Actuaries

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Duties

Generally, actuaries do the following:

• Compile and evaluate various data and information.
• An event's likelihood and economic impact can be estimated.
• Assess risk reduction strategies such as insurance, investments, and other ventures.
• Determine the required cash reserves in the event of a payment or claim.
• Graphs, tables, and reports can help visualize calculations.
• Inform firm leaders, government officials, shareholders, and clients of their findings.
• Actuaries compile data using database software. Then they use statistical and modeling tools to estimate future claim costs and likelihoods, as well as their own financial capacity.

Accountants, underwriters, and financiers are frequently part of actuarial teams. Pricing security offerings or forecasting demand for new goods are examples of actuarial work with accountants and financial analysts.

Most actuaries work for insurance companies, helping to develop policies and determining rates. They must ensure that premiums are profitable and competitive.

Actuaries who work as consultants are paid per project. Many consulting actuaries review the work of internal actuaries or perform actuarial work for insurance companies too small to hire their own actuaries.

Actuaries typically focus on one type of insurance, such as life or disability.

Long-term care actuaries and health insurance actuaries collaborate to forecast the likely costs of providing care under an insurance contract. They make predictions based on factors like family history, geography, and employment.

Actuaries help create annuities and life insurance policies for individuals and organizations by predicting how long people will live. These estimates take into account risk factors like age and smoking habits.

Accidents, natural disasters, fires, and other calamities are covered by insurance policies developed by property and casualty actuaries. For example, they predict the number of claims resulting from automobile accidents, which depends on the insured's age, driving history, and vehicle type.

Some actuaries work outside of the insurance industry. For example, they develop investment strategies that minimize risk and maximize returns. Non-insurance actuaries include:

Economic, financial, and geopolitical risks can impact a company's short- and long-term goals. They help top executives decide how much risk the company is willing to take and devise ways to mitigate the financial impact of those risks.

Benefits of retirement Actuaries examine a company's pension plans to determine their future viability. They must report to the federal government the results of their evaluations. Pension actuaries also develop other retirement benefits like senior healthcare plans. They may also help with retirement planning.

The duties of a public actuary vary depending on the level of government. Federal actuaries can forecast future benefit commitments or analyze proposed changes to Social Security or Medicare. State actuaries can examine and regulate insurers' rates.

Education

Actuaries must be well-versed in mathematics, statistics, and finance. Actuaries are undergraduates who studied mathematics or another analytical subject.

To become certified, students must study economics, statistics, and corporate finance. This includes programming languages, spreadsheets, databases, and statistical analysis tools.

Internships in health, life, pension, and casualty can help students decide which actuarial path to take.

Certification and Licensing

The Casualty Actuarial Society (CAS) and the Society of Actuaries (SOA) both offer associate and fellow certifications.

Property and casualty insurance actuaries must be certified by the CAS.

The Society of Actuaries certifies actuaries in the fields of life, health, retirement, investments, and finance (SOA).

Both certifications require college-level economics, finance, and mathematics courses. Applicants must also complete professional seminars and exams.

Many new college graduates have taken at least one or two of these certification tests before starting their first job, and many have.

To become an associate actuary, an actuary must complete extensive training lasting up to seven years. After becoming associates, actuaries often have to work for several years more to become fellows. Both the CAS and the SOA require ongoing education.

In addition to life and annuities, the SOA offers fellowship certification in corporate finance/enterprise risk management. Unlike the SOA, the CAS does not offer specific fellowship study paths.

Licensing for pension actuaries is usually done by the Labor and Treasury Departments. To work in this field, you must meet specific experience requirements and pass Society of Actuaries tests (SOA).

Training

Entry-level actuaries are frequently students. They usually work with more senior actuaries who act as guides and mentors. Starting with simple tasks like data collection, trainees progress to more difficult tasks like research and report writing. Actuaries may also work in marketing, underwriting, and product development as part of their training.

Most companies help their actuaries get certified. Businesses may, for example, pay for exams and study materials or give employees extra time off to prepare. An employee who passes a series of exams may be paid for their efforts.

Advancement

Job performance and number of actuarial exams taken are the most common factors. For example, senior actuaries frequently supervise junior actuaries and advise upper management. Accountants with a thorough understanding of risk management and its application to business may become chief risk officers or chief financial officers.

Important traits

Analytical skills Actuaries can identify patterns and trends in large data sets to better predict outcomes.

Communication ability non-actuaries must be able to comprehend complex technical issues. They must also be able to write reports and memos expressing their findings and suggestions.

Computer literacy is required. Actuaries need to know how to program, spreadsheet, database, and analyze data.

Interaction with others. Actuaries must be able to listen and collaborate as leaders and team members.

mathematical aptitude Risk can be calculated using math, statistics, and probability.

Thinking outside the box. Actuaries are experts at identifying threats and devising solutions for organizations.

Pay

In May 2020, the median actuarial salary was $111,030. An occupation's median pay is the wage at which half of the workers make more than it and half make less. Lowest earners made $66,030; wealthiest earners made over $196,010 per person.

Job Projections

Actuary jobs are expected to rise at a substantially greater rate than the average for all occupations between 2020 and 2030.