Are you deciding on your college career path? Are you thinking the pandemic offers you an opportunity to change career direction? You should consider an actuarial career path. Here is the why and how of becoming an actuary.
Why Becoming an Actuary is Worth It
Between 2018 and 2028 the Bureau of Labor Statistics says demand for actuaries will grow by 20%. The historical unemployment rate of actuaries has always hovered around 0%. The salary outlook as reported by U.S. News went from $99K median salary in 2010 to $110K in 2014 and $115K in 2018. Payscale.com reports that the average pay of entry level actuary jobs is $60,040. After reaching the associate level pay should be over $100K and the top 90th percentile of actuaries at the fellowship level earn over $700K/year when all compensation is included. There is high job satisfaction rates in this career as actuaries feel valued by their organization and feel they are impacting society for the better through their work.
Of course you must have an aptitude and an interest in the work itself. While candidates for actuarial entry-level positions have been known to come from a variety of college undergraduate majors, even liberal arts majors must take mathematics/statistics and computer programming coursework. Over 100 colleges and universities offer an actuarial science major and coming out of your undergraduate program having SQL, C++, SAS and VBA programming skills is almost essential.
Big Data is expanding the roles of actuaries from asking the more classic descriptive and diagnostic questions to performing predictive and prescriptive assessments. Applying predictive analytics to marketing, customer engagement, underwriting, product development, claims processing decision-making and analyzing customer behavior is becoming the new norm.
Working in large organizations with a more buttoned-up corporate approach should be something you are interested in. GetEducated.com reports that almost 72% of actuarial jobs are in the insurance industry, 17% in the consulting field and 9% are in corporate management.
Choices in Becoming an Actuary
According to AnalystPrep.com you have two routes in an actuarial career: You can be a life actuary or a non-life actuary. Life actuaries focus on morbidity risk, the likelihood of a person contracting a disease, investment risk, what is the probability of incurring a loss, and mortality risk, how many individuals will die before their expected time? Answering these questions supports long term care insurance, annuities, disability insurance, life insurance, health savings accounts, pensions and health insurance.
Non-life actuaries, typically called property and casualty actuaries, specialize in legal and physical risk affecting people and property. This work impacts products like worker’s compensation, terrorism insurance, malpractice insurance, auto insurance, commercial property insurance, marine insurance, product liability insurance and homeowners insurance.
How to Become an Actuary
The path to becoming a Life Actuary or a Non-Life Actuary is very clearly laid out by the Society of Actuaries and the Casualty Actuarial Society respectively. While it is presented very clearly what is required it is not easy to achieve. Nine to ten exams are required and the failure rate on each exam varies between 40-60%. The good news is entry-level candidates can take 2-3 exams while in their undergraduate program making them very in-demand candidates for entry-level actuarial positions. The rest of the exams are almost always funded by your employer. Employers often also allow you paid time to study and prepare for each exam.
How to Become an Associate and Fellow of the Society of Actuaries
Validation of educational experiences outside the SOA education system (VEE), completing the examinations listed below, completing an e-learning course, a proctored project assessment and a professional seminar are all requirements for accreditation.
Associate Exams: Probability, Financial Mathematics, Investment and Financial markets, Long-Term Actuarial Mathematics, Short-Term Actuarial Mathematics, Statistics for Risk Modeling and Predictive Analytics.
Fellowship candidates choose a specialty track and complete the requirements for that track, as well as having completed all the Associate requirements and a Fellowship admissions course. Typically at least three more exams are required in the specialty area.
How to Become an Associate and Fellow of the Casualty Actuarial Society
Similar requirements are in place to become an associate of the casualty actuarial society and a fellow of the casualty actuarial society. Your coursework must have validation by education experience (VEE), as well as completing online courses and a course on professionalism.
ACAS Exams: Probability, Financial Mathematics, Financial Economics, Modern Actuarial Statistics I, Modern Actuarial Statistics II, Basic Techniques for Ratemaking and Estimating claim Liabilities, Reulation and Financial Reporting.
FCAS Exams: Estimation of Policy Liabilities, Insurance Co. Valuation & ERM, Advanced Ratemaking and Financial Risk and Rate of Return.
Practice Test
All of these requirements can take from six to ten years to complete. Still unsure if you want to or can succeed at becoming an actuary? Try this sample online test from the
website.
