Career Development

What Does an Actuary Do?

Find out what an actuary does, how to get this job, and what it takes to succeed as an actuary.

Actuaries are professionals who apply their knowledge of mathematics, statistics and risk management to determine the likelihood that an event will occur. They use this information to help companies and individuals manage their risks and prepare for future events.

Actuaries may work in a variety of industries, including insurance, finance, healthcare, and even government. Regardless of where they work, they all have one thing in common: they’re problem solvers. They must be able to identify problems, analyze them, and come up with creative solutions to solve them.

Actuary Job Duties

Actuaries have a wide range of responsibilities, which can include:

  • Calculating workers’ compensation premiums based on claim history and employee data such as age, gender, and industry
  • Conducting research on topics such as mortality rates and birth rates to calculate future pension obligations
  • Communicating with clients about their policies to ensure that they understand their coverage options
  • Evaluating risk exposure for insurance companies and making recommendations for improving profitability
  • Researching new insurance products and pricing methods to ensure that they are viable from a financial perspective
  • Calculating individual insurance premiums based on an applicant’s demographic information
  • Analyzing historical data to identify trends in mortality rates or other factors that may affect risk exposure
  • Reviewing financial statements to determine an organization’s financial health or potential risk to investors
  • Providing advice on financial matters such as risk management, investment planning, and retirement planning

Actuary Salary & Outlook

The salary of an actuary can vary depending on a number of factors, including their level of education, years of experience, and the type of company or industry they work in. Those with more experience and higher levels of education tend to earn more than those just starting out in the field.

  • Median Annual Salary: $125,000 ($60.1/hour)
  • Top 10% Annual Salary: $200,000 ($96.15/hour)

The employment of actuaries is expected to grow much faster than average over the next decade.

Demand for actuaries is projected to increase as organizations hire more actuaries to help address issues related to healthcare costs, retirement plans, and risk management. Organizations will need actuaries to help them understand and address the impact of demographic changes on their businesses.

Actuary Job Requirements

To become an actuary, one typically needs to have the following:

Education: Most actuaries have at least a bachelor’s degree in actuarial science, mathematics, statistics or a related field. Some actuaries choose to earn a master’s degree in actuarial science or mathematics to increase their job opportunities and earning potential.

Training & Experience: Most aspiring actuaries will receive on-the-job training once they are hired. This training will help them learn the specific processes and procedures of the company. It will also help them learn the software and computer systems they will need to use on a daily basis.

Certifications & Licenses: Certifications allow you to prove your skills and qualifications to current and potential employers. You may need to earn certifications to meet the expected skills for an actuary role, or you may choose to earn certifications to advance your career in a different way.

Actuary Skills

Actuaries need the following skills in order to be successful:

Mathematics: Mathematics is the foundation of actuarial work, and it’s important for actuaries to have strong math skills. This includes knowledge of basic arithmetic, geometry, statistics and other mathematical concepts. Actuaries use their math skills to calculate financial projections and other data. They also use math to analyze data and develop models.

Statistics: As an actuary, you use statistics to analyze data and predict future outcomes. Statistics is a necessary skill for an actuary because it allows you to understand and interpret data. You can use statistics to determine the probability of an event occurring and the potential impact of that event.

Problem-solving: As an actuary, you might be required to find solutions to complex problems. For example, you might be asked to find a way to reduce the cost of a health care plan or find a way to increase the amount of money a company has in its pension fund. Actuaries use their problem-solving skills to find solutions to these issues.

Communication: As an actuary, you may need to communicate with clients, other members of your team and other stakeholders. Effective communication can help you convey information clearly and answer questions. You can use your communication skills to explain complex financial concepts and ideas. You can also use your communication skills to negotiate contracts and make presentations.

Analytical thinking: Analytical thinking is the ability to solve problems and make decisions based on the information you have. As an actuary, you need to be able to analyze data and make predictions about the future. This requires analytical thinking, which is the ability to make logical conclusions based on the information you have.

Actuary Work Environment

Actuaries work in a variety of settings, including insurance companies, consulting firms, government agencies, and large corporations. They typically work in offices, but some travel may be required for meetings or to visit clients. Actuaries typically work a standard 40-hour week, but overtime may be required during busy periods. Actuaries must be able to work independently and as part of a team. They must be able to handle multiple projects simultaneously and meet deadlines. Actuaries must be able to communicate complex technical information to non-technical audiences.

