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Actuary Job Description - An Overview
Do you want to know the actuary job description to see if it fits with your career plans? Here’s some background information first: more than half of all actuaries work in the insurance sector. These professionals have excellent skills in business, probability and statistics, among others.
Here's the focus of the spotlight on some key actuary job descriptions:
Evaluate risk and reduce its impact: Actuaries assess risks from events that span injuries to natural disasters, sickness to disability. What is an output of such an evaluation? It helps the actuaries fix the price for a risk. They also establish financial cushions for the “soft landing" of the effects of the events. Through such work, actuaries help their companies hold a tight rein on the potential losses. Why can a company incur losses? Because it must honor, for example, insurance claims, even if a claim payment is far higher than the premium receipts.
Allocate funds for claims: A company should reserve funds to meet its promises to its clients. How much money should the organization have with it always? Actuaries estimate this amount through the use of mathematical tools and techniques.
Establish report metrics: Actuaries design and implement the standards and methods for financial reports for the senior managers of the company.
Find the best investment options: An insurance company, for example, typically has billions of dollars with it at any point of time. It has so much of cash because high numbers of insurance holders pay premiums to the company on a regular basis. After it allocates funds for the claims and other costs, the insurer has still surplus money.
Such funds, however, cannot lay idle, as the company must improve its bottom line. Here’s where the actuaries pitch in again and advise where the enterprise should sow its money. In essence, actuaries create the blueprint for investments that give the best returns.
Design insurance and pension products: Actuaries design such products to create a win-win situation for the consumer and the insurer. Let’s consider an example: An actuary who works in a health insurance company uses data and complex mathematical models to fix the premium for people with certain demographic and health profiles.
The actuaries decide the premiums with such techniques as the probability calculation of the number of claims, say from certain diseases. This work guarantees the organization has adequate funds to pay for the claims. At the same time, actuaries make sure the premium and the benefits have an edge in the health insurance market.
Forecast the potential and risk for a new business: Say a company that caters its products to customers in the U.S. now wants to test the waters in the Japanese market. Actuaries forecast the demand and risk in that country for what the organization wants to offer. These professionals might also develop the business roadmap for success in the new market.
Does the core actuary job description pique your interest? Learn about the educational and licensure needs to ride on the actuary career bandwagon.
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What Education Do You Need to Work as an Actuary?
A solid background in math is necessary. You can enter the world of actuarial professionals with an undergraduate degree in math or a related field. It’s better if you have an undergraduate degree in actuarial science. A graduate degree in actuarial science, though not essential, can help you gain advanced skills.
Whatever academic avenue you choose to land the actuary job, be sure to take courses in economics, corporate finance and applied statistical methods, in addition to the other courses. Why? It’s because these courses fulfill the VEE (Validation by Educational Experience) needed to earn professional status.
The work of an actuary harnesses training from a range of fields. They include math, economics, finance, management, computer science and business communication. In math, you should gain solid skills in calculus, probability and statistics. Take courses in politics and law, also. What about computer science? Focus on courses like Visual Basic and RDBMS with Oracle or FoxPro. Remember, the greater the breadth in your academic training, the better the prospects for you to be successful in your job hunt.
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Gaining the Professional Actuary Status
The SOA (Society of Actuaries) conducts exams that qualify candidates for the ASA (Associate of the Society of Actuaries) and FSA (Fellow of the Society of Actuaries) titles. If you wish to work as an actuary, for example, in the life or health insurance sector, and want to attain a professional designation, then you must take and pass the relevant exams of the SOA and fulfill its other needs like the VEE.
The CAS (Casualty Actuarial Society) conducts exams to qualify for the ACAS (Associateship in the Casualty Actuarial Society) and FCAS (Fellow of the Casualty Actuarial Society) designations. Actuaries who desire to pursue careers in the casualty, property and related fields as well as attain one or both of the above titles, must not only take and pass the exams of the CAS, but also meet its other needs. One such requirement is the completion of the CAS Course on Professionalism.
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Career Prospects for Actuaries
As you check out the actuary job description, it’s natural if the question, “What’s the job outlook for actuaries?" comes to your mind. Well, here’s the great news: The job prospects for actuaries are excellent. With experience, actuaries have the rich potential to advance into senior management positions and command excellent salaries. Here's proof that the actuary profession landscape is bright:
- The Bureau of Labor Statistics predicts the job opportunities for actuaries “to grow much faster than the average of all occupations."
- CareerCast.com ranks the actuary job third rank in its article, “Jobs Rated 2011: Ranking 200 Jobs From Best to Worst," and indicates the annual income as $87,204.
- US News & World Report lists the actuary profession as one of the best careers in its report, “50 Best Careers of 2011."
- CNNMoney.com rates the actuary profession as the third best career in its article, “Best Jobs in America 2010."
Image Credits: "RISK" image created by the author; Dice - sxc.hu/thegnome54
Bureau of Labor Statistics - Actuaries, at http://www.bls.gov/oco/ocos041.htm
CareerCast.com - Jobs Rated 2010: A Ranking of 200 Jobs From Best to Worst, at http://www.careercast.com/jobs-rated/2011-ranking-200-jobs-best-worst
US News & World Report - The 50 Best Careers of 2011, at http://money.usnews.com/money/careers/articles/2010/12/06/the-50-best-careers-of-2011
CNNMoney.com - Best Jobs in America, at http://money.cnn.com/magazines/moneymag/bestjobs/2010/full_list/index.html
Society of Actuaries, at http://www.soa.org
Casualty Actuarial Society, at http://www.cas.act.org