How to Become an Actuary

Actuary: A Quick Look
Median Salary $80,965 per year or $24 per hour
Entry-level Education Bachelor’s degree
On-the-job training Long term on-the-job training
Primary employers Insurance Companies, Financial Service Companies
Number of positions (U.S.) 24,300
Job Growth (2012-2022) 26% (Much faster than average)
New positions (2012-2022) 6,300

Actuary Job Description:

Actuaries determine the premium rates that are required and cash reserves that are necessary to ensure payment of future benefits on insurance policies. They must also analyze statistical data and build probability tables to predict risk and liability for future payment of benefits. Actuaries fill in different variables in data models and then analyze the effects it has on insurance policies. This involves examining data from incidents and adjusting the rates and terms of the policy as necessary. An Actuary’s work environment is usually a full-time office setting, but some must travel in order to consult with clients. Discover more about the Actuary job description.

Actuary Salary:

The median Actuary salary is $80,965 and the pay scale range is between $50K and $130K. Factors that contribute to earnings are geographical location, experience, skills, and the employer itself. The average Actuary salary is much higher than other related occupations such as accountants, analysts, and business consultants. Actuaries have other incentives to their salaries, including bonuses, profit sharing, and excellent health benefits.

How to Become an Actuary:

Candidates looking to become an Actuary need to have a Bachelor’s degree in actuarial science or a field related to statistical analysis. One must also pass a series of exams in order to become a certified professional Actuary. A strong background in computers, math, stats, and business is crucial. It is also beneficial to seek any internship positions while in school or upon graduation. Discover more about How to Become an Actuary here

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Actuary Job Outlook:

The Actuary position is predicted to grow 26% between 2012 and 2022. However, because the job field is relatively small this only translates to about 6,300 new jobs. Almost 3 out of every 4 Actuaries have 10 years or less experience. Because positions will not be opening up due to retirement, and because the pay and benefits are on the higher end, competition for job openings will be strong. The healthcare and property/casualty insurance industries are going to see the largest increase in demand for Actuaries due to changing healthcare laws and the recent upswing in natural disasters (super storms).

Actuary Salary:

The median Actuary Salary of all currently employed Actuaries (according to Payscale.com as of July 2, 2015) is $80,965. For a more detailed analysis of how much more and how much less you can make as an Actuary, see below for different salaries according to high/low brackets of the Actuary salary pay scale:
  • The top 10% earn on average $130,000.
  • The top 75 percentile earns $111,000.
  • Median Actuary salary is $80,965.
  • The bottom 25 percentile earns $60,000.
  • The bottom 10% earn on average $50,000.
Other factors contributing to an Actuary’s salary are geographical location, experience, skills, and employer.
  • The top earning U.S. cities for an Actuary’s median salary: San Francisco ($108,416), Hartford ($114,423), and Des Moines ($117,249).
  • The bottom earning U.S. cities for an Actuary’s median salary: Philadelphia ($91,996), Los Angeles ($88,371), and Louisville ($84,439).
  • Actuaries in Atlanta have the lowest median salaries in the country at 22 percent below the national average.
  • Entry-Level (0-5 years): $64,000.
  • Mid-Career (5-10 years): $101,000.
  • Experienced (10-20 years): $126,000.
  • Late-Career (+20 years): $140,000.
  • Skills that can increase ones salary: Financial Modeling (+21%), Pricing (+17%), Financial Analysis (14%). Statistical Analysis is one skill that does not affect salary positively (-8%).
  • Popular employer salaries for Actuaries: Towers Watson ($67-158K), MetLife ($94-175K), and ACE Group ($85-198K).
Compared to other related professions Actuaries are on the higher end of the pay scale in terms of median salary. On average Actuaries make a significant amount ($20-30,000) more than accountants, business consultants, and various types of analysts. The one related occupation that makes more on average than an Actuary is a Finance Manager at $86,000. Actuaries also have other financial incentives such as Bonuses ($521-$24,537), and Profit Sharing (up to $20K) to go along with their salary. Actuaries also tend to have great health benefits: 92% have medical insurance, 80% have dental, and 64% have vision. Only 7% of Actuaries report no benefits.

