Financially attuned professionals eager to have a real and dynamic impact on the insurance industry can take on roles as actuaries. These experts use math, statistics, and advanced digital modeling to determine the risk of various events and assist insurance companies in creating policies and business strategies. While the exact nature of the data actuaries work with will vary depending on the type of insurance, the role remains the same. These professionals are responsible for turning advanced statistics into actionable insurance policy changes.
The actuary position is defined by its technical and specialized nature. Compared to other roles in the insurance sector and finance at large, there are not many actuaries. For those who have the requisite combination of insurance industry interest, aptitude with data modeling, and top-quality communication skills, a job as an actuary can be a hugely rewarding step on a financial career path.
How to Become an Actuary: Education, Certification, and Work Experience Requirements
Professionals hoping to take on actuary jobs need to gain useful, in-depth knowledge. Due to the specific and high-skill nature of actuarial work, these individuals will also have to aim for professional certification from one of two industry bodies. The U.S. Bureau of Labor Statistics specified that an aspiring actuary’s education should include economic fundamentals, statistics, and corporate finance.
A professional may prepare for actuary work at the undergraduate level, either through earning a degree in actuarial science or mastering in a related subject such as mathematics or statistics. The BLS added that in addition to the hard knowledge of statistics and insurance they’ll use in their everyday work, actuaries should also possess technology expertise as well as soft skills. The former will help actuaries deal with the ever-evolving IT tools involved in analytics, while the latter will help them share their results with audiences in insurance companies, government agencies, and other relevant bodies.
There are master’s level programs that convey some of the knowledge needed to succeed as an actuary. For instance, the Online Master of Science in Finance program at Northeastern University’s D’Amore-McKim School of Business equips students with information about financial and regulatory bodies, as well as an understanding of market forces and hands-on experience providing data analysis. Such an education may prove especially relevant if actuaries plan to follow a career path that leads from entry-level roles to positions such as chief financial officer.
SOA and CAS Certifications
Due to the specialized nature of actuaries’ work, the field is overseen by two industry organizations, the Society of Actuaries (SOA) and Casualty Actuarial Society (CAS). These groups are behind the two most prominent actuarial exams, which require years of study and preparation to master. The BLS noted that the two societies are divided by type of insurance—the CAS is responsible for the casualty field, while the SOA deals with life and health insurance, alongside retirement benefits, finance, and investment.
Both organizations offer two levels of certification, starting with associate level and extending to fellow status. Individuals achieve and maintain these levels of approval by studying financial topics in school, passing actuarial exams, and completing continuing education requirements through attending seminars. A large amount of actuaries’ training and preparation may take place on the job, as new hires are paired with more experienced professionals.
Depending on actuaries’ exact roles, they may be required to receive other forms of certification—for example, there is a Department of Labor and Department of the Treasury license issued to approved pension actuaries. This special requirement is tied to multiple SOA exams.
Actuaries’ Day-to-Day Duties and Responsibilities
Once they have passed the industry exams and taken on their new actuary jobs, what will professionals’ responsibilities be? According to the DOL’s role-based data repository O*Net Online, actuaries will be called upon to manage financial activities, analyze data, and develop policies based on their analytical work. The reports actuaries are tasked with parsing may be far-reaching and involve numbers such as mortality, accident, and sickness rates. Creating accurate forecasts based on these numbers is essential for the development of the insurance industry.
Insurance companies and businesses developing retirement and pension plans count on their actuaries to calculate insurance rates and cash reserve amounts that will enable them to make claims and benefits payments. The BLS noted that actuarial work extends from compiling data to analysis to developing the plans and policies based on that data and presenting their findings to company leaders, government agencies, and third-party clients.
In the health insurance, life insurance, and property and casualty insurance fields, actuarial work involves a focus on contract and policy development. Outside of insurance, enterprises will call on actuaries to design pension plans or identify the risks facing their companies’ financial objectives. The BLS added that there are also public sector positions open to actuaries, whether that means evaluating Social Security and Medicare changes or regulating insurers at the state level.
Salary and Hiring Outlook for Actuaries
The outlook for actuary jobs is complicated by the fact that this is a relatively small field. The BLS noted that while there are approximately 25,000 actuaries active in the U.S. as of 2018, the number will rise by approximately 5,000 between 2018 and 2028, for 20% growth. Comparing that number to the 5% average increase expected across all roles and industries, it’s clear that organizations are making a concerted effort to employ more actuaries.
The highly specialized and in-demand nature of actuary work is reflected in impressive salaries for the related positions. PayScale reported that the average salary for an actuary is $87,950. The median pay is even higher according to BLS calculations—$102,880. PayScale added that some employers in the insurance field pay significantly higher average salaries than others: Liberty Mutual earned the top spot with a figure of $129,000.
According to PayScale, actuary salaries are determined largely by amount of experience in the field. While median salaries among entry-level employees hover around $60,000, longtime participants in the industry make considerably more. The projected median salaries for professionals with 5-9, 10-19, and 20+ years of service are all six figures, demonstrating the value of establishing a place as an actuary.
Graduate-Level Studies to Prepare for Actuarial Work
Professionals interested in seeking a master’s degree that will prepare them to thrive on the actuary career path can apply for an online MSF program, building essential knowledge about the financial sector while working full-time in their current positions. Aspiring actuaries focusing on enterprise or public sector work rather than insurance industry positions may find the Corporate Finance Track in the D’Amore-McKim School of Business’s Online MSF program especially helpful for building their knowledge base.