Many people don’t know what a career in actuarial sciences entails. It is a great way to use math and statistics skills, but that’s not all it takes. Actuaries also need to be strong communicators and good team members. They must have the ability to think logically and analytically, work with data sets, manage projects, read critically and communicate clearly. This post will explore the many aspects of an actuarial science career path so you can decide if this is the right field for you!
1. What Is Actuarial Science?
Actuarial science is a field that uses math and statistics, along with other tools such as census data, to analyze risk in insurance companies. Actuaries work in the business world in a variety of fields where risk management is important – from finance and insurance to health care and the government. The main role of an actuary is to help an employer assess risk and plan for the future.
Actuarial science was first created in 1762 by an actuary named Edmund Halley. The field now has almost 50,000 members worldwide, with many more students graduating each year. There are many different opportunities to enter this field, and this article will highlight some of them.
2. Education In Actuarial Science
There are three main ways to get into the actuarial profession: via an undergraduate program (most common), a post-graduate diploma or degree, or through obtaining professional status without doing any formal education.
To be an actuary, you must first pass three main exams: the Preliminary (first written test), the Fellowship (more difficult second written exam), and the Principles (a 12-hour, two-day exam). The prelude usually has 60 multiple choice questions to be completed within 3 hours. The fellowship is a four-hour-long session that consists of 40 questions, and you must complete all of the questions correctly to pass (a passing grade is at least 35 correct answers). The principles exam will take place for two days and has 5 four hour sessions that consist of 32 multiple choice questions each.
Once you pass these exams, it means you qualify for either Associate or Fellow status. Then, after gaining a certain amount of work experience (usually five years), you can apply for the Fellowship Exam, which is designed to be more difficult than the Preliminary and Principles exams. If you pass this exam, then you are known as a Fellow of the Casualty Actuarial Society or a Fellow of the Institute and Faculty of Actuaries. Only then will you be able to do work as a fully qualified actuary.
3. What Does an Actuary Do?
Once you have obtained professional status, you can seek jobs as a “staff” or “principal.” Principal actuaries are usually more experienced and lead a group of staff members. Actuarial analysts, on the other hand, may start out with an entry-level position and work their way up the ladder.
The main responsibilities of many staff members or principals include:
(1) Researching and presenting data that has been analyzed by other actuaries;
(2) Using statistical information to calculate insurance premiums, determine future claims, and figure out how much money an employer will need to cover all of these;
(3) Recommending changes in premiums and offering advice when needed;
(4) Managing several small projects (such as analyzing employee turnover rates) and overseeing the work of actuarial analysts.
Different people work in different capacities as actuaries. According to the Actuarial Outpost, some actuaries specialize in working with pension plans and retirements or life insurance and long-term care. Others do consult work for employers who need help dealing with insurance issues after a natural disaster or another unexpected event that has caused major disruptions. Some actuaries work as teachers and faculty members at colleges and universities, and others do research.
4. What Skills Do You Need?
Some of the skills needed to become an actuary include:
Good mathematical skills- you need to be able to apply mathematical knowledge, especially with numbers and probabilities
Strong problem-solving skills- these should come naturally, but you also need a special type of creative mind that is open to new ways of approaching problems
Good communication skills– this means being able to talk to people, listen well, and convey complex ideas in a simple manner
Problem-solving skills, in particular, are essential for this career. Actuaries need to be able to deal with complicated situations and devise effective solutions that everyone can understand – even if they don’t have advanced knowledge of mathematics or statistics.
The business world is constantly changing, and so must actuaries. They need the ability to adapt quickly in order to meet new demands and challenges. Fortunately, good problem-solving skills should allow you to do this with ease.
5. How Much Does an Actuary Make?
The pay scale for actuaries varies depending on the company you work for and your level of experience. According to Payscale, as of April 2010, the median salary for an actuary is $75,412 per year. Some employers pay more than that, though. Actuarial salaries at large corporations tend to be very competitive and can go as high as $180,000 each year. But you need to remember that these are average figures, so there will be some variability depending on where you live or work, your level of experience, the state of your industry, and many other factors.
6. What Is the Job Outlook for an Actuary?
The job outlook for actuaries is very good. According to the Bureau of Labor Statistics, employment opportunities in this profession are expected to grow by 28 percent over the next decade, which is much faster than the average for all occupations. This means that you can expect many excellent career opportunities as an actuary.
Modern society needs more risk management services, and this is an industry that is growing more rapidly than most. This trend of more people offering risk management services means a greater demand for actuaries, and this means there are many great opportunities waiting out there for those with the necessary skills and experience to take advantage of them.
7. Where Do Actuaries Work?
Most actuaries work in insurance companies, including life insurance companies, health insurance companies, and property and casualty insurance. Hospitals are another common workplace for this profession. Other employers include consulting firms, public accounting firms, financial institutions, government agencies, and research organizations.
Some people become actuaries within the military or at colleges or universities that offer four-year degree programs for this profession.
