What Is the Best Degree Path to Becoming an Actuary?

Best Degree Path to Becoming an Actuary

Do you need a degree for actuary jobs? Majoring in mathematical sciences or computer science is a good plan for students entering college, but part of achieving success requires knowing what you want to do with your degree. There are plenty of high-paying careers for students who decide to major in computer science or mathematics. However, if you are good at mathematics and computers and you enjoy analyzing information and solving problems, you may consider pursuing a degree in actuarial science.

An actuary is the highest-paying job for computer science and mathematics majors, with experienced professionals earning a median annual salary over six figures. If analyzing the financial aspects of risk sounds like an appealing career choice, your job preparation could include earning a bachelor’s degree and taking examinations for professional certification.

An Actuary’s Education

The first step to becoming an actuary is earning a four-year degree from a college or university. Most aspiring actuaries pursue a bachelor’s degree program in a subject such as actuarial science, statistics, or mathematical science, all degrees that can be completed at online colleges. In addition to mathematics and analytical subjects, students should expect to take courses in economics, calculus, business management, accounting, computer science, and corporate finance. During their college years, many students take advantage of internship opportunities and network with potential employers to gain educational experience.

Achieving Certification as an Actuary

Even for entry-level jobs as actuaries, candidates must usually have passed at least one examination in the program to achieve professional certification, according to the United States Bureau of Labor Statistics (BLS). Depending on their intended industry, aspiring actuaries can begin the process of becoming fully certified professionals through either the Casualty Actuarial Society (CAS) or the Society of Actuaries (SOA). These professional organizations offer certification at both the associate and the fellowship level. Passing these actuary exams and becoming an associate certified actuary typically takes between four and six years and requires taking five to seven actuary examinations. Progress to fellowship level certification can require another two to three years of work. Employers may pay the cost of some of these professional certification exams or even pay new actuaries to study.

actuary degree

Entry-Level Actuary Work

Actuary jobs can vary, but usually trainees, or entry-level workers, learn under the supervision of experienced actuaries. Their work ranges from gathering data to doing research and drafting reports, depending on their level of experience. Some employers have newly-hired actuary trainees become familiar with all aspects of the company by rotating them through different departments.

Career Advancement in Actuary Work

Career advancement depends largely on job performance and the number of actuarial exams passed. Actuaries with broad knowledge of risk management, for example, can rise to management and executive positions within their companies. These roles might include a chief risk officer or chief financial officer (CFO).

Actuaries with fellowship status often advance quickly, as they are qualified to supervise the work of other actuaries and act as a liaison with senior management. However, the most common way to advance as an actuary is through certification.

Important Qualities for Actuary Work

In addition to education and training, successful actuaries have certain characteristics, qualities, and skills that allow them to handle the analytical and mathematical nature of their job. Below are several qualities needed for actuary work.

Analytical skills: Being an analytical person is a must in actuary work. Actuaries utilize analytical skills to identify patterns and trends within complex data sets. They analyze certain factors that can impact target events.

Communication skills: Effective communication is key to operating as a team member of any organization. Actuaries with strong communication skills are better equipped to explain complex technical matters to individuals without an actuarial background. The job also entails written communication, used to describe work and recommendations, so strong writing skills are helpful.

Computer and computer software skills: On a daily basis, actuaries work with computers. Therefore, having skills in certain programming languages and knowing how to use and develop spreadsheets and statistical analysis tools are beneficial in the job of an actuary.

Interpersonal skills: Interpersonal skills matter in all jobs, but an actuary must be able to listen to opinions and reach solutions to problems effectively. Having good interpersonal skills helps actuaries serve as either team leaders or as productive team members.

Mathematical skills: Actuaries work with data, numbers, and statistics. Having strong mathematical skills helps actuaries quantify risks through the use of calculus, probability, and statistics. Most actuary roles require a strong math skillset. Also, passing actuary exams and completing the actuary major relies heavily on solid mathematical skills.

Problem-solving skills: The primary job as an actuary is to identify risks. In order to do so, actuaries must be problem-solvers. This will help them develop ways to identify and manage risks for businesses and corporations.

Team-orientation: Being team-oriented is an essential skill for actuaries, whether they are a member of a team or a team leader. Being able to listen, take direction and instruction, and work effectively in a group are essential in the role of an actuary.

Technical skills: Along with mathematical skills, technical skills are important when working as an actuary. Actuaries work with computers, software, and technology that helps them synthesize data and interpret risks.

Job Outlook for Actuaries

A job as an actuary can be a rewarding one. In addition to earning a high salary, once enough experience is gained, actuaries enjoy a highly favorable job outlook. The BLS expects job opportunities for actuaries to increase by 18 percent over a decade, as opposed to four percent, which is expected across all other occupations.

So, what industries are the most promising for actuaries? According to BLS, actuary jobs will be on the rise in nearly all industries, but with particular favorability in insurance. Breaking this industry down even further shows that health insurance companies requires the most actuaries.

