Actuary Job Description, Skills, and Salary
Get to know about the duties, responsibilities, qualifications, and skills requirements of an actuary. Feel free to use our actuary job description template to produce your own. We also provide you with information about the salary you can earn as an actuary.
Who is an Actuary?
An actuary is a business expert who deals with risk and uncertainty measurement and management. Actuarial science is the name of the related field. These risks can affect both sides of the balance sheet, necessitating asset, liability, and value management expertise. Actuaries evaluate financial security systems, focusing on their complexity, mathematics, and procedures. An actuary is a business specialist who solves difficult financial problems using mathematical and statistical skills.
Actuaries have a strong grasp of the financial system, are analytical, and have excellent problem-solving abilities. Actuaries assist their organizations or clients in resolving complicated financial problems, particularly those involving uncertainty. Mathematics, statistics, economics, actuarial science, insurance, physics, accounting, and finance are all common academic backgrounds for actuaries. Despite this, they all have one thing in common: a fascination with mathematics and statistics.
An actuary is a professional who collects and analyzes data to assist financial institutions in risk management. Actuarial science is the name of their profession. The majority of actuaries work for insurance companies. Actuaries help insurers select what types of policies to offer, where to offer them, and how much they should cost, among other things. It would be irresponsible for insurers to ensure everyone who comes knocking. Actuaries are highly sought-after experts who create and articulate solutions to difficult financial problems.
Actuaries are professionals who assess and manage risk. Actuaries are experts in mathematics, statistics, and business administration. They assist businesses to thrive and deliver value to their customers by doing so. Actuaries assist executives in making strategic decisions and consumers in planning for the future. They work for and with businesses that are primarily concerned with money. Insurance-related businesses include life, health, property-casualty, and even pet insurance. Banking, investments, government, energy, e-commerce, marketing, employee benefits, product development, enterprise risk management, predictive analytics, consultancy, and other services are also available.
The profession has long been regarded as one of the most coveted. Being an actuary has been ranked number one or two in many studies since 2010, and has been in the top 20 for the majority of the last decade.
A competent actuary is not just skilled in math and statistics, but also enthusiastic about how numbers may aid in the creation of more accurate projections and estimates. When establishing new policies, hiring a talented applicant who appreciates analytics and mathematics ensures you’ll discover a dedicated worker who thrives on finding inventive answers to complicated challenges. It’s also a good idea to hire someone with finance or business experience so they can better grasp how to give expert advice on the best policies to implement.
Actuaries interact with a wide range of firm employees, including executives, programmers, finance teams, and accountants, on a regular basis, so knowing how to communicate successfully is critical. They should also have the confidence to express their opinions and persuade decision-makers that particular policies are the best for their company.
Actuaries in the insurance industry often specialize in one or more of the following areas of insurance:
Actuaries can specialize in the following areas of insurance:
- Health insurance actuaries
- Life insurance actuaries
- Property and casualty insurance actuaries
- Pension and retirement benefits actuaries
Outside of the insurance industry, some actuaries apply their knowledge to financial concerns. They establish investment plans, for example, to control risks and maximize profits for businesses or people. Economic, financial, and geopolitical risks are all identified by enterprise risk actuaries.
Actuary Job Description
Below are the actuary job description examples you can use to develop your resume or write an actuary job description for your employee. Employers can also use it to sieve out job seekers when choosing candidates for interviews.
Candidates for this position must be able to fulfill the following tasks:
- Collect and compile statistical data for further investigation
- Calculate the likelihood and cost of occurrences like an accident, death, natural disaster, or illness.
- Design, test, and implement policies to reduce risk and increase the profitability of insurance policies, pension schemes, and other financial products. To clarify proposals and computations, create charts and other demonstrations.
- Explain suggestions and conclusions to a wide range of stakeholders, including company leaders, clients, shareholders, and government authorities.
- Execute sophisticated calculations to determine the probability of various outcomes in the areas of accidents, illnesses, customer demand, and investments.
- Use specialist computer software to crunch numbers and make tables, graphs, and reports on their findings.
- Analyze statistical data in order to provide an analysis
- Create probabilistic and cost estimates for a specific occurrence, such as mortality, natural disaster, or illness.
- Calculate how much different types of insurance plans are likely to payout
- Create graphs and present them at meetings, as well as interpret the data
- Analyze reports to decide the company’s or client’s next steps.
- Calculate the chances of specific business decisions succeeding.
- Project posts of prospective natural calamities, firm employee deaths, or illnesses.
- Create insurance policies or business plans to mitigate a company’s financial risks.
Qualifications of an Actuary
A College Degree: A bachelor’s degree in actuarial science or a related discipline, such as mathematics, statistics, business studies, actuarial science, or other analytical fields, is required for a suitable candidate for the position of Actuary. Some actuaries elect to go back to school and get a master’s degree in actuarial science. To become qualified professionals, students must also complete coursework in economics, applied statistics, and corporate finance, as well as pass a series of exams.
Students must complete a curriculum in economics and corporate finance to become qualified professionals. To prepare for a job as an actuary, students need to pursue classes outside of mathematics and business. Computer science coursework, particularly programming languages, as well as the ability to utilize and construct spreadsheets, databases, and statistical analysis tools, are all beneficial. Students’ capacity to communicate in the corporate sector will be improved by taking writing and public speaking classes.
Licenses, Registrations, and Certifications: The Casualty Actuarial Society (CAS) and the Society of Actuaries (SOA) are two professional societies that support programs leading to full professional registration. Associate and colleague certifications are available through the CAS and SOA. The CAS accredits actuaries who operate in the field of property and casualty insurance, which includes cars, homes, medical malpractice, and workers’ compensation. Actuaries who operate in life insurance, health insurance, retirement benefits, investments, and finance are certified by the SOA.