8. What Does a Typical Day Look Like for An Actuary?
The work of an actuary can vary greatly from one day to the next, but there are some common elements. For example, you’ll always be looking at and analyzing statistics and financial data in order to come up with predictions and solutions for companies that employ you as a consultant.
This means that you’ll spend a lot of time interpreting information and using mathematical models to do so. You’ll also use software such as Microsoft Excel and SAS to build these models. However, the most important skills for an actuary are problem-solving and communication skills which you will need in order to deal with both colleagues and clients.
9. What is Another Related Career for an Actuary?
Here are some related careers that you can consider:
Surveyor-Surveyors design and build infrastructure including buildings, roads, bridges, and tunnels. They use their mathematical skills to make sure structures are built on solid foundations.
Civil Engineer-Civil engineers are involved in large-scale construction projects. Their mathematical skills help them to design plans for building new structures and roads, while their communication skills help communicate these plans to contractors.
Criminal Investigator (Forensic Accountant)-A forensic accountant is a type of criminal investigator who uses their expertise in mathematics and finance to crack cases involving financial crimes.
Public Accountant-Public accountants work in public practice and are responsible for preparing tax returns, advising clients on how to manage their money more efficiently, and helping companies with business accounting issues.
Nuclear Engineer-Nuclear engineers research and develop methods of producing energy using nuclear power. They combine their knowledge of mathematics with the study of physics to find solutions for some of the major problems that exist in the nuclear power industry today.
10. Do Actuaries Need to be Licensed or Otherwise Registered?
Actuaries are not required to be licensed or registered with any governing body, but they are typically members of the Society of Actuaries (SOA) and Casualty Actuarial Society (CAS). Both organizations offer qualifications for their members.
11. Is it Possible to Start Work As an Actuary Without a Degree in the Subject?
Yes, it is absolutely possible for you to find success and get your foot in the door of this profession with only a bachelor’s degree; however, keep in mind that most actuarial positions require at least a master’s degree.
12. Best Colleges to Study Actuarial Science
The following colleges offer four-year degree programs in actuarial science:
- Oberlin College in Ohio (Bachelor of Science)
- The University of Notre Dame in Indiana (Bachelor of Arts in Mathematics and Bachelor of Science in Actuarial Sciences, Joint Program)
- Washington University at St. Louis (Bachelor of Science)
- Wesleyan University in Connecticut (Bachelor of Arts)
- Rensselaer Polytechnic Institute in New York (Bachelor of Science, Bachelor of Engineering)
- University of California at Berkeley (Bachelor of Science, Master of Business Administration)
- Harvey Mudd College in California (Bachelor of Science)
- Pitzer College in California (Bachelor of Arts)
- Reed College in Oregon (Bachelor of Arts)
13. Top Recruiting Companies for An Actuarial Science Major
Here are the top companies that hire actuaries:
- A.M. Best Company in Oldwick, New Jersey (American Best, AMB)
- Marsh & McLennan Companies Incorporated in New York City (Marsh) (Marsh)
- TEKsystems in Fort Meade, Maryland (Tek Systems, Tek)
- Hewitt Associates LLC in Lincolnshire, Illinois (Hewitt)
- International Business Machines Corporation (IBM) in New York City (IBM)
- Great-West Life Assurance Company of Canada in St. Paul, Minnesota (Great-West Life,)
14. Online Courses to Study Actuarial Science
The actuarial science field is a growing industry that offers many opportunities for those with the proper training. If you’re interested in pursuing a career in actuarial science, there are a few online courses that can help you get started. These courses will teach you the basics of actuarial science, including how to analyze risk and calculate premiums. They’ll also give you the skills you need to succeed in this field.
Introduction to Actuarial Science by Edx- This course is free for anyone who wants to enroll. It takes about eight weeks to complete, and it contains six modules covering topics like insurance, risk management, statistical analysis, and financial mathematics. Edx also offers a more advanced course on the topic, which you can find here.
Actuarial Science For Non-Actuaries by Udemy- If you’re looking for a more interactive class, this course might be what you need. It’ll teach you the basics of actuarial science in just six weeks, and it comes with an instructor who’s available to answer questions. The course is also designed to suit beginners, so if you’ve never taken an online course before, this might be a good place to start.
Actuaries: A Career Guidance Course by Udemy- This course will teach you how to get started in the actuarial science field. In just ten short lessons, you’ll learn about insurance and what it takes to become an actuary. You’ll also cover topics like state exams and business writing, which are necessary for succeeding in this industry.
An actuarial science career is an excellent opportunity for someone who wants to work in the financial industry but does not want to become a stockbroker or trader. The best part about this profession is that it provides stability and security while still giving you access to all of the latest technologies because insurance companies are required by law to invest their assets wisely in order to protect finances from any potential disasters. These professionals also have opportunities available in consulting, finance, banking, accounting, and even academia. Good luck to those of you who are considering this profession!