Actuary is one of the fastest growing careers in the country. Yet ask most people, and they cannot describe the job. The best answer you may get is, “They work with insurance companies.” Actuaries actually are much more than number crunchers for MetLife. The field is expanding with openings and possibilities, quickly evolving into a viable career.
Actuaries, at the most basic level, adjust rates for insurance policies based on the amount of risk. They use mathematical models to predict the premium, which is the amount you should be paying each month for a policy. For example, they consider health, smoking history and age when analyzing risk.
Actuaries are not limited to the insurance industry, though. They can work as consultants to firms that offer retirement benefits to their employees, determining how much employees should pay into the program. They can also work for the financial industry, working with advisors to analyze and minimize risk on investments. Actuaries also work for the government, from local to federal branches; for example, they calculate and adjust social security payments.
Often people mistake an actuary career as exclusively math-oriented. Carol Marler, an actuary from Indianapolis, Ind., works in reinsurance. Her company buys policies from other insurers who are unable to handle the amount of risk they have taken on. “It’s a business career using applied math,” says Marler.
Actuaries are required to have a bachelor’s degree, a background in math or physics and pass a series of exams to be qualified to practice. College students will often take the first two exams before graduation.
Depending on an actuary’s focus, he or she will take an exam administered by the Society of Actuaries or the Casualty Actuarial Society. The exams are multipart and can take years to complete. For example, the Casualty Actuarial Society requires at least seven exams to qualify. The specifics can be found on their respective websites. Fortunately, many firms will offer support to candidates after they pass the preliminary exams. While most candidates study on their own for the tests, many colleges and universities offer programs in actuarial science.
An actuary should have excellent computer skills and be comfortable with modeling software. A good knowledge of spreadsheet software, like Microsoft Excel, is a requirement of the job.
An actuary’s typical day will consist of research; they design models to analyze risk and correctly price a premium. While most of the day may be spent in front of a computer, meetings and presentations are also a part of the job. Actuaries can provide input on how to design new insurance policies and how to market them to the public. Writing is a sizable component of the job; after all, they must explain their calculations to business-minded executives.
Job outlook and salary
According to the Bureau of Labor Statistics (BLS), the outlook for actuaries is particularly good. While insurance companies may shed jobs in upper level management, according to the BLS, the need for non-traditional actuaries, especially in consulting positions, is high. According to Noor, “The reason for this is they understand that there is risk in society.” The threat of natural disaster will never disappear, and as long as there is risk, society will need actuaries.
Among the median of actuaries, the average yearly salary is about $110,090, according to the BLS. Keep in mind that the starting actuary will earn considerably less than this. Yet through steady promotion and the completion of exams, the actuary can earn salary increases.
For those who love math and business, a career as an actuary can be an exciting combination of the two. Making sense of the world is a near impossible job, for we live in an unstable world, but it is an actuary’s responsibility to address this, assign a value and make sure that we are prepared for whatever comes next.
Brought to you by The University of Pittsburgh at Bradford