The job of an actuary is based on statistical analysis and risk calculation.
In the overview below, we will talk about the aspects of the actuary job as well as salary, duties, skills, and more.
We will also discuss the qualifications and education required by the occupation.
You will read about the necessary experience and advancement opportunities as well.
Article Table of Contents
What Does an Actuary Do
There are two categories of actuaries, Life, and non-Life.
Life actuaries deal with morbidity, mortality, and investment risks while non-life actuaries are engaged in properties and liability insurance areas.
Of course, the work in the two areas comes with different responsibilities and salary.
But the type of work remains the same.
A lot of actuaries work as some type of insurance analysts.
They work to determine which insurance policies might imply the biggest risk for a company.
These tasks include a lot of statistical work and sorting out large amounts of information.
Actuaries also collect statistically essential data, build data models, and analyze the effects on insurance.
To do so, they need to investigate incident data and adjust the terms and rates.
Aspiring actuaries need a college degree in actuarial science.
They may also have a statistical analysis-related degree.
Actuaries are typically employed by insurance companies.
Often, there are also actuary departments in organizations providing financial services.
Actuaries usually work in an office setting.
The schedule they have typically involved regular hours with little to zero overtime required.
PayScale reports that the average salary for an actuary is around $80,000 per year.
However, the actual salary can range between $50,000 and $150,000 per year.
Even though the occupation of an actuary was reported to be one of the least stressful, they have numerous responsibilities.
Most of the actuary tasks are common across various positions, however, some duties may vary from one employer to another.
In the list below, you will find the common responsibilities of the actuary job.
In some positions, they may be tasked with some extra duties while in others, the number of responsibilities can be significantly reduced.
- Analyzing statistics.
- Estimating resentments, accident sickness, mortality, and disability rates.
- Determining the liabilities, premium rates, and required cash reserves.
- Ensuring the payment of benefits.
- Cooperating with underwriters, claims experts, programmers, accountants, and management.
- Assisting companies with the development of new business line plans.
- Improving already operating businesses.
- Formulating probability table based on the statistics.
- Constructing databases on unemployment, natural disasters, fires.
- Reviewing, designing, and helping implement the insurance.
- Developing an equitable basis to distribute surplus earning.
- Assisting with creating company policies.
- Explaining technical aspects to company executives, government officials, shareholders, policyholders, and the public.
- Determining the right policy contract terms for different types of insurance.
- Explaining the terms of the contracts to customers.
- Managing credits.
- Assisting with pricing corporate security offerings.
- Assisting on a contract basis.
- Providing consultations.
- Providing advice and expertise regarding risk management and maximizing credit and investment returns.
- Testifying on business legislation before public agencies.
- Testifying in court as expert witnesses.
- Giving advice to clients or customers on financial matters.
- Analyzing scientific research, investigative findings, and socioeconomic data.
- Creating mathematical and statistical charts, simulation models, diagrams, ideas, and interpretations.
- Developing and maintaining databases.
- Tracking social trends.
There are some skills and abilities that are crucial for this profession.
Below, we have put together a list of requirements most frequently met in the job of an actuary.
- Working knowledge of word processing and desktop publishing software.
- Knowledge of spreadsheet software.
- Knowledge of relational database software.
- Knowing quantitative research methods.
- Very strong knowledge of statistics mathematics.
- Excellent communication skills.
- Working as part of a team.
- Very strong command of the English language.
- Ability to explain complex information clearly.
- Sound judgment and a great business sense.
- Taking a logical approach to problem-solving.
- Very strong computer skills.
- Highly detail-oriented.
- Superior level of self-confidence.
- Understanding business and financial markets.
Training and Qualifications
Actuaries commonly hold a bachelor’s degree or higher in mathematics, statistics, or actuary science.
Additionally, they have to pass a strict exam to be considered for the position.
With these examinations, actuaries can reach a higher professional level.
Actuaries need a license issued by one of the two sponsor programs.
The first is the Society of Actuaries (SOA), and the second is the Casualty Actuarial Society (CAS).
The SOA provides certifications to the actuaries dealing with life and health insurance, investment, retirement, and finance systems.
The CAS licenses actuaries working with property and casualty insurance.
It usually takes four to eight years to reach the Associate professional designation.
You can achieve it by passing various exams and taking part in education programs.
The highest level that the actuary can reach in their profession is the Fellowship level.
It takes two to three more years to achieve after the Associate level.
Experience can greatly influence the salary of an actuary.
According to PayScale, over the course of a 20-year career, the salary of an actuary can grow by more than $75,000.
There are entry-level jobs available to those who wish to start a career in the business.
Of course, entry-level jobs differ from advanced positions a lot.
The salary will depend on the scope of responsibilities.
According to the BLS, the employment rate of actuaries should rise by 18% by 2024.
This is 10% faster than the national average.
A few factors influence this growth.
The two main factors are the increase in older risks and the emergence of newer ones.
Another factor is the increased number of insurance agencies providing financial services.
While the job is one of the most satisfying ones in the financial industry, actuaries have a heavy workload.
However, this job is the least stressful.
One of the possible reasons for that is a very satisfactory salary.