What Actuaries Do
Actuaries work with insurance companies as analysts to predict risk and liability to help them maximize profitability, using statistical data related to costs and financial trends. For example, actuaries may look at car accident data by location, age of participants, etc. and then use their findings to recommend rates and terms for auto insurance policies.
In addition to gathering and analyzing data, actuaries are responsible for presenting their findings to company executives, clients, and even government officials. They usually work in a team setting, collaborating with accountants or financial analysts to make the best decisions for the company or client at hand.
Actuaries generally specialize in a specific field of insurance. They may choose to work with health, life, or property and casualty insurance, pension and retirement benefits, or enterprise risk. They can also work in the federal government, evaluating changes to Social Security or Medicare and conducting economic studies. Some actuaries work on contract as consultants, providing financial advice to clients or auditing other actuaries as well.
Who would enjoy a career in Actuarial Science?
People who become successful actuaries are naturally analytical and critical thinkers. They find great satisfaction in solving complex problems and are interested in data patterns, trends, and statistics. Because of the emphasis on teamwork in the workplace, actuaries must have excellent interpersonal skills and should be able to write and communicate effectively. Not only is teamwork crucial in this career, being self-motivated and working well with deadlines is extremely important.
Those interested in the job should also enjoy working with databases and computer software such a Microsoft Excel, or have a passion to learn about these tools, since it comprises much of an actuary’s day-to-day duties. People who appreciate mathematics and its black-and-white nature will enjoy using numbers to make positive recommendations and changes for large organizations and personal clients. Those interested in testing their mathematics skills can take a sample quiz to check their mastery.
Who mightn't like the career?
Actuaries have a responsibility to their companies and various clients to make well-informed decisions that can hugely impact profit and success. Those who do not have a deep understanding of business and politics may find this responsibility too much to handle. It’s also a great commitment to devote the necessary hours to studying and exams for actuary certification, something that may push people away if they’re unsure of this field as a long-term option. It’s also not good for people who struggle in an office setting or working with numbers and data; those who desire a more creative and unconventional work atmosphere may not be happy as actuaries.
Actuaries typically obtain an undergraduate degree in mathematics, statistics, or business. Courses in economics, finances, and computer sciences are also emphasized during undergraduate programs. Before graduation, students are expected to pass at least one of the necessary exams in order to become certified.
There are two societies for actuaries that certify graduates to become professionals in their field, either at associate or fellow level. The Casualty Actuarial Society (CAS) and the Society of Actuaries (SOA) offer certifications for different fields, and each requires a specific set of exams. The CAS is a society open to international applicants and the SOA supports international members in 78 countries around the world. Education towards associate certification can take 4 to 6 years, then another 2 to 3 years to earn fellowship status. Even after certification, continued education is expected to remain a member of the society.
Potential actuaries gain advantages prior to interviewing by completing internships. Internships can open the doors for making valuable connections with professionals and like-minded peers in the industry, which can be useful when meeting future employers. It’s also a good idea to be involved with extracurricular activities during education, particularly those that involve applicable skills, such as actuary, engineering, or mathematics clubs. Presenting this along with internship experience shows a competitive edge.
Moving into Actuarial Science from another career
A career as an actuary is appealing because of its impressive salary and job security. It’s also consistently rated a relatively low-stress career with a great success rate for job availability, making it a great option for anyone frustrated with their work-life balance or current income.
Because a career as actuary requires specialized education and examination, those considering making a career switch into the field will have even better success having experience in a similar industry. This is advantageous for making professional connections and obtaining references and recommendations without having an undergraduate internship. Read a firsthand account of why an actuary career was the right one, “Why I Chose to Become an Actuary,” and how to successfully switch careers later in life, “It’s Not Too Late to Be an Actuary.”
Role: Entry-level actuaries often start their careers as trainees, working with experienced mentors in the workplace. This internship allows the new actuary to gain experience first with basic tasks. These may include compiling data and other general duties and then eventually grow to include analyzing data, writing reports, and research. During this time most actuaries are still working to complete their certification process. Fortunately, employers usually cover the cost of exams and relevant materials for their employees, even providing paid study time.
Role: Actuaries gather and analyze statistical data on rates of mortality, accident, illness, and retirement to predict liability for clients and businesses. In the insurance industry, this role is key to estimate the economic costs of these events and help minimize risk and maximize profit.
Understanding the possible risks helps businesses set premium rates and plan for paying benefits to employees. In addition to designing and testing insurance policies, pension plans, and business strategies, actuaries must present their work to team members, management, government officials, and potential clients.
Most actuaries work in a typical office setting. However, if they work for a consulting firm, traveling may be involved in order to work closely with clients.
Entry-Level (0-5 years): Data from PayScale indicates that starting salaries for actuaries average USD$65,000 in the United States, £40,000 in the United Kingdom, CAD$58,000 in Canada, and AU$80,000 in Australia.
Mid-Career (5-10 years): USD$110,000, £66,000, CAD$96,000, and AU$121,000.
Experienced (10-20 years): USD$135,000, £75,000, CAD$107,000, and AU$139,000.
Late-Career (20+ years): USD$148,000, £85,000, CAD$136,000, and AU$136,000.
Actuaries receive bonuses and qualify for profit sharing programs with their respective firms that can dramatically increase income.
Why Actuaries move on
Actuaries have an extensive skillset under their belt, especially late in their careers due to continued education, and should have no trouble exploring other career options after leaving the field.
Homing in on any one of these skills can be lucrative. However, because of the time invested into becoming a certified actuary and building an impressive resume, experienced actuaries may find themselves overqualified for other positions. Because of this, many become a small-business owner or go on to teach actuarial studies, as both options that make good use of their existing skills and still provide many of the same rewards. Moreover, each career path provides the opportunity to give back and help others while making a positive difference in society, something that makes being an actuary so rewarding in the first place.