What is an Actuary
Actuaries deal with risk. They decide how likely things such as death, sickness, injury, disability, and loss of property are to occur, as well as the costs of these things. They also calculate and determine how much money will be necessary in order to have a certain amount of retirement income. They help design insurance policies and pension plans and try to make sure that they are sound. Actuaries may need to explain their findings to company executives, government officials, and the public. They may also testify in court as an expert.
Most actuaries work for insurance companies. Actuaries make tables that show how likely it is that a claim will be made by a customer. They use these tables to decide how much the company will have to pay in claims. They make sure that the company charges an amount large enough to pay these claims and make a profit. The amount must also be in line with what other insurance companies are charging.
Actuaries usually work in offices and they often work at least 40 hours a week. Some actuaries may have to travel to meet with clients.
How can I Prepare to become an Actuary
Actuaries require a strong background in mathematics, statistics, and general business. They generally have a bachelor’s degree and are required to pass a series of exams in order to become certified professionals.
Normally, actuaries earn an undergraduate degree in mathematics, statistics, or actuarial science, or a business-related field such as finance, economics, or business. While in college, students should complete coursework in economics, applied statistics, and corporate finance, which is a requirement for professional certification. Furthermore, many students obtain internships to gain experience in the profession prior to graduation. More than 100 colleges and universities offer an actuarial science program, and most offer a degree in mathematics, statistics, economics, or finance.
Beginning actuaries often rotate among different jobs in an organization, such as marketing, underwriting, financial reporting and product development in order to learn various actuarial operations and phases of insurance work. At first, they prepare data for actuarial projects or perform other simple tasks. As they gain experience, actuaries may supervise clerks, prepare correspondence, draft reports, and conduct research. They may move from one company to another early in their careers as they advance to higher positions.
Other qualifications required are strong computer skills and the ability to develop and use spreadsheets and databases, as well as standard statistical analysis software. Knowledge of programming languages, such as Visual Basic for Applications, SAS, or SQL, is also useful. Companies also increasingly prefer well-rounded individuals who, in addition to having acquired a strong technical background, have some training in business and possess strong communication skills. Good interpersonal skills also are important, particularly for consulting actuaries. To perform their duties effectively, actuaries must keep up with current economic and social trends and legislation, as well as developments in health, business, and finance that could affect insurance or investment practices.
What is the average Salary and potential Career Advancement for an Actuary
The average yearly wages for actuaries was $95,980 in May 2008.
Advancement depends largely on job performance and the number of actuarial examinations passed. Actuaries with a broad knowledge of the insurance, pension, investment, or employee benefits fields can rise to executive positions in their companies, such as Chief Risk Officer or Chief Financial Officer. These generally require that actuaries use their abilities for assessing risk and apply it to the entire company as a whole. Actuaries with supervisory ability may advance to management positions in other areas, such as underwriting, accounting, data processing, marketing, and advertising. Some experienced actuaries move into consulting.
What are the Certification and Licensing Requirements for an Actuary
Two professional societies sponsor programs leading to full professional status in their specialty: the Society of Actuaries (SOA) and the Casualty Actuarial Society (CAS). The SOA certifies actuaries in the fields of life insurance; health benefits systems; retirement systems; and finance and investment. The CAS gives a series of examinations in the property and casualty field, which includes automobile, homeowners, medical malpractice, workers compensation, and personal injury liability. Four of the first seven exams in the SOA and CAS examination series are jointly sponsored by the two societies and cover the same material. For this reason, students do not need to commit themselves to a specialty until they have taken the initial examination, which tests an individual’s competence in mathematics and helps evaluate their potential as actuaries. If candidates pass the initial exam, prospects can begin taking the next series of exams with the help of self-study guides and courses. Those who pass two or more examinations have better opportunities for employment at higher starting salaries than those who do not. These initial exams can be taken while the candidate is still in college. Many candidates find work as an actuary immediately after graduation and work through the certification process while gaining some experience in the field. In fact, many employers pay the examination fees and provide their employees time to study. As actuaries pass exams, they are often rewarded with a pay increase. Despite the fact that employers are supportive during the exam process, home study is necessary and many actuaries study for months to prepare for each exam. The process for gaining certification in the Casualty Actuarial Society is predominantly exam-based. To reach the first level of certification, the Associate or ACAS level, a candidate must complete seven exams, attend one course on professionalism and complete the coursework in applied statistics, corporate finance, and economics required by both the SOA and CAS. This process generally takes from 4 to 8 years. The next level, the Fellowship, or FCAS level, requires passing two additional exams in advanced topics, including investment and assets and dynamic financial analysis and the valuation of insurance. Most actuaries reach the fellowship level 2 to 3 years after attaining Associate status.
The certification process of the Society of Actuaries blends exams with computer learning modules and coursework. After taking the initial exams, candidates must choose a specialty group and health benefits, individual life and annuities, retirement benefits, investments or finance/enterprise risk management. To reach the Associate or ASA level, a candidate must complete the initial five exams, the coursework in applied statistics, corporate finance, and economics required by the SOA and CAS, eight computer modules with two subsequent essays, and a seminar in professionalism. This process generally takes from 4 to 8 years. To attain the Fellowship or FSA level, a candidate must pass two additional exams within a chosen specialty and must complete three computer modules, a seminar in professionalism, and a course in fellowship admissions. Attaining Fellowship status usually takes an additional 2 to 3 years after becoming an Associate. Specific requirements apply to pension actuaries, who verify the financial status of defined benefit pension plans for the Federal Government. These actuaries must be enrolled by the Joint Board of the U.S. Treasury Department and the U.S. Department of Labor for the Enrollment of Actuaries. To qualify for enrollment, applicants must meet certain experience requirements and pass two exams administered by the SOA, as stipulated by the Board.
How many Estimated Jobs are Available for Actuaries
Actuaries held about 19,700 jobs in 2008. Most worked for insurance companies, but many actuaries worked for firms that offer a lot of different services, such as consulting services.
Employment for actuaries is expected to grow much faster than the average for all jobs through 2018. Examinations to become an actuary are very difficult; those who pass have a good chance for a job. Actuaries working on health care issues will have good chances for a job because many more people will need health care in the future.
What are some similar Jobs to Actuaries
Source - The Bureau of Labor Statistics:
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