Actuary Job Descriptionn
Actuaries use methods of statistical analysis to determine the likelihood that a specific event will occur. For instance, an actuary may determine the probability that an insurance company will have to pay a customer money for damages to their home under a certain policy. Once they’ve calculated the probability, the actuary is able to determine the premium that the customer should pay for insurance.
To compute the probabilities and premiums, actuaries need to create formulas that take many different variables into account. For homeowner’s insurance, important variables include the value of the home, its age, and the geographic location.
Most actuaries work for insurance companies, where they are responsible for designing insurance policies and determining the premiums that individuals or businesses have to pay based on specific criteria.
Because each type of insurance is very different, most actuaries choose to specialize. Life insurance, health insurance, and property insurance are examples of specializations, and may require unique certifications (see the ‘how to become an actuary’ section below).
Not all actuaries work in insurance, though. Some work for financial firms, where they forecast demand for products, and set prices for securities. In these cases, they work closely with financial analysts, underwriters, and accountants.
Other actuaries work in risk management, where they assess risks facing an organization, and help them implement strategies that have the highest likelihood of success.
Work Environment and Schedule
Most actuaries work in offices at insurance companies and consulting firms.
Actuaries who work in the insurance industry spend most of their time working in an office environment. Overtime is sometimes required, but most are able to maintain regular working hours.
Actuaries who work for consulting firms are normally required to work overtime on a regular basis, because they have to manage many deadlines. Additionally, they may have to travel extensively to meet with clients.
How to Become an Actuary
A minimum of a bachelor’s degree is required for most actuary positions.
If you’re interested in pursuing a career in this occupation, majoring in business, mathematics, or economics would all be good choices. Additionally, courses in computer science that teach programming languages, database development, and statistical analysis tools (such as R) can be very valuable.
There are two organizations that certify actuaries, and it should be your professional goal to earn a certification as soon as you’re able. In both instances, it takes between four and six years to become an associate. An additional two to three years is required to earn fellowship status.
Earning a certification is necessary for continued employment in this occupation. The type of certification that you need to pursue will depend on the type of work you want to do. You should make your choice very carefully.
The Casualty Actuarial Society certifies actuaries who work with property and casualty insurance. This includes automobile, malpractice, and homeowners’ insurance. To become an ACAS associate, you will need to successfully pass seven exams.
The Society of Actuaries offers a certification to those who work in health insurance, investments, finance, life insurance, and retirement benefits. Successfully completing five exams will qualify you for an associate ASA certification.
Many employers require that applicants for entry level positions have passed at least one exam in their chosen certification.
There are currently 21,700 actuaries in the United States, with 1,890 new actuary job openings created each year.
Actuary jobs are not expected to see much growth beyond their current levels in the next decade.
Salaries by State
Actuary salaries can vary depending on your experience, the location, company, industry, and benefits provided. Nationwide, most actuaries make between $68,100 – $127,200 per year, or $32.76 – $61.15 per hour.