How to Become an Actuary
If you have an analytical mind and like to work with numbers, then being an Actuary might be a career for you. Continue reading to get details about skills, education and training that would be required to begin working as an Actuary.
What Does an Actuary Do?
In essence, Actuaries are risk managers. It is their job to assess the financial risk of a venture, such as an investment, pension plan or retirement fund. They might help companies make business planning decisions based on risk probability. Actuaries work mainly for insurance companies or financial institutions, but can work in a wide variety of industries.
Strong analytical and mathematical skills are critical for Actuaries. Common Actuary duties and responsibilities include:
- Administrative tasks, such as designing and testing business strategies relating to investments, pensions and similar financial areas
- Clerical tasks, such as preparing reports and charts to explain the results of their analyses
- Technical tasks, such as using software and databases to conduct statistical and analytical studies of compiled data
An Actuary needs to have some knowledge of financial plans and processes and understand the types of events that can impact a business plan or strategy. They should have strong problem solving, decision-making and leadership skills. While the majority of their work is done independently, Actuaries should be able to work with others, as their responsibilities often lead them to interact with other professionals such as financial analysts and financial managers. Strong verbal and written communication skills are crucial, as Actuaries must explain their findings to managers, executives, shareholders and other company leaders.
Other key Actuary skills include:
- Math proficiency
- Ability to think creatively
- Computer literacy, particularly knowledge of statistics and modeling software as well as MS applications
How Do You Become an Actuary
Education and Training
Based on many online job postings, we have concluded that most employers require that job candidates for an Actuary position hold a bachelor’s degree. This degree can be in such areas as actuarial science, business, mathematics, statistics, finance or economics. In addition to taking classes such as applied statistics and economics, students should complete courses in such subjects as computer science, public speaking and communications are important as they will help to develop skills needed to become an Actuary.
Actuaries must obtain certification such as those offered by the Casual Actuarial Society or the Society of Actuaries. Candidates must pass examinations to receive the credentials offered by these organizations. Certification is required in all 50 states before one can be referred to as an Actuary. It can take anywhere from four to six years to complete the study needed to pass these exams. The first certification obtained is that of an associate. Once they are awarded this credential, Actuaries then pursue a fellowship certification. Certification is offered in specialty tracks such as property and casualty, group and health benefits, investments or finance/enterprise risk management. To maintain certification, Actuaries must complete continuing education requirements each year.
One just starting out in this field will generally work at a trainee level with other Actuaries and complete only basic assignments until their experience grows. They might complete their certification requirements while working as a trainee. Some might choose to begin preparing and even taking exams for the associate designation while still in college.
Finding a job
Job opportunities for Actuaries is expected to grow at a faster-than-average rate of 18 percent during the 2014-2024 decade, states the Bureau of Labor Statistics (BLS). This job growth projection includes all industries, from insurance and health insurance companies to any type of business that is seeking to manage its own risks. Those who have already completed exams and an internship while in college might find more success when competing for entry-level positions in this field, the BLS reports.
When conducting an Actuary job search, it is crucial that you have a quality resume. Our library of Actuary resume samples provide you with a good idea of how to construct an effective resume.
Once your resume is ready, search online for Surveyor job opportunities. Draw on your network of professionals you might have met while gaining experience through an internship.
Insights from an Actuary
To find out more about becoming an Actuary, we spoke with John Lowell, a Actuary consultant for October Three Consulting LLC that helps companies create effective cost and risk management plans. Following is our question-and-answer session with Mr. Lowell.
What is the common career path for an Actuary?
I don’t know that there is such a thing as a common career path for an Actuary. Most of us get into the field with little knowledge of what may be in front of us. We start by taking a large number of exams in order to become credentialed and progress from there. Once we become credentialed, some of us will be internal, back office types while others will spend time in client-facing roles. Still others will use the knowledge and skills that they have gained and developed in their actuarial development to enter other fields.
