Associate Actuary: Salary and Career Facts

Research what it takes to become an associate actuary. Learn about the education requirements, job duties, certification process and salary to find out if this is the career for you. Schools offering Risk Management degrees can also be found in these popular choices.

What is an Associate Actuary?

Actuaries forecast and manage the cost of risk within the insurance industry. They gather statistical data to calculate risk, such as death and natural disasters, and design useful prevention plans. They also work to increase profit and set premium costs. They often use computer software to complete their work and collaborate with other professionals. The following chart gives you an overview of what you need to know about entering this field.

Degree Required Bachelor's degree
Key Responsibilities Compile and analyze data
Calculate cost and likelihood of illnesses, disasters, accidents
Develop and test insurance policies
Licensure/Certification Not required, but certification programs available
Job Outlook (2014-2024) 18%*
Median Salary (2015) $97,070*

Source: *U.S. Bureau of Labor Statistics (BLS)

What Are the Job Duties of an Associate Actuary?

An actuary is someone who uses statistics and mathematics to forecast and manage the cost of risk within the insurance industry and other financial settings. For example, you might determine the probability of an accident or injury and calculate how much such an occurrence could cost a company. You might use these forecasts to price insurance, but actuaries also provide investment advice and design and evaluate employee benefit plans. If you wish to gain the title of 'associate actuary,' you need to earn certification through the Casualty Actuarial Society (CAS) or Society of Actuaries (SOA).

More than half of all actuaries work in insurance. As an associate actuary in this industry, you use complex modeling techniques that require knowledge of finance and statistics to determine the probability and impact of different events, such as the number of insurance claims that might result from a car accident. To do this, you consider a number of different factors, from a person's driving history to the type of automobile they drive. Then, you make sure the insurance premium charged not only covers the potential claim costs, but also simultaneously allows for profit and competitive pricing.

Similar modeling is done for the life insurance and health insurance industries, where you might predict life expectancy and the likelihood of disease based on family history and various demographic factors. As an associate actuary, you might also find a job in another financial service industry or government agency or work as a consultant, researcher or teacher.

Do I Need a Degree?

To become an actuary, you typically need a bachelor's degree and a strong foundation in business, statistics and math. You might major in any of these areas or focus on economics or finance. Bachelor's degree programs specific to actuarial science are also available. An actuarial science program typically includes courses in accounting, management science, business law, investment theory, business ethics and risk management. In order to qualify for professional certification, the program you choose must also include courses in corporate finance, applied statistics and economics. To gain experience in the field, you might consider completing an internship during your undergraduate education.

A graduate degree isn't generally necessary to work as an actuary, nor do you need one to become certified, but master's degree programs in actuarial science are available from several postsecondary institutions. Considering the amount of time it takes to get certified, many actuaries may opt for certification over an advanced degree, but a master's degree may be necessary if you decide to teach at the college or university level.

How Do I Get Certified?

Certification isn't required to work in this field, but it could lead to more employment opportunities and a higher starting salary. It's also essential if you want to become an associate. Some employers may require candidates to have passed the associate exam prior to employment, while others may pay for current employees to pursue certification.

Both the CAS and SOA offer associate-level certification. Shared requirements include minimum education requirements and the completion of a professionalism course. Both certifications are exam-intensive; the CAS requires you to pass seven exams in order to become an associate actuary, whereas the SOA process involves five exams. In addition, SOA certification requires you to complete eight computer modules and two essays. The SOA also requires you to select a specialty, which could include group and health benefits, investments or retirement benefits. Regardless of which certifying body you choose, this process can take anywhere from 4-8 years and generally requires a good deal of at-home study.

If you're interested, both the CAS and SOA also offer a second certification level called the fellowship level. Gaining fellowship certification generally takes 2-3 years.

What Might I Earn?

Based on reports from the U.S. Bureau of Labor Statistics (BLS), this field is expected to grow much faster than the average for all occupations at a rate of 18% from 2014 to 2024. Despite this growth, qualified candidates are expected to outnumber available actuary positions, which will likely lead to keen competition for jobs. As an associate actuary, you might expect to earn about $97,070 per year, which was the median wage reported for actuaries as of May 2015 (www.bls.gov).

What Are Some Related Alternative Careers?

Related careers include accountants and auditors, budget analysts and cost estimators. Accountants and auditors evaluate the efficiency of financial operations, the accuracy of financial records and the quality of tax filings. Budget analysts manage the financial organization of institutions. Cost estimators specialize in assessing the resources needed to provide services and manufacture products. All of these careers require a bachelor's degree.

To continue researching, browse degree options below for course curriculum, prerequisites and financial aid information. Or, learn more about the subject by reading the related articles below:

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