Actuaries use financial and statistical theories to evaluate, manage and advise businesses on the potential risk of uncertain events and the associated financial cost. To become an actuary, rigorous academic commitment is required and due to this, actuaries often receive a competitive salary. It is an exciting and fast growing profession, however it is becoming an increasingly competitive field.
Actuary Career Guide
Actuary Career Ratings
What an actuary actually does
Actuaries use mathematics, statistics and financial theory to analyze the financial costs of risk and uncertainty. They tend to work for large insurance companies and aid them in the designing insurance premiums and policies.
They assess risk factors, such as a type of profession, state of residence, pre-existing medical conditions, mortality rates and even lifestyle choices. By understanding these risk factors, actuaries can generate reliable mathematical computations for determining the anticipated number of claims and the monetary value associated to these claims.
Most actuaries tend to specialize into one of the following areas:
- Health insurance, where they help to design and develop long-term care and health insurance policies by predicting expected costs. They base these predictions on things such as family history, geographic location and occupation.
- Life insurance, where actuaries develop life insurance policies for individuals and groups. These predictions are typically based on things such as age, gender and tobacco use.
- Property and causality insurance, where actuaries develop insurance policies that protect against property loss and liability.
- Pension and retirement benefits, where actuaries work to design, test and evaluate company pension plans to determine if the expected funds available in the future will be enough to ensure the payment of future benefits.
- Enterprise risk, where actuaries identify risks, including economic, financial and geopolitical risk, that may affect a company’s short-term or long-term objective.
The daily duties and responsibilities of an actuary will differ slightly, dependent in what area they specialize in, their experience and qualifications and their employer. However, the basic duties and responsibilities of an actuary typically include:
- Estimating the likely economic cost and probability of death, sickness, accident or natural disaster
- Gathering and compiling statistical data, and other information, for further statistical analysis of risk
- Producing charts, tables and others reports that explain calculations and proposals. Actuaries will also be responsible for presenting these to other, non-actuary, team members. They also have to explain these findings to company executives, government officials, shareholders and clients
- To design tests and administer insurance policies, investment pensions plans and other business strategies that are designed to maximise profitability and minimize risk
Why they are needed
Actuaries are needed because they have a unique and specialized skill set that help companies to create effective and fair insurance policies. They help form high-level business decisions and solve real-life problems in a range of industries, making their role and contribution invaluable.
They are also needed as they can influence investment decisions to designing pension schemes, that could have an effect on thousands of people if done incorrectly.
Pros and cons of a career in Actuary
- The work is generally really interesting and many actuarial professionals enjoy the combination of a business environment and the application of mathematical and statistical skills to their job.
- Actuarial work is generally quite challenging, with many entering the profession seeking the challenge and the enjoyment of continuous learning and skill development.
- There is a lot of opportunity for advancement and growth in the actuarial profession, especially it requires continuous education and skill development.
- The salary of an actuary is usually high, which is due to the niche market, competitive nature of the work and the rigorous academic requirements.
- There is lots of opportunity to travel as an actuary, either between offices or between countries as the skills learnt are transferable
- The job market can be competitive, but it is a case of once you’re in, you’re in, which makes it a very safe and secure field to enter.
- Training to be an actuary requires an extensive amount of studying, normally taking around 7 to 10 years to become qualified. Within this time frame, aspiring actuaries have to make many sacrifices.
- The field can be extremely competitive and is very specialized. While actuaries are extremely valuable to insurance companies because of their unique skills, their knowledge and skill isn’t particularly valued or understood outside of the industry. Also, the specialization of an actuary means that there aren’t endless actuarial opportunities for progression or advancement.
- To begin with in entry-level positions, the work isn?t particularly fulfilling as entry-level actuaries spend their time doing the ?dirty work? ordered by their managers.
- Often, actuaries have to work long hours and do a lot of overtime.
Career success factors
Due to the nature of the work, the main career success factors for a career as an actuary is strong mathematical skills, an ability to understand and apply statistical and financial theory and a convincing analytic perspective.
Actuaries are also likely to have a great eye for detail, the willingness to work hard and to continue to learn and develop, and the ability to work in a team to report findings and data.
The Bureau of Labor Statistics predicted a projected growth of 20% from 2018 to 2028 for actuarial careers, which is much faster than the average career growth.
There will always be new risks, changes in prices and insurance products that need to be developed. Due to this, more actuaries are needed to help companies manage their own risk and help them to avoid, manage and respond to any potential risk factors across all areas of their business operations.