The first key decision will be what area do they want to go in to? Life insurance? Health insurance? Property and casualty insurance? Risk management? Health consulting? Insurance consulting? Retirement consulting? Something else? Depending on which path an individual takes, their career path may be very different. Evaluation of which area to go into, while it’s not final by any means, may be very defining. Budding Actuaries with good social skills and who like interacting with people may want to consider a consulting path. More introverted people with great modeling skills may want to tend toward an internal insurance role.
What should someone consider before becoming an Actuary?
It’s not an easy field. But, it is a rewarding field. Analytic skills of the type found in most Actuaries are both very rare and very much in demand. If you are going to become an Actuary, the first several (usually 5 to 10) years of your career will be spent both learning your field and taking exams that lots of fairly qualified candidates are unable to pass. That’s a big sacrifice, especially if you are considering, for example, starting a family. If you are not prepared to make that sacrifice, it will be difficult to succeed. It’s not unusual during the examination part of your career to spend 300-500 hours every six months studying for these exams. Since that typically happens, in reality over about a 3-4 month period, you can equate that to about 25 hours per week of study while you have a full-time job.
The profession is very math intensive. If you don’t have good math skills, it’s probably not for you. It’s also a very problem solving intensive field. You’ll be asked to use your math and analytical skills to solve problems that you may not have known existed.
Compensation in the field is good. It tends to be best for those people who have not just the core skills necessary for entry to the field, but for those who can combine them with something else.
What type of person excels at this job?
Problem solvers. Creative thinkers. Disciplined individuals.
What are some of the most important skills – hard and soft – for Actuaries to have?
Math, especially probability and statistics. Critical thinking. Modeling. Ability to learn on your own. Knowledge of finance. General business skills. Communications skills. Listening skills.
What do you find to be the most rewarding aspect of being an Actuary?
For me, there is a new problem to solve every day. And, unlike some of what we encounter in school, there is not necessarily a right answer. There may instead be many solutions and there may be one that is most attractive to your audience. Finding that best solution gives me a rush. Oftentimes, there are some very smart people who are also trying to find that best solution. So, essentially besting a peer group for whom I have great respect is pretty special.
How Much Do Actuaries Get Paid?
In the United States, Actuaries earn a median hourly wage of $46.67. The lowest hourly wage for this profession is $28.02 and the highest is $86.78.
Top 10 States for Actuary Salary
Actuaries in the following states make the highest median hourly wage in the U.S.
- Colorado: $74.62
- Kansas: $64.12
- New York: $62.45
- Texas: $55.76
- Maine: $55.58
- Pennsylvania: $55.55
- New Jersey: $55.07
- Massachusetts: $53.74
- California: $53.02
- Washington: $51.54
We have listed the following resources to help you access more information about what being an Actuary entails to determine if this career is for you.
On the Web
Society of Actuaries Blog – A blog that offers discussions about trends, software and career tips as well as questions and answers with professionals in the field.
The North American Actuarial Journal (NAAJ) – Another online SOA publication. This one focuses on articles and discussions concerning actuarial science and how it is applied as well as challenges and problems facing Actuaries and their customers.
Coaching Actuaries – A blog targeting those seeking to enter this field, with articles about credentialing exams and internships.
Society of Actuaries (SOA) – The result of a merging between two Actuary organizations in 1949, SOA offers professional development opportunities, online and print publications, and information about its credentialing exams.
American Academy of Actuaries – With more than 18,500 members, this organization offers members access to newsletters, magazines and other publications addressing professional practices, policies and standards in this field.
Casual Actuarial Society (CAS) – For property and casualty Actuaries, this organization provides seminars, speaker programs, continuing education opportunities, online courses and publications.
Achieving Your Pinnacle: A Career Guide for Actuaries – From the Actuary job market and conducting job searches to choosing a specialization and career practice tips, this book covers everything you’ll need to know about becoming and working in this profession.
Actuaries’ Survival Guide, 2nd edition: How to Succeed in One of the Most Desirable Professions – An extensive study of the Actuary professions, covering everything from credentialing exams to career options and successful practices.
The information in this article comes from the Bureau of Labor Statistics, job postings and other online sources.