Actuary Job Description, Career as an Actuary, Salary, Employment
Definition and Nature of the Work, Education and Training Requirements, Getting the Job
Education and Training: College
Salary: Median—$76,340 per year
Employment Outlook: Very good
Definition and Nature of the Work
What are the chances that a twenty-one-year-old will live to age sixty-five? How much do people lose every year because of fires, floods, or robbery? Actuaries work with numbers and facts to answer such questions.
By checking facts, working with statistics programs, and constructing probability charts, actuaries are able to tell insurance companies how much to charge a policyholder for a particular type of coverage. The fee, or premium, must be sufficient so that the company will be able to pay the customer in case of loss and still make a profit.
More than 60 percent of all actuaries work for private insurance companies. Many work for life insurance companies. The rest work for property-liability companies and are sometimes called casualty actuaries. Some actuaries work for state or federal government agencies. In the federal government actuaries handle particular insurance programs, such as Social Security or life insurance for veterans and members of the armed services. Actuaries who work for state agencies are concerned with unemployment insurance, workers' compensation, or state retirement or pension plans. State-employed actuaries regulate the rates that are charged by private insurance companies. Actuaries also work for consulting firms and rating bureaus. Rating bureaus are associations that supply actuarial data to member companies. Consulting actuaries set up and evaluate pension and welfare plans for private companies, unions, and government agencies.
Education and Training Requirements
To become an actuary, a person needs a bachelor's degree with a strong background in mathematics and statistics. Courses in insurance law and accounting can also help. Some colleges offer undergraduate and graduate programs in actuarial science. Before becoming a fully qualified actuary, an individual must pass a series of examinations over a period of five to ten years. Students can begin by taking the first two examinations while they are still in college. Then they have a better chance of securing a beginning job as an actuary when they graduate.
Professional organizations give the examinations that a person must take to become an actuary. The number of examinations required varies from one insurance field to another. Generally, the first few examinations test mathematical skills that are learned in college. Because the various actuarial societies recognize each other's examinations, individuals can apply the examinations administered by one to the requirements of another if they decide to switch to another field of actuarial work. However, some of the tests are specific to various branches of the profession.
Getting the Job
Candidates can apply directly to insurance companies and rating bureaus where they think they would like to work. Many entry-level actuary jobs can also be found in actuarial consulting firms. Interested individuals can also find out about jobs by searching Internet job banks, from classified ads in their local newspapers, or by asking a job placement counselor at their college. If candidates are interested in a government job, they should arrange to take the necessary civil service examination.
Advancement Possibilities and Employment Outlook
Actuaries' advancement depends on how well they do their job and how quickly they pass their exams. Early promotion is most likely for those who have passed two examinations while still in college. Actuarial trainees do fairly routine work at first. Once hired, actuaries are encouraged to finish their examinations to attain first an associate level designation and then a fellowship designation. Some fully qualified actuaries who have passed all the exams may rise to top managerial jobs, such as vice president of an insurance company. Others may become associates in consulting firms.
According to the U.S. Bureau of Labor Statistics, eighteen thousand actuaries held jobs in 2004. Employment of actuaries was expected to increase faster than the average for all occupations through the year 2014. The main reason for the favorable outlook is that the insurance industry is projected to grow substantially. In addition, the regulation and spiraling costs of managed health care will provide new work for actuaries. Actuarial consulting firms will also likely be hiring more actuaries as companies increasingly hire consulting firms to analyze their risks.
Actuaries generally work between thirty-five and forty hours per week in pleasant offices. Longer hours are not unusual in this profession. Trainees are closely supervised; however, this supervision decreases quickly as they pass exams. Fully qualified actuaries are highly ranked executives and consultants with a great deal of responsibility. Actuaries working as consultants have to travel to clients' offices. Others are frequently required to travel to meetings and conventions.
Earnings and Benefits
The median annual salary for actuaries was $76,340 in 2004, according to the Bureau of Labor Statistics. Top actuarial executives receive salaries in excess of $107,650 per year. Benefits usually include paid holidays, ample vacations, health insurance, and pension plans.
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