Are you someone with a love of data and statistics? Someone with a keen interest in computer software? If you're a math whiz, or even just someone with a passion for the subject, an awful lot of companies could use you and there are ways to make a career out of it.
One such career is an actuary. It's a career that may be heavily associated with insurance but can be far more wide-reaching than that. If you put in the work needed to become a professional actuary, you could find yourself in a lucrative, stable career. But be warned: it's a lot of work.
If you think this could be a worthwhile line of work that's worth the prep, you'll need to ask: what is an actuary, and how can I become one?
What Does an Actuary Do?
An actuary is essentially an analyst for risk management, doing the math to figure out how risky something might be and determining how best to minimize it in the future.
Actuaries are most often needed in the insurance industry where there is a lot of financial risk involved in health insurance, life insurance and home insurance. Here, actuaries use data and a number of factors to determine just how risky an insurance policy is to give to someone.
An actuary is expected to determine how likely a risky scenario is to play out - and then determine a way to minimize that damage. If risky events keep happening, an actuary could be asked to use their numbers to figure out how to decrease the times they occur.
Much of this is done through computer software, since the math is particularly advanced - it's why you'll need not just math courses, but computer science ones in your education as well.
Actuaries often work with accounts and research analysts depending on the field they are employed in and the additional data they need to successfully determine the risk involved in a project.
Though insurance is the industry most associated with actuaries, plenty of corporations use them when trying to develop a business plan with minimal risk. Government departments may also hire actuaries, as could financial and technical companies. Where there is risk to be managed, actuaries are hired.
How to Become an Actuary
Actuaries are expected to be in high demand over the next several years, so it's smart to get prepared for it sooner than later. Becoming an actuary is a multi-step process that is still ongoing even in the beginning of your actual career.
Here's how to get your start as an actuary.
1. Get Relevant Education in High School and College
Having at least a bachelor's degree is a must if you're looking to get hired as an actuary, but it could be argued that your relevant education starts even before college. You should be taking math courses all four years of high school, and if you can get into an AP math class, you should.
Depending on the college you attend, it's possible that there may be an actuarial program to major in. If not, that's OK. Majoring in actuarial science can certainly help, but it's not a stiff requirement if you have a similarly relevant education. A major relating to mathematics, finance or economics would be perfect.
Because so much math is involved, even if your major isn't literally math you should still be finding ways to take classes in advanced algebra and calculus. If your school doesn't have actuarial science majors but does have some classes on it, make sure to take them. Computer science courses are crucial as well, considering how much of the actuary job is working with software and spreadsheets. Communications classes can be helpful, as can liberal arts courses to ensure you get a well-rounded education.
2. Get Involved in Extracurricular Activities
It's likely been hammered home in your head from an early age to make sure you have a ton of extracurriculars to help you get into college, but it can also be helpful to your career too. The right set of extracurriculars can showcase your ability to balance an intense workload, and that can be a real asset to you when searching for an internship and your first job in the field.
3. Develop Technical Computer Skills
Computer science courses in college will certainly give you a small advantage, but if you want to really become well-versed in the software you'll be using you'll have to go outside of generic classes. If you can find courses on specific programs like Excel or programming languages like SQL, whether at your school or outside of it, they're worth taking. And in your free time, it could help to tinker around with them.
4. Take and Pass 2 Actuarial Exams Prior to Graduating
Actuaries will, throughout their career, need to pass several exams to become a full-fledged actuary. It's recommended that by the time you graduate college you take two of these exams.
The two exams that are taken as the first ones are the Probability Exam (aka Exam P) and the Financial Mathematics Exam (aka Exam FM). Although each of these are, in a way, the beginner's exams for actuaries, they are each three-hour courses that require hours upon hours of studying.
They'll take on topics that are covered in your general coursework, like calculus and probability, as well as risk management. If there are topics you're not as familiar with because you're not in an actuarial sciences program, that's even more studying you'll need to do. With research and practice exams all factored in, you're likely looking at hundreds of hours of studying - per exam.
