What Do Actuaries Do?
Actuaries are professionals who use their knowledge of mathematics, financial theory, and statistics to analyze the financial costs of risk and uncertainty in a business. Their approach alerts companies of all sizes to potentially hazardous future events, leaving enough room to minimize financial impact. They are very important in the insurance industry. Are you interested in learning how to become an actuary? Continue reading our guide to gain valuable insight and decide if this is a career for you.
What Skills Are Needed To Become An Actuary?
Since a lot of an actuary's daily work involves accurately solving and analyzing mathematical problems, having a good command over math is an absolute must for the professional. Many firms now choose to run advanced simulations on risk analysis on computers, requiring actuaries to be proficient at using computers and different types of software to achieve company objectives. Actuaries interact with clients, colleagues, and senior supervisors on a routine basis to discuss and present the results of their work. Failure to communicate your points effectively could cost the client severe losses; therefore, it is imperative that an actuary also possess impeccable communication skills.
How To Become An Actuary: Education And Certification
Actuaries require obtaining a bachelor's degree and passing several certification exams before they can become certified professionals. While some universities offer degrees in actuarial sciences, some students choose to complete their undergraduate degree in a specific branch of mathematics like statistics. Others may also choose to undertake a degree in mathematics itself. Over the course of a standard, 4-year undergraduate degree, students are expected to take coursework outside of their major focus of study as well. This includes learning a few programming languages and becoming proficient at creating databases and spreadsheets, along with learning how to use statistical analysis software. These are all vital skills needed to excel in the actuarial field.
Once you complete your degree, you have two options to take. The Casualty Actuarial Society (CAS) certifies actuaries who work in the property and casualty fields, such as automobile or medical malpractice insurance. The Society of Actuaries (SOA) certifies those who work in life insurance, health insurance, or investments and finance. In each of these cases, you will first undergo a set of 7 or 5 exams (for the CAS and SOA, respectively) to become an associate actuary. This process could take between 4 to 6 years because each exam requires several hundred hours of study and preparation. Once the associate phase is cleared, it will take an additional 2 to 3 years for a person to become a fully professional actuary.
Because of the immense time commitment, not many individuals choose to enter this profession. However, the median salary for an actuary in 2010 was upwards of $87,000 and the job outlook is expected to grow at a rate of 27 percent. A higher employment rate is expected in casualty insurance, making it quite an attractive option for aspiring actuaries, despite the strong competition.