Actuaries are risk-management experts who play a leadership role in financially-oriented businesses like Insurance, Banking, rating agencies, and Accounting firms. They apply several mathematical principles and their business knowledge to understand how the financial market works and behaves, what affects it, and to devise ways to predict its changes and repercussions.
Actuaries use specialized software in order to collect, sort, process, and analyze data. They must then make accurate recommendations based on their observations and present them to the executives who hired them. Their insight must be well documented, as it will influence a company’s financial decisions and budget management, as well as their possible losses and revenues.
Actuaries may be hired in several different settings and, even though the insurance industry is the most common area for these professionals to work in, they can also be hired by any institution in need of financial planning and analysis. Some of these professionals, however, choose to work independently by offering consultation services to small businesses, individual clients, and companies that may not have their own Actuaries.
Here’s a non-exhaustive list of common tasks Actuaries are required to complete.
- Using mathematical and economic principles and methods to foresee future expenses and prepare for them.
- Analyzing the financial costs of risk and uncertainty to develop and implement financial strategies aimed towards reducing risks and loss while increasing profit.
- Drafting and designing insurance policies, as well as estimating their costs, taking into account statistical studies and demographic factors:
- Maintaining a profit margin while offering competitive advantages and pricing to policyholders.
- Assisting employers in designing realistic healthcare and pension plans, along with any other employee benefit plans.
- Providing financial and economic advice to decision-makers by submitting reports and presenting their findings and recommendations.
- Monitoring the company’s profitability and working with management to set annual targets.
- Advising legislative bodies and other authorities on how laws that are yet to be adopted may affect businesses and global economy.
- Liaising with colleagues and other financial experts to gain a better understanding of the issues at hand:
- Assisting Market Research Analysts in performing field studies to evaluate the profitability of new products.
- Staying updated about the latest updates in the financial world.
- Collecting data for statistical analysis.
- Documenting observations and drafting recommendations.
- Creating and using mathematical and statistical models.
- Developing and implementing financial strategies that reduce losses and risks while also increasing profits.
- Designing insurance policies and employee benefit plans.
- Submitting and explaining research findings to employers in the forms of presentations or written reports.
The average Actuary salary in USA is $68,789 per year or $35 per hour. This is around 2.4 times more than the Median wage of the country. Entry level positions start at $48,000 while most experienced workers make up to $96,000. These results are based on 25 salaries extracted from job descriptions.
- Excellent interpersonal and communication skills:
- Communicating clearly, both in writing and verbally, in order to give presentations and advise clients on risks and profitability, simplifying technical jargon and concepts as required;
- being able to write and present financial reports based on the collected data;
- being effective team players, taking suggestions and recommendations from colleagues; and
- establishing and maintaining supportive working relationships.
- Outstanding organizational and time management skills:
- Prioritizing and planning work activities in order to manage time efficiently while handling a high volume of work;
- demonstrating an aspiration for continuous learning and professional development; and
- multitasking; being able to work in a dynamic, fast-paced environment.
- Analytical, problem-solving, and decision-making skills:
- Effectively researching and analyzing numerical data, using a variety of software programs, including spreadsheets, statistical analysis, and database management programs, and providing reasonable recommendations;
- being able to review data, observe patterns, and draw logical conclusions;
- designing plans to avoid and reduce risks; and
- being able to exercise strategical thinking and mature judgment.
- Strong attention to detail and critical-thinking skills:
- Analyzing data efficiently and accurately in order to provide more precise forecasts; and
- being able to use logic and reasoning to solve complex problems.
- Computer skills and mathematical knowledge:
- Displaying high proficiency using computerized tools as well as specialized software for financial purposes; and
- employing mathematical principles to calculate risks.
- Being self-motivated, creative, and able to make others feel confident regarding any future risks.
In order to work as an Actuary, one must obtain a bachelor’s degree in Mathematics, Actuarial Science, Statistics, or any other field that yields the necessary analytical skills and knowledge. Internships allow applicants to get on-the-job training, which will benefit their future professional opportunities.
After attending college, applicants need to pass a series of examinations and meet the Validation by Educational Experience requirements to receive an associate certification and be recognized as Actuaries. Applicants can start this process either at The Casualty Actuarial Society (CAS) or The Society of Actuaries (SOA). However, each of them has its own certification process. The CAS demands applicants to pass seven exams, while the SOA offers only five exams. Either way, interested applicants need to spend hundreds of hours and take many courses and classes to prepare themselves for these evaluations. After getting their association certification and working for several years, Actuaries can start a new process to get a Fellowship Certification, issued by both the SOA and the CAS.
It is not necessary to be certified to work as an Actuary. Therefore, while getting a certification, these professionals are allowed to offer their services. However, employers prefer Actuaries that have at least 5 years of experience in the field.
Promotion opportunities are available and often given to Actuaries that display high levels of commitment, reliability, and professionalism. Some of the positions they can aspire to include Insurance or Financial Consultant.
Most Actuaries work during the standard office hours. They sometimes may be required to travel in order to meet and work with long distance customers and clients.