What Is an Actuary and What Do They Do?
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Actuaries play a vital role in risk management and financial planning. They use mathematics, statistics, and financial theory to analyze the economic costs of risk and uncertainty. They estimate the likelihood of events like death, sickness, accidents, or natural disasters and calculate the economic impact.
Actuaries work in various sectors, including health, life, and property insurance; pension and retirement benefits; public sector roles; and enterprise risk management. Read on to learn about what you can expect in an actuary career, including salaries, work environments, and career outlook.
What Jobs Can I Get After Getting an Actuary Degree?
The job outlook for actuaries is strong, with employment projected to grow 22% from 2023 to 2033, much faster than average for all occupations. The Bureau of Labor Statistics (BLS) reported that the median annual salary for actuaries was $120,000 in 2023.
The demand for actuaries is driven by the need to develop and evaluate insurance products, manage risks, and analyze data. Actuaries are essential in the insurance industry but are also needed for finance, consulting, and government roles. Actuaries will also be needed to evaluate the effects of changing healthcare regulations and climate change.
Getting an actuary degree doesn’t mean you’re limited to being an actuary. Since they need to analyze data and make predictions, actuaries possess skills valued across industries. They can potentially find work in areas such as business, education, science, and government. As with any career, opportunities will expand if you pair your actuary degree with other valuable skills or knowledge.
Below are examples of what you can do with an actuary degree.
| Job | Description | Salary (2023) | Job Outlook (2023-2033) |
|---|---|---|---|
| Survey Researcher | Designs and conducts surveys to collect data on various topics | $60,960 | 0% |
| Market Research Analyst | Designs research studies, collects and analyzes data, and interprets findings | $74,680 | 8% |
| Cost estimator | Assesses the time, money, materials, and labor required for a project | $74,740 | -4% |
| Auditor | Examines financial statements to assess financial risks, evaluate internal controls, and provide recommendations to improve financial practices | $79,880 | 6% |
| Purchasing Agent | Buys products and services for organizations | $77,180 | 7% |
| Underwriter | Assesses and manages the risk of insuring potential policyholders | $77,860 | -4% |
| Urban or Regional Planner | Design and develop urban areas, determine land use, and support community development | $81,800 | 4% |
| Operations Research Analyst | Uses mathematical and analytical techniques to solve complex problems and optimize decision-making | $83,640 | 23% |
| Budget Analyst | Develops and analyzes budgets for organizations by evaluating budget proposals, monitoring spending, and advising on financial planning | $84,940 | 4% |
| Management Analyst | Evaluates an organization’s performance, identifies areas for improvement | $99,410 | 11% |
| Personal Financial Advisor | Helps clients manage their finances and achieve financial goals by providing investment advice, retirement planning, and tax planning services | $99,580 | 17% |
| Risk Analyst | Identifies, evaluates, and communicates risks that affect an organization’s performance | $99,890 | 9% |
| Financial Analyst | Evaluates financial data, market trends, and economic conditions to guide investment decisions | $99,890 | 9% |
| Biostatistician | Applies statistical methods to biological data to improve public health | $104,110 | 12% |
| Software Developer | Develops software, analyzes data, and works on cybersecurity, AI, and cloud computing projects | $130,160 | 17% |
Popular Online Risk Management Programs
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Types of Actuaries
Actuaries can specialize in different fields, each with specific responsibilities and areas of expertise:
- Health insurance actuaries develop policies by predicting the cost of providing care. They consider factors like family history, geographic location, and occupation to make accurate predictions.
- Life insurance actuaries estimate life expectancy based on risk factors such as age and tobacco use. They develop annuity and life insurance policies for individuals and groups.
- Property and casualty insurance actuaries develop policies that insure against property loss and liability from events like accidents and natural disasters. They calculate expected claims based on factors like age and driving history.
- Enterprise risk management actuaries identify and manage risks affecting a company’s objectives. They help executives determine acceptable risk levels and develop strategies to mitigate financial impacts.
- Pension and retirement benefit actuaries design and evaluate company pension plans to ensure future funds will cover benefit payments. They also help develop other retirement benefits and provide retirement planning advice.
- Public sector actuaries evaluate changes to social security or Medicare and regulate insurance rates. They conduct economic and demographic studies to inform public policy.
- General insurance actuaries work in non-life insurance sectors like home, motor, and travel insurance. They assess and manage financial risks related to these products.
- Investment actuaries develop strategies to manage risks and maximize returns for companies or individuals. They apply their expertise outside the traditional insurance industry.
Where Do Actuaries Work?
Actuaries work in a variety of sectors. Here’s a closer look:
Business
In business, actuaries help companies develop financial strategies, manage risks, and optimize operations. They provide insights that guide decision-making and ensure long-term stability.
Education
In education, actuaries serve as professors or lecturers in subjects like mathematics and actuarial science. They contribute to research, curriculum development, and mentorship programs.
Environment
Actuaries assess environmental risks and help develop strategies to mitigate the financial impacts of climate change. They contribute to sustainability efforts by analyzing data and informing policies.
Public Health
In public health, actuaries analyze data to predict healthcare costs and assess the financial impact of policy changes. They help design benefit packages and develop risk management strategies.
Law and Government
Actuaries in law and government evaluate the financial implications of policies and programs. They conduct risk assessments and provide insights to inform policy decisions and ensure regulatory compliance.
Research and Development
In research and development, actuaries use statistical methods to analyze data and predict outcomes. They contribute to projects in various fields, including healthcare, finance, and technology.
How to Become an Actuary
Becoming an actuary involves several key steps. Here is a guide to help you along the way:
- 1
Earn a Bachelor’s Degree in Actuarial Science or a Related Field
Start by obtaining a bachelor’s degree in actuarial science, mathematics, statistics, computer science, or a related field. Courses in calculus, probability, statistics, and finance are essential.
- 2
Pass Initial Actuarial Exams
Pass the Probability Exam (P Exam) and the Financial Mathematics Exam (FM Exam). These exams cover probability, calculus, and risk management and are typically taken before graduation.
- 3
Secure an Entry-level Position as an Actuarial Assistant
Gain practical experience by securing an entry-level job in the actuarial field. Internships are also beneficial for building professional connections and gaining hands-on experience.
- 4
Pass Additional Actuarial Exams
Pass additional exams to earn credentials from the Society of Actuaries (SOA) or the Casualty Actuarial Society (CAS). These exams cover specialized topics like health insurance, life insurance, and enterprise risk management.
- 5
Pursue Advancement Opportunities
Advance your career by achieving fellowship status and exploring specializations. Actuaries with fellowship status often supervise others and provide input to senior management.
Frequently Asked Questions About Actuaries and What They Do
To become an actuary in the U.S. or Canada, you need to pass either seven or ten exams, depending on the designation, or professional certification, you pursue. These exams cover topics like probability, financial mathematics, actuarial models, and specialized actuarial practices.
The major designations are Fellow of the Casualty Actuarial Society (FCAS) and Fellow of the Society of Actuaries (FSA), which require passing etenxams, and Chartered Enterprise Risk Actuary (CERA), which requires passing seven exams.
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