BLS reports that more actuaries will be needed to develop, evaluate, and price various insurance products as they are released in upcoming years. They will also be needed to calculate and determine the costs of new risks. In companies that manage their own risk, a practice known as enterprise risk management, even more actuaries will be needed.

Insurance companies will need the most actuaries of all industries. Within the insurance industry, new hires will be necessary to keep up with the large amount of information that will need to be analyzed. Work will be needed in the examination of medical or property data that is collected from consumers or patients. With an increase in data available to insurance companies, actuaries will be used to make more accurate projections of future costs and risks. Insurance companies will use the data collected by actuaries to develop better products, predict behavior, and set competitive prices.

Health insurance companies will need actuaries to help evaluate the constant changes in guidelines and regulations. Actuaries will be needed in this industry to help the insurance companies expand into new markets and create new products for their customers.

If you find analyzing information and working with both numbers and computers interesting, then working in the actuary field could be the right career choice for you.

Best Degree Path to Becoming an Actuary

Job Prospects for Actuaries

With a favorable job outlook and solid earnings potential, job opportunities should be competitive for entry-level applicants. According to the BLS, the number of students sitting for actuarial exams has increased over the last few years. This means more students are becoming qualified for entry-level actuarial work. However, students who have passed a minimum of two actuarial exams, held an internship while attending college, and present strong business acumen with analytical, communication, and technical skills should see the best job prospects for entry-level positions.

Potential Earnings for Actuaries

According to the most recent publication of the BLS Occupational Outlook Handbook, the median annual wage for actuaries was $108,350. Actuaries earn the highest salaries in certain states. For example, New York has the highest reported salary for actuaries, with an average annual wage of $145,180. Actuaries working in Washington, D.C. and Connecticut earn mean salaries within the $127,000 range.

The lowest 10 percent of actuaries, as reported by BLS, earned less than $65,000 annually, while the highest 10 percent earned more than $193,000. Most actuaries work full-time, often more than 40 hours per week.

With regards to earnings, top-paying industries include:

Professional, scientific, and technical services: $110,960
Finance and insurance: $110,020
Government: $101,740
Management of companies and enterprises: $98,880

Specializations as an Actuary

Specializations, whether earned alongside a major or outside of college, allow students to explore different types of practice areas. For actuaries, the most common specializations include casualty, health, life, and pension. Bachelor’s degree programs may offer specializations in one of these areas, allowing students to tailor their degree toward an area of interest.

If pursuing a specialization outside of school, this usually occurs while completing an internship. Internships provide opportunities for students to receive hands-on training and explore various areas of actuary science. In fact, internships often can help students decide which actuarial track they wish to pursue.

Best Degree Path to Becoming an Actuary

The Work Environment of an Actuary

Within the last two years, actuaries held approximately 27,700 jobs. The Bureau of Labor Statistics reports that the largest percentage of actuary jobs in finance and insurance. In fact, 71 percent of all actuary jobs were in finance and insurance industries. 13 percent of actuaries worked in professional, scientific, and technical services, and six percent worked in the management of companies and enterprises. In addition to these top three industries, four percent of actuaries were self-employed and three percent worked in government jobs.

Actuaries typically work in office settings. They function as teams made up of managers and other professionals in the field. They often work closely with other actuaries, as well as accountants, finance professionals, and underwriters. Actuaries working as consultants or working for consulting firms may meet regularly with clients. These actuaries often travel and work outside of the office.

The standard work schedule for an actuary is 40 hours per week.

Training for Actuaries

Entry-level actuaries start as trainees. The typical entry-level position requires beginner actuaries to team up with more experienced actuaries, who serve as their mentors. Beginning actuaries have typically passed one to two exams before joining a team of more experienced actuaries.

When an entry-level actuary joins a team, they perform basic tasks, such as gathering and compiling data. As the actuary gains more experience, their tasks expand to include conducting research and writing reports. It is not uncommon for beginner actuaries to spend time working in several different departments, such as marketing, product development, and underwriting. By spending time in other areas of an organization, actuaries can learn all aspects of the company’s work.

Beginner actuaries work while the certification process continues. Employers often support the certification process, allowing beginner actuaries to hold entry-level positions while they work towards a higher level of certification. Support may also include paying for the costs of exams and study aids or materials. It is not uncommon for firms to offer beginner actuaries paid time to study and prepare for their exam. Employers often set up study groups and encourage employees to join. Also, employees sometimes receive bonuses and/or raises each time an exam is passed.

Final Thoughts on the Best Degree Path to Becoming an Actuary

Actuaries need a bachelor’s degree in actuarial science, mathematics, statistics, or a closely related discipline. The degree is essential for entry-level and advanced roles. Preparing yourself with additional coursework in economics, finance, and statistics also helps. If you are statistical in nature and enjoy synthesizing numbers and data, this career offers a favorable job outlook and high earnings potential. A career as an actuary can be extremely rewarding for the right person.

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BDP Staff:
April 2021

This concludes our article on the best degree path to becoming an actuary.

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