Just because pricing deals with numbers, it doesn’t mean it’s exclusive to the financial sector. In our last few posts, we focused heavily on the role of Pricing Analyst, what it is and how to get there. This type of analyst role is more often found in the marketing arm of many companies and might also be known as Behavior Analyst, Customer Analyst, or something similar.
However, there is another type of analyst sometimes confused with Pricing Analyst which falls squarely within the Finance sector. These roles might boast titles such as Risk Analyst, Financial Analyst, or Actuary. Often, it isn’t the title that speaks to the particular strengths of one type of role over another; it is the responsibilities and skill sets documented within the job description.
Like Pricing Analysts, these professionals deal with numbers and pricing. However, their focus is on models, such as those required for mergers and acquisitions or how to set health insurance premiums looking at risk.
Looking for a Low to No-Risk Gig?
Actuaries are in high demand. As a profession, it is one of the most diverse and tends to be more open to women and under-represented minorities. Though the focus is often on insurance and pension programs, Actuaries can find work in a number of industries including consulting firms, hospitals, banks, investment firms, and government.
As advisors who manage risk portfolios while analyzing historic and current data, these professionals are business-minded people with a mathematical basis. Using mathematics, statistics, and financial theory, they analyze the financial consequences of risk.
The Masonic-esque Levels of Becoming an Actuary
For individuals who are numbers focused and are interested in using their data, technical, and mathematical skills coupled with business acumen; the role of Actuary might be the perfect fit
. However, there are steps or levels which need to follow to enter the profession. These are exam-based and work-experience levels and your salary increase incrementally with each step. To begin, a graduate with a high GPA and one exam under their belt may find the role quite lucrative.
Each exam leads to the next level and enters you into an Actuarial Society. Depending on where and what you want to practice will determine which society you’ll sit the exam:
- Society of Actuaries (SOA) – focus is life and health insurance, pensions, and employee benefits.
- Casualty Actuarial Society (CAS) – focus is automobile, fire, and liability insurance as well as worker’s compensation.
- American Society of Pension Actuaries (ASPA) – focus is those in the pension field, particularly in relation to federal and state governments.
Each organization has its own exams and competition is fierce. Qualities sought beyond a high GPA and actuarial exam include:
- Good communication skills
- High technical ability
- A wide background from mathematics and statistics to the liberal arts
Actuaries and analysts with an eye toward the financial and insurance sectors use their statistical skills to research, network, and connect the dots between discerned variables. The research begins with statistical modeling.
Connect the Dots with Statistical Modeling
In statistical forecasting models, the information gathered helps analysts make statements about real outcomes which haven’t yet come to pass. The model can then help identify what might influence these variables. An Actuary, Financial Analyst, or Risk Analyst may use a:
- Merger Model (M&A) – This model is most often used in investment banking and corporate development. Think mergers and acquisitions. After all, someone has to decide the value of each company, then the basis of that value once they’re merged. Complexity varies widely in this model.
- Budget Model – This model is used in financial planning and analysis and helps set the budget for the coming year and the years to come. Focused heavily on a company’s income, these budgets are designed on a monthly or quarterly basis.
- Forecasting Model – This model is used to build a forecast of the budget model. Think of it as a building block as companies structure their budget and strategies using one or a combination of these models listed. Sometimes, the forecasting and budget model are combined. Sometimes they’re kept separate.
These are only three of the ten types of models used
in financial planning and analysis for any number of firms and industries. But, it’s the people behind the numbers who help businesses navigate what is best for their client, customer, and bottom line.
An Actuary is just one title those interested in the mathematical and statistical applications for business might find interesting. And like many of those in the Data Science field and higher tech applications, this role is in high demand. Are you the one companies are looking for?
If you’re interested in finance, modeling, statistics, Big Data & Analytics, we may have a role for you. We specialize in junior and senior roles. Check out our current vacancies
or contact one of our recruitment consultants to learn more.
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