5. Get an Actuarial Internship
In addition to having passed the first couple of exams, you should have an internship or two under your belt before you graduate. Becoming an actuary doesn't leave a lot of room for free time.
With an impressive resume of relevant courses, extracurriculars, and maybe even an exam passed, you can acquire a solid actuarial internship, working on a team with established actuaries. This helps you gain work experience and build connections, both integral to your resume, and help you develop a sense of what the day-to-day role of an actuary actually is.
Ideally, if possible your two pre-graduation internships should be in different environments - for example, if your first was with an insurance carrier, see what other industries are looking for actuarial interns. This gives you a more well-rounded view of what an actuary does, and may even give you a clearer picture of where you want to do your work.
6. Get Your First Entry-Level Actuarial Job
You've made it this far. You've graduated college, passed some exams and completed internships. Now, it is time for you to make your way into the working world and find a job in your field. Certainly this is easier said than done, but if you've put in the work, studied hard for your exams and paid close attention during your internships (and can expertly showcase all this in an interview), you just may find your first entry-level position.
7. Choose Between SOA and CAS
Concurrently with finding a position, you'll also be determining what direction you want to go in as an actuary. The field you wish to work in as an actuary will determine what association you want to be a part of for your career: the Society of Actuaries (SOA) or the Casualty Actuarial Society (CAS).
The primary difference between the two organizations is the field these actuaries are employed in. The CAS is generally for property and casualty insurance, otherwise known as P&C. The SOA is more geared toward health insurance, retirement and life insurance. Each association also brings with them different exams you will have to take after the first few general exams you already took.
8. Take VEE-Approved Courses for Requirement
Either during college or after (preferably during), regardless of association you will need to take courses on Validation by Educational Experience (VEE) topics. You are required to have VEE-approved courses on topics like economics, accounting and finance and mathematical statistics. Courses specifically approved for this can be found online.
In addition, you will need to have at least two exams passed before putting in a request for VEE credit.
9. Continue Your Exams
You still have exams to take and prepare for, even while you're in the midst of a career. Luckily, many employers will actually sponsor your exams to help you officially become a member of the association you chose.
To become a member of the SOA, or an Associate of the Society of Actuaries (ASA), you'll need to take exams on both long and short-term actuarial mathematics, statistics for risk modeling and predictive analysis - all in addition to the initial exams and VEE requirements.
If you complete all these exams, and some SOA e-learning courses/modules, you have the opportunity to become a Fellow of the Society of Actuaries (FSA). You can take one of six tracks to become an FSA: Corporate Finance and ERM, Quantitative Finance and Investment, Individual Life and Annuities, Retirement Benefits, Group and Health and General Insurance. All of these have their own unique sets of exams and courses.
If you wish to become an associate of the CAS, other exams you'll have to take involve modern actuarial statistics, ratemaking and estimating claim liabilities, regulation and financial reporting, financial risk and more.
How Much Do Actuaries Make?
Why go through all the work necessary to become an actuary? The intense education, the hundreds of hours of studying, all of the exams and added courses? It's to get into a stable career that compensates its employees quite nicely.
According to the BLS, as recently as May of 2017 actuaries had a mean yearly salary of $114,850, very close to its median salary of $101,560. The bottom 10% of actuaries made around $59,950, while those in the 90th percentile are much deeper into a six-figure income at $184,770.
The highest levels of employment for actuaries are with insurance carriers; these actuaries average $113,430 a year. However, the BLS claims that "Business, Professional, Labor, Political, and Similar Organizations" as the industries with the highest mean pay for an actuary at $132,480.
New York is comfortably ahead of other states in terms of actuary salary, with a mean yearly wage of $145,180. D.C. is second at $127,960.
What Is the Job Outlook for Actuaries?
Another reason actuary is a career that could be worth looking into? Stability. Though it's a small field, the BLS predicts that job growth from 2016-26 is 22% - considerably higher than the average for other careers.
A rise in actuary positions can likely be attributed to the need for risk management in industries that tend to have actuaries, such as health insurance. Companies in industries like these will require more people to look at data and crunch numbers.