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What is an actuary?

By Edited Nov 13, 2013 0 0

An actuary is a top paying job that can easily surpass $100,000 a year in salary, yet most people are unfamiliar with the job and the role that an actuary plays in the business world. An example of a laughable survey response regarding what an actuary is: a place for dead actors! This is the type of general misunderstanding regarding actuaries in America. It is probably the most mysterious and least understood job that pays over $100K!

Actuaries are well trained and must advance through a rigorous series of heavily mathematics based testing to achieve certification. This takes place on a national scale and is administered by either the Casualty Actuarial Society (CAS) or the Society of Actuaries (SOA). The test emphasis is on probability, since this is the bread-and-butter tool used to devise plans and predict cash flows for a number of applications and asset defense.Until recently, anyone could sit for the exams, but now it a college degree is required to attempt the tests.

Acturial Exam Probability Review SOA Exam P
Got car insurance? How about a pension? Worried about natural disasters? The actuary is concerned with all of these things. You can rest assured that an actuary was involved in determining how much you pay for insurance or how much your employer must pay to cover your retirement benefits. This information is carefully determined from mortality tables and other probability determinations. These predictions guide how much money is needed to offset risk and still be profitable as well as how much money a company or individual must set aside to meet future obligations (especially annuity payments).

So really the job boils down to predicting risk and thinking up ways to stop bad things from happening. Another role is making sure measures are in place to protect assets and implement steps to recover quickly from the damage caused if and when something does happen. Al

l of this takes skills beyond mathematics. In addition, an actuary has to have broad-based knowledge of computer algorithms, economics, politics and many other areas to be successful--not to mention good people and communication skills. Many people think "soft" skills are not important in actuary life, but many employers are increasingly looking for soft skills in every industry.

While for many, this may seem like nothing more than a position as a glorified bean counter, it couldn't be further from the truth. This dynamic field is one of the most respected jobs in America and is consistently rated as on of the Best Jobs for 2010 in many national polls. The workplace environment is varied and ranges from banks and financial institutions to private companies and even local and federal government. Any entity that needs to evaluate risks and determine how best to diversify holdings to offset potential losses will need the help of an actuary. The demand is high.

Sound appealing? If you are good with numbers and crunching data while not losing sight of the big picture, this may be the profession for you. You will literally live on the edge of risk. The road to becoming an actuary is arduous, but the personal satisfaction and monetary reward is, indeed, amazing!



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