Actuary
An actuary is a professional who utilizes statistics and data analysis to evaluate future risks, such as health issues, accidents, and financial losses. Their primary role includes designing financial systems, particularly in the insurance and pension sectors, to mitigate organizational risks and ensure financial sustainability. Actuaries typically work in office environments, often in insurance companies, investment firms, and government agencies, and their tasks may involve analyzing data, developing risk assessments, and advising on policy decisions. The profession demands a strong foundation in mathematics, statistics, and business principles, along with analytical skills to solve complex problems. Actuaries also engage in communication with stakeholders to explain data-driven insights and their implications for company policies. As technology evolves, actuaries are increasingly integrating advanced software and automation into their work. For those interested in pursuing this career, a bachelor's degree in relevant fields like mathematics, finance, and economics is generally required, along with the completion of professional actuarial exams. Actuaries play a crucial role in shaping financial decisions that affect individuals and organizations alike.
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Subject Terms
Actuary
Snapshot
Career Cluster(s): Finance
Interests: Mathematics, statistics, finance, financial analysis, risk analysis
Earnings (Yearly Median): $113,990 per year $54.80 per hour
Employment & Outlook: 23% (Much faster than average)
Entry-Level Education Bachelor's degree; certification exams
Related Work Experience None
On-the-job-Training Long-term on-the-job training
Overview
Sphere of Work. Actuaries use statistics and data to assess the likelihoods of future risks such as death, sickness, injury, disability, environmental catastrophe, property loss, or investment loss. In some instances, the job of an actuary will include risk assessment and risk reduction through policy or business decisions. Actuaries design risk-based financial systems such as insurance and pension plans with specific premium costs, age and health requirements, and payout schedules in order to minimize an organization’s potential financial losses and maximize organizational sustainability.
Work Environment. The majority of actuaries work in the insurance industry—in areas such as property insurance, life insurance, disability insurance, and health insurance. Other fields requiring actuarial skills include the financial industry, healthcare industry, and government programs such as Social Security and Medicare. Actuaries work as full-time salaried and contract employees in insurance companies, hospitals, investment firms, and social service government agencies. The actuarial profession, being in high demand and involving complex statistical analysis of data, tends to require long hours and great dedication.
Occupation Interest. Individuals drawn to the actuarial profession have an interest in and an affinity for mathematics, analysis, statistics, and business processes. Actuaries are detail-oriented people who have the ability to analyze complex data. They use their findings to make big picture business and policy assessments and recommendations. Actuaries find satisfaction in solving complex problems and making informed predictions about future risk-based events.
A Day in the Life—Duties and Responsibilities. An actuary’s occupational duties and responsibilities focus on gathering and analyzing statistical data to assess the probable risk of events such as accidents, sickness, disability, death, property loss, retirement, and natural or man-made disasters. Actuaries determine probable risk and then use this data to make decisions about insurance premiums, pension plan payouts, and tax rates. Actuaries are responsible for ensuring that an organization can make payments to beneficiaries without risk of present or future financial loss to the organization.
An actuary’s daily tasks may include compiling economic and social data on organizational stakeholders, using a computer for research, data analysis, and communication, and creating databases for statistical data. Actuaries may also assess financial risk of different business decisions and models; draft probability charts for events such as accidents, sickness, disability, death, property loss, retirement, and natural or man-made disasters; and calculate insurance and deductible rates. Actuaries may meet with stakeholders to explain the relationship between statistical data and company policies or with insurance carriers and management to discuss insurance rates.
Ultimately, an actuary’s daily duties and responsibilities are diverse, challenging, and weighty. Actuaries have a central role in making decisions about insurance premiums, insurance payments, employee benefits, and pension amounts that affect daily life.
Work Environment
Immediate Physical Environment. Most actuaries work in office environments. The work of an actuary requires sitting at a desk and using computers for long periods each day. Actuaries who work on a contract basis may be required to travel to client offices to analyze data and attend meetings. Actuaries working in the insurance, financial, and investment industries may work remotely.
Plant Environment. Actuaries working in plant or manufacturing environments might be responsible for assessing in-house risk, such as work-place safety and employee health, or external risk to the company, by measuring the safety of products and the company’s liability to its customers.
Human Environment. An actuary’s work involves interaction with clients, colleagues, supervisors, and employees. Actuaries use interpersonal skills to interact with fellow workers, communicate findings, and propose new ideas.
Technological Environment. Actuaries must have a strong familiarity with spreadsheets, databases, and statistical analysis software. Internet communication skills are required. Computer programming skills are generally not required for actuarial employment but are considered useful. Actuaries are usually required to keep their technology skills up to date as a condition of continued and successful employment. As the work environment incorporates more automation and the use of Artificial intelligence, the future of actuary work should evolve to address these developments.
Education, Training, and Advancement
High School/Secondary. High school students who are interested in pursuing an actuarial career should prepare themselves by developing strong organizational skills, building good study habits, and exhibiting confidence in the study of mathematics, economics, and business. Students should consider applying for actuary-related internships to learn more about an actuary’s daily work, skill sets, and challenges.
Postsecondary. Actuaries generally earn a bachelor’s degree prior to beginning professional actuarial work. College students interested in pursuing an actuarial career should study mathematics, computer science, and business. Particularly important areas of college study and coursework include finance, economics, calculus, algebra, probability and statistics, business, computer science, and technical writing. Due to the human impact of actuarial work, college students interested in actuarial careers will also benefit from studying sociology and political science, as well as keeping abreast of current events. Interested college students should consider pursuing actuarial internships and part-time actuarial-related work, as well as educating themselves about the requirements of the actuarial exams.
Related Occupations
− Auditor
− Management Analyst & Consultant
Bibliography
“Actuaries.” Occupational Outlook Handbook. Bureau of Labor Statistics, US Department of Labor, 6 Sept. 2023, www.bls.gov/ooh/math/actuaries.htm. Accessed 28 Sept. 2023.