The information collected from consumers will still need to be analysed to allow companies to better develop new products, set competitive prices, predict consumer behaviour and make accurate predictions of future risk. These jobs can only be done by actuaries with the unique education and skills, so therefore actuaries will always be needed.
However, it is only a small occupation and over this 10-year period, there is only predicted to be roughly an extra 5000 actuarial jobs in the United States. What is more, is that the job market is particularly competitive for entry-level applicants because the number of students sitting actuarial exams has increased. The best way to enter the field at an entry level is to complete at least two actuary exams, an internship and demonstrate strong analytical and business skills.
The career path to becoming a qualified actuary is fairly long and time consuming. Firstly, actuaries have to complete an undergraduate degree in actuarial mathematics and science, or a similarly field (e.g., mathematics).
Actuaries then complete a series of further exams to achieve a professional actuary certification from either the Society of Actuaries (SOA) or the Casualty Actuarial Society (CAS). In order to start an actuarial career, actuaries should aim to have completed at least two exams, but all seven exams will be required to be taken to progress towards associate level.
Some stop at the associate level, however others go on to train for fellowship membership. This certification allows fellows to supervise the work of other actuaries and provide advice to senior management, which opens more job opportunities as advancement depends on both job performance and the number of exams passed.
Actuaries also often specialize in a certain area, typically in either health insurance, life insurance, property and causality insurance, pension and retirement benefits or enterprise risk.
Example Job Titles for Actuary
Benefits & Conditions
Income and benefits
Due to the academic requirements and the importance of actuarial work, they are rewarded with a very good salary. According to PayScale, the average salary for an actuary is $108,350. The bottom 10% earn around $64,860, while the top 10% each over $193,600.
As actuaries work for insurance companies, they often receive attractive benefits packages, such as: family leave, retirement plans, childcare, life insurance and loan repayment programs.
Autonomy and flexibility
As not many understand the complicated and niche work of actuaries, they are often allowed to work on their own and make their own decisions, which gives them a high level of autonomy and flexibility in their work.
Locations and commute
Most actuaries work in bigger cities, such as New York or Chicago where there are large insurance companies. Although there are some actuarial jobs in smaller cities, the opportunity for development and progression is greater in cities where there are more jobs; which is something to consider when picking a career as an actuary.
According to Zippia, the best states to be an Actuary, based on average annual salary and number of jobs available, are:
- Maine, where the average annual salary is $110,257
- New York, where the average annual salary is $116,159
- Rhode Island, where the average annual salary is $101,637
- Washington, where the average annual salary is $115,635
- Connecticut, where the average annual salary is $101,118
The worst states, according to Zippia, are South Carolina, Michigan, South Dakota, Hawaii and Montana.
Actuaries typically work in small teams that include managers and professional from other fields, such as from accounting, underwriting and finance. Actuaries may also sometimes have to travel between offices to work with different teams or to speak to different levels of management about their findings and their advice.
Typically, actuaries tend to work around 40 hours a week. However, overtime is common, especially in entry-level roles.
Some actuaries will eventually become a consultant and provide advice to clients on a contractual basis, which gives them more flexibility and control. Others, will progress to work in more senior level roles in businesses, which also provides them with more control and responsibility.
Common Matching Personality Types
Which personalities tend to succeed and thrive in Actuary careers? Based on our research, there is a relatively strong positive correlation between the following personality types and Actuary career satisfaction. This doesn’t mean that there aren’t many exceptions, of course, but if you fit into one of the following personality types then we suggest you give strong consideration to a career in Actuary.
Due to the uniqueness of the career, it is hardly surprising that there is little research into the personality traits that make successful actuaries.
However, it is reasonable to assume that due to the high cognitive ability required to be an actuary, those who demonstrate high levels of conscientiousness will be successful in this career.
Accomplishment and mastery
The sense of accomplishment and mastery for an actuary is huge: they have long-term on the job training, which means their skills are always developing. This gives actuaries a strong sense of mastery and accomplishment.
Normally, actuaries work for results-oriented businesses. This environment allows and encourages actuaries to use their strongest abilities and skills independently, which gives them a strong sense of accomplishment.
Meaning and contribution
Like all jobs, there will be some mundane tasks that do not feel as though they are filled with meaning or contribution.
However, in the grand scheme of things, actuaries work to influence insurance policies, which can have a huge impact on thousands of peoples lives. Due to this, there is often a high sense of meaning and contribution in an actuarial career.
