Actuary Job Description & Career Guide

what is actuary job

An actuary collects financial and statistical data to determine the risk of events occurring. After providing a statistical analysis, an actuary will help a client (whether a business or individual) determine how to minimize the risk. The insurance industry requires actuaries to help build policies and set rates for policyholders. An actuary may also find employment in the financial sector and the government.

At the present, the growth outlook for actuaries is positive. The need for actuaries is expected to increase by 21% between 2008 and 2018. This is a higher than average rate compared to other careers. Most actuaries will be employed by the insurance industry and consulting firms, with a small number taking government jobs.*

*According to the BLS,

However, pension actuaries will decline as retirement benefits move away from defined benefits towards investment retirement funds (such as 401k plans) or no retirement benefits whatsoever.

Actuary Job Responsibilities

An actuary will typically be responsible for the collection of relevant statistics and collating the data into a coherent project. They will have to determine the exact amount of risk for an event. The actuary may have to travel to a business’ location to study business protocols. Following their findings, an actuary will need to decide the best possible ways to reduce the risk of the event occurring.

The actuary will need to present their final conclusion to their client in an understandable way. The actuary and the client will then work together to implement the actuary’s recommendations.

Actuary Training and Education Requirements

Typically, an actuary has a minimum of a bachelor’s degree in actuarial science, mathematics, or statistics. Additional coursework often includes business, economics, or risk analysis. For professional certification, courses in applied statistics, corporate finance, and economics will be required.

Actuaries will need strong computer skills, particularly with databases and spreadsheets. Statistical analysis software and programming languages knowledge is also extremely helpful. A consulting actuary will need strong interpersonal communication skills. For all actuaries, being able to convey complex numbers and technical data in an understandable manner is important. Being able to keep up with business and economic trends can provide an advantage.

Actuaries are often able to locate employment immediately after graduation. Then they can work full-time while studying for certification examinations. Advancement and promotions for actuaries will be heavily weighted towards job performance and the accuracy of their data.

For insurance actuaries, beginners may be rotated through a number of different positions in order to learn all phases of insurance operations. These can include financial reporting, marketing, and underwriting. After a period of experience has been gained, they will be moved into an actuary position.

A recent trend among companies has required actuaries to pass the initial certification before hiring due to an increasing number of qualified candidates. The first stage of actuary certification primarily tests the competency of an individual in several aspects of mathematics. This can provide an indication of how suitable a person might be for actuary employment.

Actuary Salary and Wages

The Bureau of Labor Statistics (BLS) reported that in May 2008, actuaries received a median annual wage of $84,810. The median annual wage for a beginning actuary with a bachelor’s degree was $56,320 in July of 2009.*

*According to the BLS,

Management, scientific, and technical consulting services by actuaries were paid an average of $107,080, the highest compensation for the field.*

*According to the BLS,

Actuary Certifications

Two professional societies are considered the primary certification processes for actuaries, depending upon the field of employment. The Society of Actuaries (SOA) handles actuaries who specialize in finance and investment, health benefit systems, life insurance, and retirement systems. The Casualty Actuarial Society (CAS) covers actuaries who will be going into the casualty and property field. This includes automobiles, homeowners, medical malpractice, personal injury liability, and workers’ compensation.

Both the SOA and CAS sponsor four of the seven examinations jointly. These four initial examinations cover the same material. The first examination tests mathematics and can be a determination as to whether a person has an aptitude for becoming an actuary. After the first examination, a specialty will need to be decided upon to proceed. Often, employers allow actuaries to study for the examinations after being hired and may provide a wage increase for each passed examination. Altogether, taking all of the examinations may require as long as four to eight years.

Actuary Professional Associations

As their examinations imply, the CAS and the SOA cover different actuaries depending upon their field of employment. The SOA was founded in 1949 as a result of a merger of two professional societies, while the CAS began in 1914. Both the CAS and SOA provide a range of sponsored activities for their members, including publishing research, meetings, and networking.

The SOA is the larger of the two organizations, covering more fields involving actuarial science. The SOA currently counts over 20,000 members. The SOA has an application requirement for membership.

The CAS is smaller due primarily to its more narrow focus. It has about 5,000 members at present. The CAS requires its members to pass its examination, and then have two references from present members before admittance into the society.

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Category: Insurance

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