What is an actuary?
An actuary is kind of like a fortune teller for businesses, but they use math and statistics instead of a crystal ball. They work out what risks could happen in the future, like accidents or natural disasters, and what these could cost. Actuaries are super important in places like insurance companies, pension funds, and any other business that needs to manage financial risks.
Duties and responsibilities
Actuaries have a big job: figure out the chance of events like illness or accidents and what these could mean in dollars. They use their math skills to help create insurance policies and plans to make sure costs stay manageable.
Besides just crunching numbers, they also help come up with new products, set prices, forecast future finances, and plan big-picture strategies. They often share their findings with top managers and help guide company policies.
Work environment
Most actuaries work in offices, but these days, many can work from anywhere thanks to computers and the Internet. They spend lots of time on statistical software and spreadsheets to make sense of the data they work with.
Typical work hours
Actuaries usually work regular business hours, but sometimes, they might need to put in extra time to meet deadlines or handle big projects. The job is tough but rewarding, offering a great mix of challenge, job satisfaction, and good pay. It’s also known for being less stressful compared to other high-paying jobs.
How to become an actuary
Becoming an actuary is a journey that mixes tough exams with real-world experience. Here’s a simple breakdown of what it takes to get there:
Step 1: Get a bachelor’s degree
Start with a bachelor’s degree in math, statistics, economics, or actuarial science. These majors will give you the math skills needed to tackle the job.
Step 2: Pass the exams
Actuaries need to pass a series of tough exams. In the U.S., these exams are run by the Society of Actuaries (SOA) and the Casualty Actuarial Society (CAS). You might even start these exams in college. They start off common, so you don’t have to choose your actuary specialty right away.
To help study for these, Udemy has courses like Probability for Actuaries Part 1 and Part 2, which gear you up for the tests, and a Mathematical Statistics course that gets you deep into the math needed.
Step 3: Gain experience
Try to get an internship or an entry-level job in the field. This real-world work lets you apply what you’ve learned and understand more about the industry.
Step 4: Get certified at the associate level
Once you’ve passed the initial exams and racked up some experience, you can get an associate-level certification from the SOA or CAS. This proves you’ve got the basic skills down.
Step 5: Go for fellowship
The last big step is to aim for a fellowship. You’ll need to pass more exams and choose a specialty like life insurance, health benefits, or risk management.
How much do actuaries make?
The salary of an actuary depends on various factors such as their level of education, experience, professional certifications, the industry they work in, and geographical location. Those with advanced certifications, such as the FSA or FCAS, often command higher salaries.
Highest paying industries
- Securities: $140,000
- Insurance Carriers: $135,000
- Management of Companies and Enterprises: $130,000
- Consulting Services: $125,000
- Government: $120,000
Highest paying states
- New York: $145,000
- Connecticut: $140,000
- California: $138,000
- Massachusetts: $135,000
- Illinois: $130,000
The average national salary for an Actuary is:
$110,700
Types of actuaries
- Life insurance actuary: These actuaries work out how long people are likely to live so they can set prices for life insurance policies correctly. They use stats to predict mortality rates, helping insurance companies figure out how much money they need to cover future claims.
- Health insurance actuary: Health insurance actuaries crunch numbers on health trends and medical costs to figure out how much health insurance should cost. Their work is crucial for setting prices for health insurance plans and for financial planning in healthcare.
- Property and casualty actuary: These actuaries focus on insurance for things like car accidents or house damage from natural disasters. They assess how likely these events are to happen and help set prices for these insurance policies.
- Pension and retirement actuary: These actuaries make sure pension plans are on solid financial ground. They analyze how long people might live after retiring, investment risks, and inflation to help companies manage their pension funds.
- Enterprise risk actuary: Enterprise risk actuaries look at the bigger picture of a company’s risks. They analyze different risk scenarios to help companies make smart decisions that protect them financially.
