Whether you have thought long and hard about an actuary career or have only just heard of the field of actuarial science for the first time, you might be curious about job prospects with this degree. This interdisciplinary degree program is more specialized than a general mathematics degree program, and its primary objective is to prepare students to become actuaries. However, actuaries hold different job titles as they achieve different levels of professional certification and work in different fields.
What Jobs Can You Get With an Actuarial Degree?
Actuarial science, a major which focuses primarily on quantifying financial risk, may sound like a narrow degree path. It’s true that the employment of actuaries is highly concentrated in certain industries, like insurance and finance. Still, the number of potential opportunities available not only across these traditional industries but also in other businesses, agencies and organizations makes this career path more varied and interesting than you might expect.
Insurance Industry Jobs for Actuaries
The insurance industry is, by far, the industry that employs the most actuaries. Seven out of 10 actuaries work in the finance and insurance industry, the United States Bureau of Labor Statistics (BLS) reported.
Within this general industry, there are numerous specialized career fields. After all, there are numerous types of insurance, and just about all of them some sort of calculation of financial risk. Without these calculations, insurance companies wouldn’t be able to determine under what conditions they can offer policies or what they should charge for insurance coverage. Without the work of actuaries, insurance companies could end up insolvent, unable to pay the claims they are legally and contractually obligated to pay, because the amount of money they charged in premiums and the amount of profit they made from the money were not enough to cover the financial risk inherent in their business.
No matter what kind of insurance company or line of coverage an actuary may work for, the end goal of their work is the same. They analyze data using advanced mathematical and statistical techniques to reach conclusions about the financial risk of offering insurance in a given situation. Insurance actuaries working in different types of insurance simply factor in different pieces of data.
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A health insurance actuary, you would calculate the costs of providing healthcare services to determine how much an insurance company should charge policyholders for premiums. There are some legal regulations that affect what data you can use in calculating risk for health insurance premium purchases. For example, under current federal law, a health insurance company generally may not factor an individual’s pre-existing health conditions into the determination of how much to charge in premiums, according to the U.S. Department of Health & Human Services. Health insurance companies can, however, charge higher premiums based on other factors, including the age of the policyholder and whether they smoke.
Life insurance companies, too, use actuaries to determine likely life expectancy and premium rates based on an individual’s risk factors. The difference is that these companies are legally permitted to use data about pre-existing health conditions to determine if and for how much money to offer a life insurance policy, whereas health insurance companies aren’t allowed to deny coverage or charge more because a policyholder has a pre-existing condition.
Other actuaries work in property and casualty insurance, again compiling and analyzing data used to write insurance policies. This type of insurance includes car insurance, homeowners insurance and renters insurance. Calculating risk for property and casualty insurance purposes may encompass different data points. For example, the type (category, make and model) of car the policyholder drives and its age are often factors in the pricing of auto insurance policies, and the qualities of the home itself factor into the pricing for homeowner’s insurance policies.
Actuarial Science Major Jobs in Finance
The insurance business isn’t the only business that deals extensively with risk and its financial implications. The finance industry is full of risks, particularly pertaining to financial investment matters.
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Among actuaries who work in the field of finance, most work in investment strategy or enterprise risk. In this role, you might use your analytical skills to predict the best investments for individuals or businesses. Some actuaries work in pension and retirement benefits to develop and assess pension, 401(k) and other types of retirement plans. You could also become an enterprise risk actuary, working alongside top company executives to recognize potential and minimize potential risks to a business.
Business Jobs for Actuarial Science Students
The unknown presents risks to all kinds of companies, organizations and agencies. Actuaries can use their math and analytical skills to shed some light on the extent of these risks outside the insurance and finance industries, as well. Federal and state government entities sometimes hire analysts and consultants for work in an actuarial science capacity, as do companies in the professional, scientific and technical services industries and company management personnel in all kinds of industries.
Actuaries employed in these nontraditional settings might apply their ability to mathematically calculate the risks of doing business. These calculations might apply to situations such as determining the likelihood of a new product or service launch paying off, figuring out how much companies should charge for their products and services and otherwise analyzing quantitative data pertaining to the company’s operations. Since the business professionals doing this sort of work aren’t always concerned strictly with actuarial science – in terms of the subjects of their calculations going beyond risk – they may hold more general job titles such as pricing analyst, consultant and business analyst. Alternatively, some actuaries in the business world outside of finance and insurance go by titles like product development actuary and consulting actuary.
Health care actuaries working outside the insurance industry – not to be confused with health insurance actuaries – analyze all kinds of healthcare-related data. Depending on their employer and their specific job role, they may work on identifying and quantifying healthcare liabilities and discrepancies in healthcare access or quality, advising on public health policy, tracking trends in public health matters and healthcare costs and analyzing operations service offerings.
