What Do Actuaries Do?

Actuaries have a number of responsibilities in the realm of finance, including determining injury risk and developing insurance plans. To learn more about what an actuary does and how to enter this career field, continue reading. Schools offering Risk Management degrees can also be found in these popular choices.

Daily Responsibilities of an Actuary

As an actuary, you'll analyze insurance data related to disability, sickness, injury, mortality, property damage and corporate risk to determine what is the likelihood of occurrence of a particular event, and to help put in place policies to lessen the cost of the event or risk. You'll also use similar data to determine the risk in insuring someone. You use these statistics and your expertise in business, finance and statistics to assist in drawing up pension plans and insurance policies that will continue to be financially sound while in effect.

According to the U.S. Bureau of Labor Statistics (BLS), actuaries work with people to explain the different types of policies available to them, the details of a policy, and the benefits of a policy. They also help companies determine how much they will pay out in the event that someone passes away or sustains an injury. You will develop mathematical formulas to demonstrate to the company providing the insurance that the premiums charged is high enough to cover expenses and claims.

Important Facts About This Occupation

On-the-job TrainingTrainee period
Key Skillsmath and computer skills, problem solving, communication, analytical skills
Work EnvironmentOffices; some traveling to meet with clients
Similar OccupationsAuditors, financial analysts, economists

List of Responsibilities

According to O*Net (an organization sponsored by the BLS), an actuary performs math-based work that includes:

  • Reviewing, designing and administering insurance and annuity plans
  • Determining financial health of pensions, insurance and similar plans, and setting reasonable premiums
  • Creating tables of probability that an event, such as fire, will happen
  • Analyzing statistical information to determine rates related to retirement, disability, illness, accident and death
  • Developing and updating pricing models
  • Recommending to companies whether or not they should accept a client, and how much they should charge to cover estimated costs

Becoming an Actuary

Typically, a bachelor's degree in actuary science, mathematics or statistics is required for a career as an actuary. Classes you may take through your program include business finance, actuarial finance economics, life contingencies, probability, numerical analysis, abstract algebra and theoretical calculus. Though not required, you may also complete an internship in order to get real-world experience and better prepare for entering the workforce.

Also, you must become certified to be eligible to work in this field. There are two levels of certification: associate and fellowship. You can earn certification either through the Society of Actuaries (SOA) or the Casualty Actuarial Society (CAS); the organization you seek certification through depends on your specializations within actuarial science. For example, if you work in automobile insurance, you would go through the CAS, but if you work in life insurance, you would earn professional certification through the SOA.

Once you've determined which certification to seek, you need to complete seminars and online learning courses. The certification process is quite demanding, requiring passage of five exams through the SOA and seven exams through the CAS to earn associate status. In all, it can take four to six years to earn your associate certification and another two to three years to reach fellowship status.

Employment and Salary Outlook

The BLS predicts that employment opportunities for actuaries will grow by 18% from 2014 to 2024. Although this is a much faster than average job growth rate in comparison to all occupations nationwide, actuarial science is a fairly small field, so this job growth only equates to 4,400 new jobs. Also listed by the BLS, the mean annual wage for actuaries was $110,090, as of 2014.

In the coming decade, actuaries will be needed to predict the risk of storms and consequent damage to buildings, to consult on how changing healthcare laws affect insurance and coverage policies, and to assist companies in foreseeing potential financial risks and gains. Competition for actuary jobs is expected to be strong, but if you complete a bachelor's program, an internship and several actuarial science exams, your prospects for entry-level positions should be better.

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