Actuaries evaluate the probability of certain events occurring and the potential costs associated with them. They also help their employers develop policies to help minimize those costs. Most actuaries work for insurance companies, helping them design policies and set premiums. Others help pension funds determine whether they'll be able to meet their obligations to beneficiaries. Some actuaries work in the public sector to help evaluate proposed changes to government programs or examine insurance rates.
Actuary Duties & Responsibilities
An actuary's tasks might include:
- Using mathematics, statistics, and financial theory to collect and analyze data
- Determining probability of certain events occurring, such as death, sickness, accidents, retirement, and natural disasters
- Estimating the financial cost or risk if certain events do occur
- Designing company policies and plans that will help minimize costs of risks
- Calculating insurance premium rates
- Explaining findings to all stakeholders, such as company executives, shareholders, government officials, and clients
Actuaries do most of their work on computers using advanced modeling and statistics software. They may specialize in specific fields, such as health, life, or property insurance; pension and retirement benefits; and enterprise risk.
An actuary's salary can vary depending on location and employer.
- Median Annual Salary: $102,880
- Top 10% Annual Salary: $186,110
- Bottom 10% Annual Salary: $61,140
Source: U.S. Bureau of Labor Statistics, 2018
Education Requirements & Qualifications
To work as an actuary one needs a bachelor's degree and must also pass a series of certification exams.
- Education: Actuaries must first earn an undergraduate degree in mathematics, statistics, actuarial science, or business. Typical coursework includes economics, applied statistics, finance, accounting, calculus, and computer science.
- Certification: To work as an actuary you must earn an actuarial designation from the Society of Actuaries (SOA) or the Casualty Actuarial Society (CAS). To do this you must pass a series of exams, fulfill certain education requirements, and take mandatory online courses. The first four tests in the series of exams are known as preliminary exams. After passing those tests, candidates must pass two or three additional exams depending on area of expertise.
It can take between six and ten years to pass all of the actuary exams, but one can work as an actuarial assistant after passing only the first two. Many begin taking exams while they are still in school.
- Professional advancement: Upon fulfilling all the requirements, an actuary may become an associate of either the SOA or CAS. After achieving associate status, one can go on to achieve fellow status by fulfilling requirements in a specialty area. Actuaries who perform their jobs well and can demonstrate a broad knowledge of the insurance, pension, investment, or employee benefits fields may move on to executive positions such as Chief Risk Officer or Chief Financial Officer.
Actuary Skills & Competencies
Those who aspire to this career must have a variety of skills to be successful. They include soft skills which are the personal qualities with which one is either born or acquire through life experience:
- Analytical and math skills: Actuaries must be able to effectively analyze complex data and quantify risk.
- Problem-solving skills: In order to identify risks and help businesses manage them, actuaries must be good problem solvers.
- Interpersonal and communication skills: They must often function as members or leaders of teams and also use verbal communication skills to explain their findings and suggestions to stakeholders.
- Computer skills: Actuaries must be able to comfortably use different types of advanced modeling and statistics software, as well as databases and spreadsheets, to do their jobs.
The U.S. Bureau of Labor Statistics predicts an excellent job outlook for actuaries. Employment will grow much faster than the average for all occupations through 2026, at 22% compared to 7%.
Actuaries usually work in offices and spend a lot of time at a computer. Those who work for consulting firms spend time traveling to meet with clients.
Most jobs in this field are full-time positions, and some require more than 40 hours per week, depending on the employer.
Comparing Similar Jobs
People who are interested in becoming actuaries might also consider similar careers (listed below with their median salaries):
- Accountant or Auditor: $70,500
- Cost Estimator: $64,040
- Financial Analyst: $85,660
- Insurance Underwriter: $69,380
- Mathematician or Statistician: $88,190
Source: U.S. Bureau of Labor Statistics, 2018