Both professional associations require applicants to finish economics, finance, and quantitative statistics studies while in college. For associate-level certification, applicants must additionally complete seven tests. Before graduation, most employers expect students to have completed at least one or two of the introductory actuarial tests required for professional certification.
In addition, both CAS and SOA require candidates to attend professional workshops. Both societies require candidates to take e-learning courses.
Because each exam requires hundreds of hours of study and months of preparation, an actuary typically takes 4 to 7 years to acquire the associate-level certification. Actuaries normally take another 2 to 3 years after becoming associates to achieve fellowship level.
Most organizations require Actuaries to have prior actuarial experience, which can be gained through an internship or an entry-level post. Many actuaries start out as apprentices to obtain experience before moving up in their careers. Training, advancement, personality, and interest are all factors to consider for a career in Actuary.
Essential Skills
While college-level education and training are required for this employment, some “soft skills” will offer individuals an advantage when it comes to collaborating with others in an office setting. Some of the essential skills required of an Actuary therefore include:
Analytical Skills: Actuaries must be able to recognize trends and patterns in a wide range of complex data sets.
Computer skills: An actuary’s employment requires them to use computer languages and create spreadsheet models, databases, and statistical models.
Communication and interpersonal skills: Actuaries must be able to communicate complicated ideas and technical facts to a variety of audiences, as well as lead teams and collaborate effectively.
Problem Solving Skills: Individuals must be able to recognize a company’s hazards and establish plans to help the organization manage such risks.
Mathematics Skills: Calculus, probability, and statistics are the major tools utilized in this job to quantify risk.
Computer and statistical modeling software experience
Business and financial ideas are well-understood.
To keep track of several projects or cases at the same time, you’ll need organizational abilities.
Knowledge in specific industries, such as finance or insurance, might be advantageous.
It’s possible that additional certificates and training will be necessary.
How to Become an Actuary
Actuaries must have a bachelor’s degree in a math-related subject and a strong numerical aptitude.
Get a University Degree: A bachelor’s degree in mathematics, actuarial science, or business is required for most actuaries. Statistics, economics, computer science, mathematics, and corporate finance coursework give a strong basis for actuarial tests and entry-level positions.
Go for Internships: To increase their chances of landing a rewarding entry-level actuarial employment, college students should strive to complete at least one internship where they can work alongside seasoned actuaries. Major insurance corporations often offer actuary internships, with interns earning between $15 and $22 per hour. Completion of at least one actuarial exam and a GPA of 3.5 or better are standard prerequisites for such an internship. Candidates for actuarial internships may additionally be expected to know how to use Excel and database/statistical analysis languages like SQL or SAS. Because actuarial science is such a specialized area, completing an internship successfully could lead to instant employment following graduation.
Certification: Actuaries might begin their careers as trainees without having completed any formal training. While on the job, most actuaries receive significant mentoring, training, and time off to study for tests. However, actuaries should pursue associate and fellow-level certification with either the Casualty Actuarial Society / CAS (for actuaries interested in the property and casualty industry) or the Society of Actuaries / SOA (for actuaries interested in the life and health field) (in order to work in the life insurance, health insurance, retirement benefits, investments, and finance industries). The CAS and SOA still require actuaries to fulfill continuing education requirements once they are certified (after four to six years for associate certification and another two to three years for fellowship status).
Students who study for and pass one or more of these actuarial tests while still in school will have a leg up on the competition for entry-level positions. “Probability,” “Financial Mathematics,” “Actuarial Models: Financial Economics,” “Actuarial Models: Life Contingencies,” “Models for Stochastic Processes and Statistics,” and “Construction and Evaluation of Actuarial Models” are among the preliminary tests for initial actuarial certification.
Where to Work
Actuaries are mostly employed by organizations that deal with life, health, property, and casualty insurance. Others are employed by pension funds, consulting businesses, or government agencies. Many actuaries advance to management or executive positions, where they oversee and direct workgroups. Actuaries primarily operate in an office setting for insurance and banking organizations. An actuary who works for a consulting firm may be required to travel to clients’ offices.
Some actuaries prefer to construct policies and strategies for individuals or businesses outside of the insurance market. Actuaries in enterprise roles look for potential financial, geopolitical, and economic risks that could have short- or long-term unfavorable consequences for the organization. Then they’ll collaborate with CEOs to devise sensible plans. Others work for the government, advising on and proposing changes to government programs such as Medicare and Social Security. There are also contract actuaries who go to different organizations and provide consulting guidance on how to develop policies that are most suited for their business.
The following were the largest employers of actuaries:
Finance and insurance are two related fields.
Services in the fields of professional, scientific, and technological expertise
Management of businesses and corporations
Government
Employees that are self-employed
Actuaries are generally part of teams that comprise managers and experts from other professions such as accounting, underwriting, and finance. Although most actuaries work in offices, those employed by consulting businesses may be required to travel to meet with customers.
Actuary Salary Scale
The average annual income for an Actuary is $112,027. The exact wage depends on a candidate’s education, amount of experience, and the company’s geographic location.
In May 2019, the median yearly wage for actuaries was $108,350. Half of the workers in a given occupation earned more than that amount, while the other half earned less. The bottom 10% of earners made less than $64,860, while the top 10% earned more than $193,600.
At the start of their careers, mathematicians, actuaries, and statisticians can expect to earn between $34,608 and $179,969 net each month. This equates to between 37,197 and 134,555 a month for a 44-hour workweek after 5 years of service.