What Is An Actuary?
An actuary is a person who analyzes data to make forecasts of the risks of something occurring and manages the risks. Actuaries use data to evaluate the likelihood of events occurring and design ways to reduce the likelihood of unwanted events and reduce the impact of those events.
What Do Actuaries Do?
Insurance companies are one of the biggest employers of actuaries. Banks and other financial institutions use actuaries to assess various risks and manage their assets to reduce these risks. Energy, marketing, product development and government industries also employ actuaries.
According to beanactuary.org, here are some of the things actuaries do:
- Determine how much an insurance company should charge for auto insurance, taking into account many factors such as the car that is being insured and details about the driver.
- Develop life insurance products so that parents can enjoy adventurous recreational activities such as rock climbing while feeling secure that their children will be cared for in the event of an accident.
- Determine how much an insurance company should charge for homeowners insurance, considering a number of factors such as where the home is located.
- Determine how much an insurance company should charge businesses for the many different types of insurance that businesses need, such as liability insurance and business interruption insurance.
Education, Skills and Licensing of Actuaries
Actuaries have to have strong math and analytical skills. While there are degrees offered in actuarial science, such a degree is not necessary to become an actuary. A degree in mathematics, economics, business, finance, statistics, data science, computer science, or a related field can fulfill the educational requirements that lead to a career as an actuary.
A bachelor’s degree is typically sufficient. While an advanced degree is not required, such a degree is preferred and could be helpful in other ways, such as leadership roles or teaching actuarial science courses.
How to Become an Actuary
To become an actuary, one must pass a series of licensing exams. There are two main organizations that offer courses and licensing exams, the Society of Actuaries (SOA) and the Casualty Actuarial Society (CAS). The licensing process involves a series of exams, some of which are similar for both organizations, including exams on probability, financial mathematical, models for financial economics, and construction and evaluation of actuarial models.
The OAS offers exams at three levels:
- Associate of the Society of Actuaries (ASA)
- Chartered Enterprise Risk Analyst (CERA)
- Fellow of the Society of Actuaries (FSA)
The CAS focuses its other exams on the property and casualty profession.
“Actuary” A Good Career With Earning Potential Ranging From $100K to $250K… or More
Actuaries are well-compensated for their work. Many in the profession easily reach salaries of over $100,000 annually. Salaries vary, of course, by level of experience, certification, and industry.
Highly-experienced actuaries in the banking industry, for example, could earn $250,000 or more.
The actuarial field is likely to continue to grow, so a career as an actuary is a good choice. The United States Bureau of Labor Statistics, in fact, predicted 18% growth in the number of actuaries being employed from 2014 to 2024.
Actuaries & Legal Skills
Actuaries do need to keep up with regulations and laws that affect the work they do. Professional development is needed and most often paid for by the company the actuary works for.
The Society of Actuaries and the Casualty Actuarial Society offer continuing education courses, seminars, conferences, online webcasts, e-courses, and recordings to help actuaries stay abreast of changes in their field and for members to exchange ideas and knowledge.
With the number of online resources, those new to the actuarial field have plenty of opportunity to learn what their more-experienced colleagues have learned, though, as with most professional fields, only through practice will competency grow.