How to Become an Actuary

Are you interested in learning How to become an Actuary? Candidates looking to become an Actuary need a few things going for them to be competitive when applying for a job. They should be highly familiar with computers, as they will need to quickly manage large amounts of data to discern trends. For this reason a strong background in math, stats, and business is crucial. Anyone looking to become an Actuary would also be wise to seek internship opportunities while they are still in school or after graduation.   Following graduation from high school, those of you interested in becoming an Actuary need a few things going for them to be competitive when applying for a job. A Bachelor’s degree in actuarial science or a field related to statistical analysis is a must in the Actuary Education background. An advanced degree might also be needed for different companies. Prospective Actuaries must also pass a series of exams in order to become a certified Actuary. They should be highly familiar with computers, as they will need to quickly manage large amounts of data to discern trends. For this reason a strong background in math, stats, and business is crucial. Anyone looking to become an Actuary would also be wise to seek internship opportunities while they are still in school or following graduation.

Actuary Job Description:

A typical Actuary job description generally reads the same. Actuaries determine premium rates that are required and cash reserves that are necessary to ensure payment of future benefits. In order to accomplish this goal they must analyze statistical data (mortality, accident, sickness, disability, and retirement rates) and build probability tables to predict risk and liability for future payment of benefits. Insurance companies look to Actuaries to serve as analysts who help the company determine whether or not they should issue an insurance policy and what the premium for said policy should be. An Actuary must examine large amounts of data, so statistical analysis is crucial to the process. In order for insurance companies to reduce their financial risk and maintain profitability, they trust the Actuary to manage this risk by finding a balance between the cost of issuing policies and the exposure to financial loss.   Actuaries fill in the many variables in data models and then analyze the correlation it has on insurance policies. This involves examining data procured from incidents (such as damage to a home and it’s geographical location) and adjusting the rates/terms of the policy as necessary. They may also access data from differing sources when coming up with rate adjustments. For instance, with home insurance an Actuary may take into account the area’s crime and poverty level when coming up with the rates and terms. An Actuary’s primary responsibility in these cases is to always take into account the ongoing re-calculation of risk exposure for the insurance company.   An Actuary’s work environment consists mostly as a full time office setting. Some Actuaries work as consultants, in which case they may need to travel frequently to meet with clients.
  • Combine statistics and information for analysis
  • Estimate probability of the cost of an event such as death, sickness, accident, or other occurance
  • Design and test insurance policies, investments, pension plans, and other business strategies to reduce risk
  • Create charts, tables, and reports to explain calculations
  • Explain findings and proposals to company executives, government officials, shareholders, and clients

Actuary Job Outlook:

Now that you know how to become an Actuary, you might be wondering what the Actuary job outlook is. The Actuary position is predicted to grow 26% between 2012 and 2022 (according to the Bureau of Labor and Statistics). This is higher than the national average, but because of the small number of positions (around 24,000) this growth only translates to about 6,300 new jobs.   Of the current Actuary field:
  • 15% have less than 1 year of experience
  • 32% have 1-4 years
  • 26% have 5-9 years
  • 17% have 10-19 years
  • 10% have 20 or more years
This means that 73% of current Actuary positions are filled with employees that have worked for 10 years or less. This means that not many positions will be opening due to retirement. For this reason, and the overall small size of the occupation field, competition for these jobs will be strong. Those who have passed at least two actuarial exams and have some experience (as with an internship) have the best chance for an entry-level position. On a side not this is a male dominated profession with females only making up about 26% of all Actuary positions.   Actuaries generally work for insurance companies and financial service companies, but one field that looks to dominate the increased need for Actuaries is the health insurance industry. With the recent changes in healthcare laws more Actuaries will be needed to evaluate how changes in coverage and clientele relate to insurance policies. Actuaries will also be needed to consult with different companies concerning new healthcare plans in their benefit programs.   Actuaries working in Property and Casualty Insurance will also see a spike in job growth if the trend of yearly powerful storms continues. The increased risk that communities face will need to be evaluated and assessed accordingly. Actuaries will not only have to predict the likelihood of damaging storms but also have to calculate the cost of insuring vulnerable properties and create specialized policies.

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