Perhaps almost everyone has heard of actuaries, but does anyone know what they really do? Some questions you should maybe be asking yourself are: how much do actuaries make? Or what does it take to become an actuary? These professionals have a huge hand in developing insurance policies and managing risk. They have a great impact on our daily lives. You might be surprised by the extensive range of an actuary salary.
What is the salary of an actuary? A huge factor in differences of actuary salaries is experience. The top 10% of professionals are making at least $176,000 up to as much as $250,000 per year whereas the lowest 10%, which includes all entry level positions, are making less than $57,000 per year. Despite this disparity, average salaried pay is roughly $95,000 a year, making average hourly wages about $45 per hour.
Actuaries serve a need in many different areas. There are two main distinctions between them which coordinate with two organizations that support actuaries and provide resources and material for exams. These organizations are: Society of Actuaries (SOA) or Casualty Actuarial Society (CAS). Membership is not required but highly recommended.
Actuary Job Description
Fundamentally, actuaries are most closely involved with insurance companies. They evaluate chance happenings by using mathematics and come up with quotes and programs that insurance companies use daily. Skills of actuaries are not just used for insurance; they are also used by banks or even government organizations. They can determine risk involved with anything.
Actuaries also develop programs to help manage this risk. Many companies require a risk management department and will employ an actuary. Because many actuaries work with people who may not understand numbers the way they do, they must be able to adequately explain their findings and why they are relevant. Actuaries definitely need a background in communication or business.
They also need to have a proficient understanding of computers to be able to create the charts and graphs necessary for their work. Organization is crucial when compiling data that could have a direct impact on everyday lives of people using insurance companies and other businesses.
All in all, actuaries need to be flexible. They must be able to adjust their predictions according to changes in national or even global data. They need to be aware of economic, business, political, and other issues in order to make informed predictions. It is a multifaceted career that requires dedication and an interest in the world.
The typical work environment for an actuary is an office setting. They generally work full time and in a 2012 survey, only 3 out of 10 were working more than 40 hours a week. These actuaries work for companies that can afford to employ their own in house. Some companies employ actuaries as consultants. These professionals may have to travel long distances for work.
Often a larger company can employ many actuaries and they are placed on teams with managers and other business professionals to help decide what programs will work best for the company. Having a well-rounded understanding of the business work can help actuaries work with these other professionals.
How to Become an Actuary
For consideration as an actuary, candidates must pass at least two exams. A degree in actuarial science is not required. Many candidates spent undergraduate years studying finance, macro- and microeconomics, mathematics, computer science, and even business or communication. A well-rounded education is essential to develop the skills necessary to be an actuary.
Courses that apply directly to the actuary profession include economics, corporate finance, and applied statistics. These are considered “Validation of Educational Experience” courses and are required as a part of programs that enable individuals to become actuaries.
It can take from 6 to 10 years to pass all the actuarial exams but candidates can begin practicing as soon as they pass the first two exams. They are usually taken on in the roles of assistants or trainees and get real world experience while studying to reach the next level. By this time, candidates have chosen which actuarial path they wish to take and join an organization accordingly.
The SOA and CAS both have their own requirements and sponsor programs to help candidates study for qualifying exams. They are both structured by three levels: associate (4-6 years of study), fellow (2-3 years of study), and CERA certified. Each level is accompanied by required exams for certification. CERA or Chartered Enterprise Risk Analyst is the highest honor the organizations can bestow.
Percentage-wise, the actuary field is one of the largest growing professional careers. By the year 2022, job opportunities will increase by 26% which is way more than the average. Within the next decade, it is anticipated that about 6,300 new job openings will be created. This number may seem small, but it is a relatively small niche so jobs will still be competitive.
Several things factor into these predictions. New laws in healthcare have required a greater reevaluation of the risks involved. These new laws have changed the way insurance works and new types of health insurance have sprung up. Other factors are population growth or things like weather and natural disasters which all have an impact on insurance premiums. More and more actuaries are being needed to fill these needs.
Insurance carriers will still remain highest in demand of actuaries at a 69% employment rate whereas the next highest at 17% of all actuaries will work in other professional, scientific or technical fields. Other industries are more likely to use actuaries on a consulting basis.
Accountants or auditors work with risk to a much lesser and more calculated degree. They ensure that financial records are accurate and that taxes are being paid on time. They are employed to make sure that organizations run smoothly. A bachelor’s degree is required for this profession and the average salary as of 2012 is about $63,000 a year.
Budget analysts work for both public and private institutions. They keep company finances organized and together. They put together budget reports which helps them determine how they should monitor the spending of the institution. They may also work for private individuals but it is much less common. A bachelor’s degree is also required for consideration in this career. The average salary as of 2012 is $70,000.