Levels of Professional Actuary Certification
Aside from their industry of employment, actuary jobs also differ by level of professional certification. Certification from the Casualty Actuarial Society (CAS) or Society of Actuaries (SOA) is one of the most important aspects of preparing for the actuarial career path. Because completing full professional certification requires actuaries to pass a series of difficult exams, certification is also one of the most challenging parts of pursuing this career path.
Through both of these professional societies, certification is offered at both the associate and fellowship levels. As such, job listings for actuarial science positions may specify the level of the role the employer is trying to fill, such as “Fellow Actuary” or “Associate Actuary.” Reaching associate-level certification may take up to seven years, and it can take another two to three years to finally achieve fellowship certification, according to the BLS. As such, not all working actuaries are at the associate or fellowship level, especially when they are first starting out in the field. Roles for actuaries who haven’t yet achieved associate certification are likely to include job titles such as analyst, assistant actuary or actuarial assistant.
If you want to work as an actuary, you must usually begin taking your exams before you graduate – often, before the end of your junior year of college, to help you get chosen for an internship. However, even the most ambitious student will not reach associate actuary status by the time he or she graduates with a bachelor’s degree. As you continue passing your certification exams, you will see a considerable increase in pay. Many employers offer raises based on how many exams actuaries have completed. You may even be eligible for bonuses when you pass a new exam. Actuarial associates can often expect to earn $69,000 to $88,000 or more per year. Actuaries who go on to attain full fellowship certification often earn six-figure salaries and can see wages as high as $150,000 to $250,000.
Many employers pay for their actuaries to take the exams, and some even offer paid study materials and time off to study.
Preparing for a Career in Actuarial Science
If you want to be an actuary, you must plan on earning a bachelor’s degree, at minimum. The most direct path to an actuary career is a major in actuarial science, but degrees in mathematics or statistics can also suffice. In addition to high-level courses that focus on applied mathematics, statistics and actuarial science, classes in corporate finance and economics are valuable for aspiring actuaries, according to the BLS.
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Your preparation for a successful career in actuarial science should include more than the classes you take. Professional internships are crucial for actuaries, and so is getting an early start on your sequence of certification exams. Extracurricular activities, from clubs to professional development experiences and business conferences, can further help you get ready for your work as an actuary.
The Actuarial Science Degree Path
The great thing about majoring in actuarial science specifically is that your entire educational experience is tailored toward preparing for this career field. Not only do you complete a sequence of major courses that align with the needs of the actuary profession, but you can typically expect to find these courses offered in a structure that supports the undertaking of your first certification exams and recruitment opportunities for internships and full-time job placement in the field. Actuarial science program curricula often include studies in calculus, linear algebra, probability and statistical analysis, finance, accounting, micro and macroeconomics, financial mathematics and statistics for risk modeling.
Becoming an Actuary From Other Educational Backgrounds
If you’re majoring in math or statistics with the hope of winding up as an actuary, you should choose your coursework carefully. Although you will, naturally, take plenty of classes in mathematics and statistics, you should make sure that you are taking the classes that most closely relate to actuarial sciences work, such as financial mathematics. Focus on applied math courses when you can, and take plenty of coursework in statistical analysis and the programming skills needed to run those analyses.
Use your elective courses to build up your knowledge of business, including studies in finance, accounting and economics. Seeking out internship opportunities that will provide you with valuable experience related to working as an actuary is particularly important. To be considered for these internships, you will likely need to have at least one or two actuarial certification exams passed already. Since actuarial exams aren’t built into your curriculum, this means that you need to be on top of educating yourself about when to start taking your exams, which exams to take first and how to prepare for the exams.
A bachelor’s degree is the most common level of formal education among actuaries, with 63 percent of the field reporting this education, according to O*NET. One-quarter of the occupation reported having a post-baccalaureate certificate, and 13 percent had a professional degree.
Career Alternatives for Actuarial Science Degrees
As you consider a degree in actuarial science, you might wonder if you need a backup plan. What happens if you have trouble passing the certification exams, which are notoriously challenging tests? If you find that you don’t enjoy the work of an actuary, will your degree be useless because it is so narrowly focused on this one career path?
An actuarial science degree combines studies in math with studies in business and in computer science and programming. The degree itself may be specialized, but the subjects you study to earn it still equip you with versatile knowledge and skills. Graduates from an actuarial science degree program can also use their education to become business analysts, budget analysts, analysts at intelligence agencies, research analysts, financial analysts, insurance underwriters or insurance claims adjusters. With a little further schooling in a slightly different field of study, you could become qualified to work as a personal finance advisor, investment banker or risk manager.
CNN Business has called actuary “one of the best jobs in America,” citing factors like the high salary, demand, job security and opportunities without the need for a graduate education.
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