Most actuaries work full time and typically work around 40 hours a week, but they can often work overtime. Actuaries also have to travel a lot and work in larger cities where there are more job opportunities.
What is more, is that actuaries have to continue to study throughout their career. This means that, especially at the beginning, actuaries have to sacrifice a lot and thus the life fit can be hard for people with lots of commitments. However, once this initial period of studying is over, many actuaries find it easy to balance a fulfilling career with their life, especially in comparison to other financial careers.
Who will thrive?
Firstly, in order to thrive in the profession, you must have strong mathematical, analytical and statistical skills. With this, those who thrive in the profession tend to demonstrate a strong attention to detail in all aspect of their work.
Individuals will also thrive if they have strong communication skills and the capacity to explain complicated concepts in simple words. Interpersonal skills will also benefit actuaries and they will thrive when working in a small team environment. Lastly, actuaries will thrive if they have a genuine interest in mathematics and want to continuously learn and develop their skills.
Who will struggle?
Individuals will struggle if they are not naturally gifted in mathematics and statistics, or if they do not enjoy maths, as many actuaries note that this is their favorite thing about the job. With this, people who do not have any interest in business matters and only want to focus on mathematics may also struggle as there is a huge focus on how mathematics can help businesses.
People will also struggle if they are not willing to sacrifice or give up some things during the first few years in the career, when they will have to work and study for a series of actuarial exams.
Skills and talents
- Mathematics Skills, as actuaries need to quantify risk using principles of calculus, statistics and probability
- Analytical skills, as actuaries need to use these to identify patterns and trends in data to determine which factors will have an effect
- Communication skills, as actuaries will need to discuss complexed technical matters with those without any experience or knowledge of actuarial mathematics and science. They also need to create and promote reports for others, from different fields, to see
- Technology and computer skills, as actuaries will have to develop spreadsheets, databases and statistical analysis tools. They also need to understand and use scientific software such as IBM SPSS Statistics, insightful S-PLUS, SAS, Microsoft Office. Sometimes they will also need to understand coding such as C++, JAVA and python
- Interpersonal skills because actuaries who progress in their career may often serve as team leaders. This means they need to be able to listen to other people’s opinions and suggestions before reaching a conclusion
- Problem-solving skills, as actuaries need to identify risk and develop ways for businesses to manage this risk
- Critical thinking, as actuaries need to use their logic and reasoning to identify strengths and weakness of solutions
To become an actuary, you will first need to complete an undergraduate degree in actuarial science, mathematics, statistics, science, business or another analytical (quantitative) field.
On completion of this degree, actuaries need to pass exams accredited by certain boards (discussed below) to become a certified professional. This further training can take anywhere from four to 10 years.
Certifications for Actuaries
There are two professional societies that provide certificates for actuaries in the United States. One is the Casualty Actuarial Society (CAS) and the Society of Actuaries (SOA). Both have two levels of certification, the first level is the associate level and the second, which requires further study, is the fellowship level.
The CAS certifies actuaries who work in the property and casualty field. Whereas the SOA certifies actuaries who work in the life insurance, health insurance, retirement benefits or investment and finance fields.
Both societies require applicants to complete certain educational coursework in economics, finance and mathematics. There are also seven exams to pass to become a certified associate.
In order to land that first entry level job, many employers expect students to have passed at least two of the initial actuary exams needed for professional certification. These accreditations also require continuous education, which is met by attending training seminars that are sponsored by the actuary’s employer or by the society itself.
How to Become
Actuaries play a crucial role in financial decisions by helping companies plan for risk and uncertain events. These predictions are used to design insurance policies, which impact thousands.
If a career as an actuary is something you’re interested in, then great! One of the first things you can do is to decide what undergraduate degree to take, if you haven’t already been to university. It would also be very useful to start looking for internships in either insurance or finance, as these entry-level candidates are more likely to succeed in getting into the industry.
If you have been to university, then you can begin to look at what specialised route you would like to go down and what society you would like to join. Once this is done, you can begin to revise for a sit the exams required to get into the field.
Education and learning
Actuaries must first complete an undergraduate degree in a related field. After this, actuaries must then pass seven exams for the relevant credited society. Some stop at an associate level, but others go on to take continuous learning to become a fellow, which gives them more responsibility and flexibility.
Continuous learning is required from actuaries as they have to sit exams and attended seminars throughout their career. This means that the skill development and learning is high for an actuary and it is therefore a fulfilling and rewarding career.
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