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What is an Actuary?
An actuary is a business professional who collects and interprets data relevant to risk and its financial consequences. Actuaries work with insurance companies to help assess premiums for various types of insurance policies and analyze pensions to see if they are adequately funded. Although almost two-thirds of all actuaries work in the insurance industry, they also work in a variety of roles with pension funds, government agencies, credit agencies and pension funds.
Actuaries calculate the probability of events that may occur in the future, identify methods for minimizing the likelihood of negative future events, and reducing the financial impact of negative events when they do occur.
Because of the high level of responsibilities actuaries have within business and government, their positions are generally some of the most highly sought-after jobs in America.
Image Credit: Wikimedia Commons/BotMultichillT
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Becoming an Actuary
Actuaries usually are college graduates with degrees in either statistics and mathematics or a special actuarial science degree. Course work in economics, calculus, business finance and other areas are generally required. After graduation, students can usually begin working in their chosen career field on a contingency basis until they pass their professional certification exams.
While starting their actuarial careers, actuaries are often assigned rotating positions within a company so that they can build a good understanding of all the different roles of an actuary within a corporation. As new actuaries gain experience and progress with their certification exams, they usually find themselves taking on some supervisory roles and receiving higher pay..
The Society of Actuaries (SOA) and Casualty Actuarial Society (CAS) offer most of the licensing options for actuaries. These groups sponsor a series of exams that all actuary candidates must pass before declaring and taking exams for their specialty field. Becoming a certified actuary is no simple task either: the process can take anywhere from four to eight years before all the exams and other requirements for a license are met.
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Starting Salaries for Actuaries
According to the Bureau of Labor and Statistics (BLS) Occupational Outlook Handbook, the average starting salary for an actuary with a bachelor's degree is just over $56,000 annually. The median yearly salary for an actuary is almost $85,000, with half of all actuaries earning between $62,000 and $119,000.
Although these figures are good guidelines, the BLS suggests that too many actuaries are entering the labor market, meaning that downward pressure on the average starting salary of actuary jobs could be experienced. The number of actuary positions is supposed to continue increasing, but not at a rate fast enough to employ all the new actuaries that are graduating college and completing their training.
Also, the age of the data offered by the BLS may be of concern. Although the average starting salary of actuary categories is taken from the latest handbook, the data is still a couple years old.
U.S. Bureau of Labor Statistics (BLS) at http://www.bls.gov/oco/ocos041.htm#oes_links.