Actuaries are highly trained individuals who analyze and reduce risks for firms. They do this by researching and suggesting company policies, designing insurance and pension plans, and structuring sophisticated models to assess risks.
Actuary positions involve the use of advanced mathematical techniques, such as calculus, and statistics. Actuaries play an important role in the success of companies, and are very important to the insurance industry. They also perform other financial activities that will help firms maximize profits.
Actuary careers can be stressful. Actuaries are required to past several rigorous tests that take 4 to 8 years to complete before becoming fully certified. However, many individuals who enjoy mathematics are drawn to actuary careers because of their lucrative salaries.
States that employ the highest number of actuaries are Connecticut, Kansas, Massachusetts, and New Jersey.
Several factors come into play when calculating the average salary for actuaries, such as where an actuary is employed. Scientific and technical consulting firms tend to the pay the highest salaries. Federal government positions pay slightly less than consulting firms, and insurance agencies tend to the pay the lowest average salary.
According to the Bureau of Labor Statistics, the average salary for actuaries was $84,810 in 2008. The top 10% of salaries exceeded $ $160,780, the middle half of salaries averaged between $62,020 and $119,110, and the lowest 10% fell below $49,150.*
Entry-level positions for individuals with undergraduate degrees started around $56,320.*
*According to the BLS, http://www.bls.gov/oco/
Actuaries receive health, medical, and life insurance benefits that are aligned with professional career standards. They also receive standard vacation time, sick days, and 401(k) benefits.
Job Description and Outlook
Actuaries deal primarily with assessing risks for companies and clients. Actuaries that are employed in the insurance industry specialize in property and casualty or health and life insurance.
Property and casualty actuaries analyze risk for auto insurance companies. They calculate the number of expected automobile accident claims for firms. There are a number of factors that go into these calculations, such as age, sex, previous accidents, drive record, and the type of car. This information allows companies to charge the necessary premiums that will allow them to remain profitable.
Health and life actuaries develop health and life insurance policies. They analyze demographical information such as age, sex, medical history, and family history. This information helps companies predict individuals who are mostly likely to experience adverse health conditions. Companies can then formulate appropriate premiums for individuals based on these factors.
Actuaries that work in the financial sector help to construct pension plans for companies. They can work on other things like helping to set prices for a company’s initial public offer (IPO).
In some cases, actuaries may be called to testify in legislative hearings that are proposing new industry regulations. They may be asked to present data that shows how a certain law might effect a given industry.
According to the Bureau of Labor Statistics, actuary jobs are expected to grow at a faster rate than the average growth rate for all other occupations. Actuary jobs are expected to grow by 21% through 2018. However, competition for job positions is expected to increase as more individuals become qualified for positions.*
*According to the BLS, http://www.bls.gov/oco/
Training and Educational Requirements
Actuaries are usually hired with undergraduate degrees in mathematics, actuarial science, finance, economics, are related business subjects, and a strong background is required in these subjects. In order to meet certification requirements, students must have completed coursework in economics, applied statistics, and finance.
Many companies now require candidates to pass the initial actuarial exams before they are hired. The initial exams test individual’s knowledge of calculus, statistics, and probabilities.
Actuaries are required to become licensed. To gain certification from the Casualty Actuarial Society, students must pass a series of exams. There are seven exams that must be passed in order to reach the Associate or ACAS level certification. The average time to complete this process is 4 to 8 years. The initial exams can be taken while a candidate is still in college.
After candidates obtain the first level of certification, they must pass two additional exams to obtain the next level of certification. Candidates that successfully pass these tests are awarded the Fellowship, or FCAS level certification.
To gain certification in the Society of Actuaries, a candidate must complete a total of seven exams. After successfully completing the initial five exams, students receive the Associate or ASA level certification. Two additional exams are required for students to reach the Fellowship or FSA level.
Actuaries that are employed by the federal government are required to be enrolled by the Joint Board of the U.S. Treasury Department and the U.S. Department of Labor for the Enrollment of Actuaries. Candidates must complete two examinations to become successfully enrolled.
The professional associations that offer actuaries the ability to become licensed are:
- The Society of Actuaries (SOA). They offer certification for two levels, an associate and fellowship.
- The Casualty Actuarial Society (CAS). They also offer certification for two levels, an associate and fellowship.
- The Joint Board of the U.S. Treasury Department and the U.S. Department of Labor for the Enrollment of Actuaries
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