Identifying the difference between Data Scientists and Actuaries is no easy task. Data science and actuarial science both rely on deep data processing. The results generated by both are used to better understand the present and predict future circumstances. In this article, I’ll tell you the difference between data science and actuarial science.
What is Actuarial Science?
Actuarial science is an area that relies heavily on risk management. In actuarial science, statistics and mathematics are used to determine the level of risk of a particular prospect or circumstance. Risk assessment is an integral part of many industries, from insurance to financial speculation.
The work here is based on the assumption that, with enough data, the right calculations will yield actionable insights that businesses can take to mitigate risk.
Actuaries are sometimes called “the first data scientists”. Before computing and algorithmic programming, actuaries spent hours scouring pages to find patterns in the numbers that made up their data. Today, actuaries rely on statistical processing software to determine trends.
Skills Required in Actuarial Science:
There are generally three most important skills required in actuarial science:
- Problem Solving: Risk management is a complex area and data sets are never the same. While this makes each job unique, it does require a high degree of problem-solving. Using external knowledge to extract relevant information is an essential skill.
- Computer Literacy: Actuaries should have strong computer skills, both to understand how software processes data and to share the results between different platforms.
- Mathematics and Statistics: To analyze data effectively, an actuary must be familiar with statistics, probability, calculation and accounting, as well as recognizing and interpreting trends within a data set.
What is Data Science?
Like actuarial science, data science is concerned with analyzing data and making statistical predictions. However, unlike the field of Actuarial Science, where the work primarily in insurance and with numbers, Data Science means to make use of a wide range of data to make predictions on a wider range of topics.
The information data scientists work with is not just digital. They use abstract collections of data to generate solutions to a variety of complex problems, as the work and techniques are applicable to provide a wide range of information. Data scientists can be found in almost any industry, from technology to health care.
Skills Required in Data Science:
There are generally three most important skills required in data science:
- Critical Thinking: Thinking critically about a problem helps data scientists form hypotheses and refine datasets to offer accurate information.
- Programming: While generalized computer skills are still a qualification for data scientists, they need to know much more about computers than other professions. Learning syntax and forms for languages such as R and Python gives data scientists the ability to automate data processing. Considering the size of the data pools with which these scientists deal, programming is a fundamental skill.
- Mathematics: Data scientists should have a solid background in linear algebra, calculus, and statistics. Many companies require data scientists to have a graduate degree in math or a related field.
Difference Between Data Science and Actuarial Science
Hope you have understood both areas correctly. Now let’s identify the difference between Data Scientists and Actuaries. In data science, the scope is often broader than that of actuarial science.
The field of actuarial science is more concerned with the nuances of statistical probability compared to data science. Data science is concerned with developing programs to help them process data, while these programs can be used in actuarial science to determine risk.
The most important difference between Data Scientists and Actuaries is that actuaries deal primarily with financial risk, while data science can be applied to any field that relies on large amounts of data.
Hope you liked this article on the difference between data science and actuarial science. Please feel free to ask your valuable questions in the comments section below.