Actuary Trends

Here are three trends influencing how actuaries work. Actuaries will need to stay up-to-date on these developments to keep their skills relevant and maintain a competitive advantage in the workplace.

The Need for More Diversity in the Workplace

The need for more diversity in the workplace is a trend that is quickly gaining traction, as businesses are beginning to realize the benefits of having a more diverse workforce. This includes not only racial and ethnic diversity, but also diversity in terms of gender, sexual orientation, and cultural background.

As Actuaries play a key role in helping businesses manage their risk, they will need to be familiar with the benefits of diversity and how to create an environment where all employees feel comfortable expressing their opinions. In order to be successful in this new era of business, Actuaries will need to be able to understand the needs of a wide range of stakeholders and be able to communicate effectively with them.

More Focus on Cybersecurity

As cybersecurity becomes increasingly important, actuary professionals will need to focus on developing skills in this area.

Actuaries are responsible for assessing the risks associated with cyberattacks and developing strategies to mitigate those risks. As cyberattacks become more common, actuary professionals will need to be well-versed in cybersecurity in order to protect their clients’ data.

Greater Use of Big Data

Big data is becoming an increasingly important tool for actuaries as they work to develop more accurate models for predicting future events. By using big data, actuaries can gather information about past events and use it to make better predictions about what may happen in the future.

This trend is likely to continue as more and more data becomes available, which means that actuaries will need to learn how to use it effectively in order to make better decisions.

How to Become an Actuary

There are many different paths you can take as an actuary. You could work in insurance, banking, or consulting; specialize in a particular area of risk management; or focus on a specific industry. No matter which path you choose, it’s important to stay up-to-date on the latest developments in your field. Read journals and articles, attend conferences and webinars, and connect with other professionals online.

You should also keep track of new developments in mathematics and statistics. These fields are constantly evolving, so it’s important to stay current on the latest techniques and methods.

Related: How to Write an Actuary Resume

Advancement Prospects

The actuarial profession is one of the few in which experience and exams lead to advancement. New actuaries start out as associates and, after passing a series of exams, become fellows. The exams cover a broad range of topics, including mathematics, statistics, finance, and economics. The number of exams required for fellowship varies by country, but it is typically between eight and 16. In the United States, actuaries who have achieved fellowship status and have at least five years of experience are eligible to become members of the American Academy of Actuaries.

Actuary Job Description Example

As an actuary at [CompanyX], you will be responsible for the financial analysis of risk in order to help our clients make informed decisions about the potential for loss. You will work with a team of actuarial analysts to develop models that assess risk and determine the financial impact of various events. In addition, you will be responsible for the pricing of insurance products and the development of new products. The ideal candidate will have a strong background in mathematics and statistics, as well as experience in the insurance industry.

Duties & Responsibilities

  • Serve as a technical expert on one or more actuarial teams
  • Conduct analysis to support pricing, reserving, and product development for new and existing business
  • Develop stochastic models to simulate future events and estimate their impact on the company
  • Utilize statistical methods to analyze data and develop actuarial assumptions
  • Prepare detailed reports of findings and present results to management
  • Assist in the development and implementation of actuarial processes and systems
  • Train and mentor junior staff in actuarial techniques
  • Stay abreast of developments in the actuarial field and share knowledge with colleagues
  • Participate in professional organizations and maintain membership in good standing with the Society of Actuaries
  • Serve as a liaison between the actuarial department and other departments within the company
  • Manage projects from start to finish, including scope definition, resource allocation, timeline development, and quality control
  • Perform ad hoc analysis as requested by management

Required Skills and Qualifications

  • Bachelor’s degree in actuarial science, mathematics, statistics, or related field
  • Passing score on at least one actuarial exam
  • 3+ years of experience in actuarial science, with a focus on pension plans
  • Strong analytical skills, with experience analyzing data to identify trends
  • Excellent mathematical skills
  • Ability to communicate complex information clearly and concisely

Preferred Skills and Qualifications

  • Master’s degree in actuarial science, mathematics, statistics, or related field
  • 5+ years of experience in actuarial science
  • Experience working with stochastic models
  • Proficiency in Excel, VBA, R, or similar software
  • FSA or ASA designation

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