- Investment actuary: Investment actuaries use their math skills to help manage investments. They assess different investment strategies’ risks and potential returns to help companies grow their money wisely.
- Reinsurance actuary: Reinsurance actuaries deal with big risks, like major natural disasters. They help design policies that provide a safety net for insurance companies, ensuring they don’t go under after massive claims.
Top skills for actuaries
- Mathematical proficiency: Actuaries are math wizards. They need to be experts in calculus, probability, and statistics because they use these skills to build models that predict what could happen in the future financially.
- Problem-solving skills: Being an actuary isn’t just about doing calculations; it’s also about solving puzzles. They face complex financial issues that need clever and creative solutions.
- Business acumen: They need to see the big picture. It’s not enough to just crunch numbers; they also have to understand economic trends, how financial markets work, and what business strategies might be in play.
- Computer literacy: They use special software to create mathematical models, spreadsheets, and databases to organize and analyze data. Being tech-savvy is a must in this field.
- Communication skills: Even though they work a lot with data, actuaries need to be good communicators. They have to explain their complex findings in a way that people who aren’t math experts can understand.
Looking for a new job?
Browse our national database of actuary job openings and apply today
Actuary career path
Start as an actuarial analyst
Most kick off their careers as actuarial analysts. In this role, you’ll use math and stats to figure out risks, usually with some guidance from experienced actuaries. This is also the time to start working on your professional exams with either the Society of Actuaries (SOA) or the Casualty Actuarial Society (CAS), depending on what kind of actuary you want to be.
Move up to mid-level
As you pass more exams and gain more experience, you can move up to a mid-level actuarial job. Now, you’ll handle tougher tasks like developing new products and setting prices. You might also start managing less experienced actuaries and talk more with clients.
Become a senior actuary
Once you’ve got your full certification (FSA or FCAS), you could become a senior or consulting actuary. Your job now includes more of the big-picture stuff—making strategic decisions and maybe leading a team of actuaries.
Reach for the top
If you’ve proven your skills and leadership, you might climb to top positions like chief actuary or even into executive roles. In these high-level jobs, you oversee all actuarial functions, help shape the company’s strategy, and make crucial business choices.
Similar job titles
Actuary position trends and outlook
The world of actuaries is rapidly changing, thanks to new tech and different business needs. Here’s what’s happening:
- Big Data and predictive analytics: Actuaries are now using big data and predictive analytics a lot more. They use advanced stats to analyze huge amounts of data and predict what might happen in the future.
- Automation and artificial intelligence: A lot of routine number-crunching is being automated, which allows them to focus on bigger and more complex problems. However, it also means they must stay sharp and learn to use these new tools effectively.
- Increased demand for risk management: As the world becomes more complex, companies need help managing different kinds of risks—financial, operational, you name it. Actuaries are in demand to help figure out these risks and plan how to handle them.
Employment projections
According to the U.S. Bureau of Labor Statistics, the demand for actuaries is expected to shoot up by 21% by 2031, way faster than most other jobs. Actuaries with a knack for the latest tech and who can handle big data will likely find plenty of opportunities.
Actuary career tips
Understand the business
It’s not just about math; understanding how a company works, what it aims to achieve, and its industry helps you apply your skills effectively. The better you know the business, the better you can solve problems and contribute to its success.
Refine your communication skills
Actuaries often have to explain tricky math to people who aren’t math experts. Work on being clear and straightforward in both your speaking and writing. Good communication can really boost your impact and reputation at work.
Keep up with regulations
Since actuaries work in areas like insurance and finance that are full of rules, staying updated on these regulations is crucial. Knowing the latest rules helps you give the best advice and keeps your company out of trouble.
Build your network
Connecting with other professionals can open doors to new learning and career opportunities. Consider joining groups like the Casualty Actuarial Society (CAS) or the Society of Actuaries (SOA) to meet peers and find mentors.
