Although the term actuary may still be unfamiliar to many, these professionals have been solving problems and having an impact on the financial status of companies for many years. An actuary is a trained professional who, with their knowledge of statistics, math and financial theory, measures, monitors and decreases uncertainty and financial risk. Because of their value in offering good financial advice, actuaries are used in many industries today and have many responsibilities.
What an Actuary Does
An actuary does many things in the course of a workday, but the best way to sum up their job is to say they analyze how much risk an investment would be for a company and the amount of certainty or uncertainty this particular investment involves. Their knowledge of statistical data, financial theory and analysis help them with their determination. They also design reports, tables and charts to explain their proposals and reasoning to clients. Although they work for various industries, actuaries are most often found in the insurance industry. They are very valuable in helping insurance companies determine how much risk a certain client would be so that they can charge an appropriate premium.
How to Become An Actuary
To become an actuary, an individual must complete at least a bachelor’s degree in actuarial science, mathematics, statistics or a similar analytical field. Students studying to become actuaries complete courses in applied statistics, economics, corporate finance, business, and mathematics. Although not necessarily required, courses in computer programming and computer science are beneficial to actuaries, as well as knowledge of statistical analysis tools, databases, and spreadsheets. Actuaries must also pass certification exams.
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Actuaries can obtain certification from the Society of Actuaries (SOA) and the Casualty Actuarial Society (CAS). The type of certification required depends on where the actuary wishes to work. Actuaries who work almost solely with insurance-based issues can obtain certification through the SOA. Actuaries who wish to work in the property and casualty field can obtain certification through the CAS. These agencies offer two levels of certification: associate and level.
To obtain the associate level of certification, the actuary must pass seven certification exams, which can take four to seven years to do. During this time, actuaries attend e-learning courses and seminars. An additional two to three years is needed to obtain fellowship status. Candidates pursuing fellowship status through the SOA can choose from these five tracks:
- Group and health benefits
- Life and annuities
- Retirement benefits
- Finance/enterprise risk management
As the economy continues to pick up, actuaries will continue to be in demand and should experience many career opportunities. The U.S. Bureau of Labor Statistics (BLS) reports that actuaries could see a job growth of 22 percent during the 2016-2026 decade. Actuaries also experience excellent wages, particularly those who have completed all certifications. As of May 2017, actuaries earned annual salaries ranging from $59,950 to $184,770 with the average wage at $114,850.
U.S.News & World Report ranked actuaries No. 2 in their 2018 Best Business Jobs; No. 3 in Best STEM Jobs; No. 22 in Best Paying Jobs and No. 24 in 100 Best Jobs. In addition to being a real asset to an organization, actuaries are workers who work in a relatively low-stress environment yet have work that’s extremely stimulating, challenging and rewarding.