Consulting Actuary vs. Insurance Actuary: What Are the Differences?

If you’re interested in a career in the insurance industry, you may be wondering what the difference is between a consulting actuary and an insurance actuary. Both roles require a deep understanding of mathematics and statistics, but the focus of each job is different. In this article, we’ll explain the difference between these two job titles, and we’ll provide some tips on how to choose the right career path for you.

What is a Consulting Actuary?

Consulting actuaries are hired by businesses to help them make strategic decisions about risk management. They use their skills in statistics, math and financial analysis to assess the potential financial impact of proposed business ventures. Consulting actuaries help businesses identify areas of potential risk and develop plans to mitigate those risks. They also develop financial models to help businesses make informed decisions about pricing, investment and other strategic decisions. Many consulting actuaries are also certified public accountants, which gives them additional skills and knowledge to help businesses manage their finances.

What is an Insurance Actuary?

Insurance Actuaries are responsible for analyzing risk and developing insurance policies that protect companies from financial losses. They use their knowledge of mathematics, statistics and financial theory to calculate the probability of future events, such as natural disasters, accidents or illnesses. They then use this information to develop insurance policies that will protect companies from having to pay out large sums of money in the event that these events do occur. Insurance Actuaries work with insurance companies, government agencies and other organizations to develop insurance plans that are both effective and affordable.

Consulting Actuary vs. Insurance Actuary

Here are the main differences between a consulting actuary and an insurance actuary.

Job Duties

Insurance actuaries and consulting actuaries share some of their job duties, but they also have several key differences. Insurance actuaries work for insurance companies to determine the appropriate rates for coverage based on the risks and demographics of a particular group of people. They use statistics and mathematics to calculate these rates.

Consulting actuaries work with different clients, often businesses or organizations that need help solving actuarial problems. These professionals may perform the same tasks as insurance actuaries, such as calculating insurance premiums, but they do so for a specific purpose rather than for the sake of an insurance company’s operations.

Job Requirements

To become an actuary, you need at least a bachelor’s degree in mathematics, actuarial science or a related field. You must also pass a series of exams administered by the Society of Actuaries (SOA) or the Casualty Actuarial Society (CAS). The number of exams required varies depending on which organization you choose to pursue your designation with, but it typically takes four to eight years to complete all the exams. In addition to passing the exams, most actuarial organizations require candidates to have several years of professional experience before they can earn their designation.

Work Environment

Insurance actuaries typically work in an office setting, while consulting actuaries may travel to meet with clients. Insurance actuaries often work full time and have regular hours, but they also may work overtime when necessary. Consulting actuaries may work long hours depending on the needs of their client.

Insurance actuaries usually wear professional business attire at work, while consulting actuaries may wear casual clothing that’s appropriate for traveling. Insurance actuaries may spend a lot of time sitting at a desk or computer, while consulting actuaries may spend more time walking around and talking with clients.

Skills

Both consulting actuaries and insurance actuaries use analytical skills to assess risk and make recommendations about how to mitigate that risk. They also both need to have excellent communication skills to present their findings to clients or company leadership.

However, there are some key differences in the skills each type of actuary uses on the job. Consulting actuaries typically work with a variety of clients, so they need to be able to quickly adapt their approach and understanding of each client’s business. They also may need to have project management skills to juggle multiple projects at one time.

Insurance actuaries tend to focus on one company’s risk, so they can develop a deep understanding of that company’s products, services and customers. They also may need to have more specialized knowledge about insurance policies and regulations.

Salary

Consulting actuaries earn an average salary of $125,306 per year, while insurance actuaries earn an average salary of $114,158 per year. Both of these average salaries may vary depending on the size of the company at which you work, location of your job and the level of experience you have prior to pursuing either position.