can be micro insurance actuaries working on index insurance which sets pre-determined triggers based on satellite data and simulations to cover vulnerable communities. Actuaries can also work in ESG reporting for insurers which cover Economic, Social and Governance (ESG) aspects which includes climate action taken by insurers too.

  1. Technology entrepreneurship and Insurtech

The technology sector is rapidly transforming traditional industries, including insurance and finance, with innovations in artificial intelligence (AI), machine learning, and blockchain. Actuaries, with their strong background in mathematical modeling and risk analysis, are well-positioned to contribute to these innovations. Specifically, the rise of insurtech, technology-driven innovations in the insurance industry, offers exciting opportunities for actuaries to drive change and lead product development.

Technology entrepreneurship and insuretech is a fit for actuaries because:

  • Tech-Savvy: Actuaries are familiar with statistical tools and coding languages, making them adept at understanding AI algorithms and machine learning models.

  • Product Development: Insurtech companies need actuaries to design innovative insurance products that use real-time data and predictive analytics.

  • Regulatory and Compliance Expertise: As technology pushes the boundaries of traditional insurance models, actuaries play a key role in ensuring that products meet regulatory standards and appropriately manage risk.

Actuaries in this field might work for startups developing new insurance products, or larger companies incorporating AI, blockchain, and IoT (Internet of Things) into their risk models and product offerings. Actuaries are also working in DeFi Centralized Finance to insure crypto assets over Web3.0 and metaverse in startups like actuaries working on crypto insurance in OneDegree in Hong Kong.

Entrepreneurship is an exciting and non-traditional career path for actuaries who are ready to step out of the corporate world and leverage their skills to start their own ventures. Whether launching a consulting firm, creating a tech-driven insurance product, or founding a data analytics company, actuaries have the analytical mindset and business acumen to succeed in entrepreneurship. Many successful actuarial entrepreneurs have gone on to create insurtech companies, risk management software platforms, or even social enterprises aimed at solving complex financial or social problems using data-driven methods.

  1. Health Technology and Biostatistics

The intersection of healthcare and technology is creating new opportunities for actuaries to apply their skills in innovative ways. With their strong statistical background and understanding of health risks, actuaries can play crucial roles in health tech companies and biostatistical research.

Potential areas of focus include:

  • Developing predictive models for personalized medicine

  • Analyzing health data to improve patient outcomes

  • Designing pricing models for health tech products

  • Conducting statistical analysis for clinical trials

  • Analyzing burden of diseases from claims datasets

  • Gatekeeping and network analytics

  • Fraud wastage and abuse (FWA) analytics

Companies like 23andMe, health tech startups, and research institutions are increasingly recognizing the value that actuaries bring to the table in interpreting complex health data and developing innovative solutions. Micro health insurance to social universal health insurance programs are becoming more prevalent leading to huge opportunities for actuaries to apply their skills in areas which can impact hundreds of millions of lives. For example, actuaries working in health insurance specific InsurTechs and actuaries working for social insurance/universal health insurance schemes like Affordable Care Act (ACA) in the USA and Sehat Sahulat Program in Pakistan.

  1. Public Policy and Social Impact

Actuaries' ability to analyze complex data and model long-term scenarios makes them valuable contributors to public policy and social impact initiatives. In this realm, actuaries can use their skills to address societal challenges and inform decision-making at governmental and non-governmental levels.

Potential roles include:

  • Policy analyst for think tanks or government agencies. There is a rich legacy of actuaries working in UNDP, World Bank, Asian Development Bank and other big names in international development.

  • Consultant for social impact investment firms

  • Researcher for economic policy institutions

  • Advisor for international development organizations

  • Micro insurance specific consulting actuaries developing index insurance and pricing micro products

Actuaries in this field might work on projects such as modeling the long-term impact of social programs, assessing the financial sustainability of pension systems, or developing risk management strategies for disaster-prone regions. Actuaries can play a leading role in enhancing micro insurance and index insurance to increase climate change resilience of financially vulnerable communities as well as design social impact bonds3.

Conclusion

These five non-traditional career paths represent just a fraction of the diverse opportunities available to actuaries willing to think outside the box. By leveraging their unique combination of mathematical prowess, analytical thinking, and risk assessment skills, actuaries can make significant contributions across a wide range of industries and sectors.

For actuaries considering a career change, it's important to:

  1. Stay current with emerging trends and technologies in these fields

  2. Network with professionals in your areas of interest

  3. Consider additional certifications or courses to bridge any skill gaps

  4. Be open to starting in junior roles to gain experience in a new field

By exploring these non-traditional paths, actuaries can not only find new and exciting ways to apply their skills but also contribute to solving some of the world's most pressing challenges. The actuarial skill set is more versatile than ever, and the possibilities for career growth and impact are limited only by one's imagination and willingness to explore new horizons.

Referral Giveaway Announcement

Due to technical difficulties, we could not announce the winner of the referral giveaway this week. Rest assured, we will announce the winner in our next week’s edition. We appreciate your patience in this regard.