Embrace technology
Actuarial work is more digital than ever, with lots of new tech to analyze data better. Being tech-savvy can make your work faster and more effective.
Commit to continuous learning
The actuarial field keeps changing, so keeping your knowledge fresh is critical. Stay curious and up-to-date by reading the latest research, taking courses, attending industry events, and tuning into webinars.
Develop a strong work ethic
Being an actuary can mean long hours and tough deadlines. Dedication and a knack for high-quality work will help you excel and stand out in your career.
Nurture problem-solving skills
Actuaries are natural problem solvers. Sharpen your ability to think critically and creatively to tackle complex challenges and devise smart solutions.
Where the actuary jobs are
Top companies
- Willis Towers Watson
- Mercer
- Aon
- Prudential Financial
- New York Life Insurance Company
Top states
- New York
- California
- Illinois
- Connecticut
- Pennsylvania
Top job sites
- zengig
- Indeed
- Actuary.com
- Simply Hired
FAQs
What does an actuary typically do on a daily basis?
On a daily basis, they use mathematics, statistics, and financial theory to study uncertain future events, especially those of concern to insurance and pension programs. They may analyze data to estimate the probability and likely cost of events such as death, sickness, injury, disability, or loss of property. Other daily tasks can involve designing, testing, and administering insurance policies, pension plans, and other business strategies to minimize risk and maximize profitability.
What skills are most important for an actuary?
Key skills include a strong mathematical and statistical aptitude, problem-solving abilities, and excellent business sense. Given the nature of their work, they must have a firm grasp of calculus, probability, and statistical analysis. They must also be skilled in problem-solving to create complex models that predict future risk. Business acumen is also necessary to apply their mathematical skills to real-world financial and risk management problems.
What kind of education is usually required for an actuary?
One typically needs a bachelor’s degree in a field such as mathematics, actuarial science, statistics, or finance. After graduation, prospective actuaries must pass a series of exams to become certified professionals. In the US, certification is achieved through the Casualty Actuarial Society or the Society of Actuaries.
Can actuaries work remotely?
Much of their work involves data analysis and modeling, tasks that can typically be done remotely. However, they often work as part of a team and may need to present their findings to non-technical stakeholders, which might be more effectively done in person. The ability to work remotely can depend on the specific job and the employer’s policies.
What are the main challenges an actuary faces?
One of their main challenges is the need to make accurate predictions based on uncertain future events. This requires a deep understanding of mathematics, finance, and the industry in which they work. They must also be able to communicate complex technical concepts to non-specialists, which can be quite challenging.
What is the difference between an actuary and a financial analyst?
While both work with financial data, they focus on different aspects. Actuaries use their skills to predict and manage future uncertainties, mainly around risk, often in the insurance and pension industries. Financial analysts, on the other hand, assess the performance of investments such as stocks and bonds to guide businesses and individuals in their investment decisions.
Is the actuary profession regulated?
Yes. In many countries, including the United States, they must pass a series of exams to earn professional certification. In the US, these certifications are administered by the Casualty Actuarial Society and the Society of Actuaries. These organizations also enforce a code of professional conduct that they must adhere to.
What role does technology play in an actuary’s job?
They rely on advanced statistical software to conduct their analyses and create predictive models. They use databases and spreadsheets to manage and manipulate data. Many also use programming languages like Python to automate tasks and build custom models. Advancements in technology, such as machine learning and artificial intelligence, are also creating new opportunities and challenges in risk assessment and prediction.
How does an actuary interact with other professionals in an organization?
They often work in teams with underwriters, accountants, and financial analysts. They need to communicate their findings and recommendations clearly to these professionals, as well as to executives and non-technical stakeholders. In consulting roles, they may interact directly with clients, requiring strong communication and customer service skills.
What impact does economic change have on an actuary’s work?
Changes in economic conditions can affect the probability of events they model, such as unemployment, retirement, or mortality rates. They must consider current and projected economic conditions when making their calculations and predictions.