Actuary Job Description
Actuaries play a vital role in the insurance, financial, and consulting industries, leveraging their knowledge of statistics and a background in risk assessment to develop financial projections and risk models for health and life insurance plans, investments, and securities portfolios. An actuary will frequently work closely with financial analysts and underwriters to analyze and assess data and develop insurance plans and financial projections that minimize risk and reduce the financial impact of uncertainty. This role requires extensive training and testing, along with an analytical mind and a background in probability, statistics, and mathematics.
Actuary Duties and Responsibilities
While an actuary’s day-to-day duties and responsibilities are determined by where they work, there are many core tasks associated with the role. Based on our analysis of job listings, these include:
Data Analysis and Assessment
One major responsibility of an actuary is data analysis and assessment. An actuary typically spends extensive time researching, gathering information, and analyzing a high volume of data in order to develop statistical models and derive insights from actuarial data. This requires sound judgment, as an actuary must also assess the validity and quality of the data used to make decisions.
Risk Assessment and Modeling
Actuaries use their background in statistics, probability, and mathematics to develop risk models for financial and insurance industries. Most actuaries use or develop statistical modeling programs to assess risk and project long-term financial performance. In both insurance and financial fields, actuaries use statistical modeling to determine financial risk and develop strategies to mitigate that risk.
Investment and Insurance Plan Development
In both the financial and insurance sectors, actuaries contribute to the development of financial projections and risk management. Actuaries working in the financial industry help develop investment portfolios and prospectuses for these portfolios by balancing risk and return while mitigating the financial impacts of uncertainty in the market. In the insurance industry, actuaries develop insurance plans, examine risk pools, and determine premiums that ensure long-term financial viability.
An actuary is often responsible for communicating directly with clients, whether it is to gather data or report on findings and risk factors. This is particularly vital for actuaries who work in the consulting field since they often interface directly with clients to address specific questions or concerns related to financial risk and projections. Consulting actuaries have to be able to clearly and concisely explain risks to their clients to aid in projections and risk management.
Team Collaboration and Coordination
In addition to communicating with clients, most actuaries work as part of a larger team made up of financial analysts and underwriters. Actuaries frequently present data and findings to other team members, requiring them to translate complex mathematical and statistical data into more accessible terms.
Actuary Skills and Qualifications
Highly analytical, actuaries assess, analyze, and interpret data ranging from mortality, injury, and illness statistics to financial market projections. In addition to a bachelor’s degree and completion of actuarial examinations, companies typically seek applicants with the following skills:
- Mathematical analysis – an actuary needs to have an expert-level grasp of mathematics, probability, and statistics to accurately determine and mitigate risk
- Statistical modeling – it is also vital that actuaries have advanced skills in statistical modeling since they will need to use data to develop risk assessments and models
- Financial forecasting – in both insurance and financial services fields, actuaries need a solid grasp of financial forecasting and a keen understanding of how financial performance affects risk
- Data literacy – actuaries need a high level of data literacy in order to analyze, assess, and validate data
- Communication and presentation – actuaries often work as part of a team, collaborating to develop insurance plans and investment portfolios. In this role, effectively communicating and presenting findings is a necessity
- Process enhancements – an actuary should also have some experience with process enhancements and improvements to improve the accuracy and efficiency of gathering and analyzing data, as well as preparing risk models
Actuary Tools of the Trade
Actuaries work in office settings, and need to be familiar with standard office software in addition to the following:
- Statistical modeling software (Tableau, Domo, MATLAB)
- Database software (SQL, Microsoft Access)
- Programming languages (R, Python)
- Financial programs (Safe Toolboxes, Julia)
Actuary Education and Training
Actuaries typically need a bachelor’s degree in a related field, such as mathematics, statistics, or actuarial science. In addition, actuaries must pass a series of exams provided by the Casualty Actuarial Society or the Society of Actuaries, depending on which field the actuary intends to enter. Both of these organizations require applicants to have completed college-level coursework in economics, finance, and statistics. Actuaries typically take between four and 10 years to achieve full certification.
Additionally, many actuaries complete courses in computer science and programming to develop skills in writing and utilizing programs to develop risk models and build databases to assist in managing and analyzing data. An internship during college can also increase an actuary’s likelihood of finding a job in this competitive field.
Actuary Salary and Outlook
As of May 2016, the Bureau of Labor Statistics stated that the median yearly wage for actuaries was $100,610. The highest 10 percent of actuaries earned as much as $186,250, while the lowest 10 percent earned $58,910. Generally, actuaries earn more as they achieve higher levels of certification, so actuaries can expect their pay to increase based on their education and completion of further training.
The actuarial field is expected to grow at a rapid pace, with employment projected to grow 22 percent from 2016 to 2026. However, the BLS notes that the field is relatively small, which means the actual number of jobs added will be just over 5,000. It is also worth noting that applications for entry-level actuary positions are also expected to be very competitive over the next few years as more students are taking actuarial exams.
Actuary Helpful Resources
If you are interested in learning more about working as an actuary, there are many useful industry resources that provide further information and opportunities:
Society of Actuaries – The homepage for the Society of Actuaries, with information on membership and opportunities for professional development.
Actuaries’ Survival Guide, Second Edition: How to Succeed in One of the Most Desirable Professions – A wide-ranging look at the actuarial field, from exams to career profiles.
The Infinite Actuary – Lessons, information, and sample tests to prepare for actuarial exams.
Achieving Your Pinnacle: A Career Guide for Actuaries – Tips and insights on beginning a career as an actuary, building essential skills, and developing a specialization.
Casualty Actuarial Society – The Casualty Actuarial Society features an online community and information on exams, admissions, and professional development.
The Traveling Actuary – Actuarial analyst Stephanie Borowiec offers insights and tips, from career development to industry trends.
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