Written by Dr. Pedro Rino Vieira

Hyeji Kang has built an impressive career as an actuary. After graduating in Economics from Seoul National University, she qualified with the U.S. Casualty Actuarial Society and later joined Allianz Commercial as Chief Actuary for the Americas. This year, she moved into one of the most finance-oriented roles in any organisation: Chief Financial Officer (CFO).

Hyeji’s story is far from unusual. Many actuaries eventually end up in business-finance positions, even though their academic background is quite different from that of traditional finance professionals. But the reality is simple: to be effective, every actuary needs a solid understanding of business finance.

Just look at how the profession defines itself. The Society of Actuaries describes actuaries as experts who develop solutions for complex financial problems, manage risk, and understand the business side of decision-making. The Institute and Faculty of Actuaries in the U.K. calls actuaries “problem solvers” and “strategic thinkers” who predict the financial impact of risk. Both definitions highlight exactly the same thing; actuaries don’t just model numbers; they help organisations make financial decisions.

This is why actuaries are increasingly expected to think like CFOs. Modern regulations such as IFRS 17 and Solvency II rely on financial-valuation concepts. Setting discount rates requires understanding the cost of capital. Capital projections influence how companies structure their financing and how much they can return to shareholders. Even pricing, traditionally seen as a technical task, must align with the company’s broader strategy if long-term value is to be created.

So, actuarial work clearly doesn’t happen in isolation. It happens inside an organisation, within a financial and strategic context. Business finance provides the language and tools that connect actuarial decisions to their real-world impact.

And when that connection breaks down, the consequences can be serious. One well-known example is the Equitable Life Assurance Society in the U.K. For decades, it sold pension contracts with guaranteed annuity rates. But the actuarial assumptions behind those guarantees didn’t anticipate the impact of falling interest rates. When rates dropped in the 1990s, the guarantees became extremely costly. A 2000 court ruling confirmed policyholders’ rights, and the company didn’t have sufficient reserves to meet its obligations. Equitable Life closed to new business, and many policyholders saw their expected retirement benefits reduced, some quite sharply.

Another example comes from the case of “Castle Cloud,” described in a Society of Actuaries article. The company had a sophisticated ERM model that looked impressive on paper, but it was overly complex and not well understood internally. The model underestimated tail risks and didn’t capture important interactions between assets and liabilities. When the 2008–09 financial crisis hit, the losses were far larger than the model predicted. Rating agencies reacted, customers withdrew funds, and the organisation entered a period of financial stress.

These stories remind us that actuarial work is never just about mathematics. It’s about how those mathematical insights fit into a company’s financial, strategic, and organisational context. Business finance provides the tools, the language, and the perspective that connect actuarial models to business decisions. For actuaries, understanding finance isn’t an optional extra; it is part of the foundation for sound judgment, organisational impact, and long-term success.