How Do I Become an Actuary?
If you are good at mathematics and have the analytical skills to recognize risks and the problem-solving skills to minimize them, you might wonder how to become an actuary. In insurance companies and businesses, risks play a large role in determining costs and profits. Actuaries are the business professionals responsible for calculating risks based on data analyses.
Actuaries use computer software and their skills in mathematics and statistical analyses to evaluate the likelihood and costs of a specific type of risk occurring. For example, in the case of health insurance companies, actuaries determine how expensive healthcare is likely to be for individuals based on geography and health risk factors like family history. Life insurance carriers may hire actuaries to help guide the development of their policies based on life expectancy. Because insurance companies make profits by collecting more money in premiums than they pay out in claims, this industry relies heavily on actuaries to determine how much money to charge policyholders in premiums. Outside of the insurance industry, actuaries find employment with companies interested in protecting their profits by managing and minimizing risks. Some actuaries are hired by these companies directly, while others are self-employed or work for consulting firms.
In any work environment, actuaries perform many of the same duties. They gather statistical information relevant to the risk they are studying and evaluate that risk with the use of database and modeling computer software. Actuaries typically seek to learn two crucial pieces of information: how likely it is that the specified risk will happen, and what the financial cost will be to the company in the case that the risk does occur. Though actuaries develop expertise in statistics and mathematics, they often report to management personnel who do not have this advanced knowledge. They must be able to communicate their findings in meaningful ways, such as written reports and numerical charts and tables, to influence how the company writes insurance policies or how it makes investments and structures retirement plans.
To prepare for a career as an actuary, candidates should pursue a bachelor’s degree in actuarial science or another mathematical, statistical or business-related field. Because the use of computers is essential, many students take courses in computer science and programming during their academic careers, as well. Many aspiring actuaries begin their careers as trainees and gain more responsibility with time. As they acquire more work experience, they can begin the process of earning certification from the Casualty Actuarial Society or the Society of Actuaries. Such certifications may result in higher salaries or bonuses as well as more opportunities for advancement.
Actuaries earn a median annual salary of $87,650 and enjoy a positive job outlook, with a 27 percent boost in career opportunities expected by 2020, according to the United States Bureau of Labor Statistics. If you enjoy working with numbers and computers and have an analytical nature, knowing how to become an actuary could be your entrance into a rapidly-growing career in business.
