How to Become an Actuary
Essential Education, Skills, and Job Interview Prep
Can you conceptualize today’s world economy without businesses? Everything from your toothbrush to your home is sold by businesses, and the abundance creates a variety of jobs. Among those jobs are business risk calculators or actuaries. If you are interested in statistics, business, and risk management, you might want to become an actuary.
In this article, we provide a comprehensive career guide for aspiring actuaries. We include all the essential information including education, skills, and job prep you need to pursue your career as an actuary.
What Is an Actuary?
An actuary is a professional who evaluates a business’s numbers using statistics, finance, and mathematics to predict the financial repercussions of business risks. In simple terms, your job as an actuary is to essentially make accurate financial and uncertainty predictions and help the business grow.
As a qualified actuary, you can work across an array of sectors and enjoy a variety of job opportunities. The roles are mostly analytical, such as business analysis, financial analysis, insurance claim adjustment, and more. Actuaries typically work in the insurance, pensions, investment, banking, and consulting sectors.
Actuary Salary and Job Outlook
Pursuing a career as an actuary comes with a space for tremendous job growth and brings a good compensation rate with it. According to PayScale, the national average salary of an actuary in the United States is $96,542 per year. This may go down to as low as $56,000 or up to as high as $146,000.
Along with a generous compensation package, this field also gives you a promising career. According to the US Bureau of Labor Statistics, the occupation of actuaries is projected to grow by 18 percent between 2019 to 2029. This is much faster than the average growth across occupations, which is three to four percent.
Entry-Level Actuary Job Requirements
To get a job as an entry-level actuary, you need to possess a combination of educational qualifications and pass the industry exam. Most employers hire an actuary with a minimum of a bachelor’s degree in an analytical field. You can get a Bachelor’s Degree in Actuarial Science, Management of Information Systems (MIS), Statistics, or any other relevant field.
To be eligible for the position, you must get a professional actuary certification, which consists of 10 preliminary exams. You need to pass a minimum of two to three of those exams to be considered for an entry-level position.
Along with the above-mentioned requirements, employers generally prefer a candidate with some substantial industry experience. Therefore, it would be wise to apply for internships during and even after getting your bachelor’s degree.
How to Ace Your Actuary Job Interview
To ace your actuary job interview, you must be prepared to answer questions relevant to both the industry and general behavioral aspects. The key to a successful interview lies in knowing what the company is looking for and highlighting how your skills fit those requirements.
Therefore, we recommend reading up on the company, the position requirements, and practicing your elevator speech. Researching and practicing the common actuary interview questions listed below will also give you a headstart.
Common Actuary Job Interview Questions
- Why did you want to become an actuary, and which qualities make you a good actuary?
- In detail please explain the primary roles of an actuarial analyst in several sectors including the insurance, pension, and consulting sectors.
- What is an actuarial report? Can you give some examples of your experience creating these reports?
- State some of the popular software used in the actuarial industry and the ones you are most familiar with.
- What are some of the must-have skills for an actuary?
What Degree Should I Get to Become an Actuary?
Today, the industry standard for an associate actuary position is a bachelor’s degree related to the field. This is unlike many other analytical fields where you can secure an entry-level position with an online associate degree or even a coding boot camp certification.
Below are the degree programs you can enroll in to become an actuary.
Bachelor’s Degree in Actuary
A bachelor’s degree in a quantitative or an analytical field is favored to qualify for an entry-level position as an actuary. Although a bachelor’s degree isn’t a strict requirement, it is preferred by recruiting companies. It will take you around four years to complete this degree.
You don’t necessarily have to major in actuarial science. You can enroll in an online computer science degree or major in statistics, math, finance, economics, for example.
Depending on your bachelor’s degree, you should take additional courses that cover the topics that are left out. For instance, if you major in computer science, enroll in courses that teach business, finance, statistics, and economics. A liberal arts degree that does not cover the essential components of the actuarial field isn’t recommended for this career.
Master’s Degree in Actuarial Science
Actuaries do not need a master’s degree to qualify for the field. That said, if you are looking to prepare in-depth for the actuarial exams, a master’s degree in a relevant field will help you.
You can get a Master’s of Science in Actuarial Science where besides the field’s theoretical specialization, you will also acquire professional skills.
A master’s degree can take you anywhere between one to two years after completing four years of a bachelor’s degree. Just like a bachelor’s degree, a master’s degree also makes you eligible for actuarial jobs like becoming a consultant, business analyst, and statistical analyst.
Actuarial Science Doctoral Degree
You should get a Doctoral Degree in Actuarial Science if you are interested in teaching the subject or pursuing a career in research. A Ph.D. in the field is a highly uncommon educational pathway, as you are job-eligible with a bachelor’s degree and industry exam certifications.
If you choose to pursue a doctoral degree it can take you anywhere between three to four years. The Ph.D. program covers an array of actuarial research topics including health and social care, risk management, analytics, and more. You can choose to specialize in a specific industry depending on your career goals.
What Does an Actuary Do?
The primary job duty of an actuary is to perform statistical analysis and inform the business about the potential financial risk consequences of any business decision. Besides this main responsibility, your job duties as an actuary differ depending on the industry and position you are working in.
Below are some of the job duties of an actuary.
Creates Strategic Plans to Lessen Risks and Uncertainties
As an actuary, your job isn’t limited to pointing out the potential risks but also creating strategies to tackle those risks. So, you work with different professionals like accountants and underwriters to come up with a suitable solution to help mitigate the risks.
For example, an actuary working in the insurance industry will work out a revenue plan and propose price changes that will stop the company from going bankrupt. Moreover, actuaries are often responsible for creating strategies with success in mind for both the company and policyholders.
Data Visualization and Probability Analysis
The job duties of actuaries and data scientists are often similar as they both predict possible future events by evaluating data. Actuaries conduct statistical and probability calculations as well as create data visualization to develop strategies for future predictions. Actuaries also use data tools such as SQL to perform their analysis.
Recommends and Manages Financial Investments
Depending on the position, actuaries also delve into financial investment recommendation and management. You can specialize in investment actuary and consult your clients on their business investment plans for the next five to 10 years. Actuaries also deal with investment management, including investment purchase and analysis.
Essential Actuary Skills
To become an accomplished actuary, you must possess certain industry skills. Along with the technical skills, you need soft skills such as communication skills and critical thinking skills to be successful.
Below are the most essential actuary industry skills.
SQL, VBA, and Microsoft Excel Skills
As an actuary, a huge proportion of your work revolves around data analysis. Thus, learning SQL, R, SAS, and other industry-relevant programming languages is crucial to the field. In addition to these programming skills, you must also be proficient in Microsoft Excel and VBA.
Actuarial science is a business and mathematics-based profession. So, without excellent mathematical skills, it will be impossible to succeed in this field. Along with basic arithmetic skills, you must also be proficient in probability, statistics, and calculus.
Most actuaries work within businesses as analysts, consultants, or even underwriters. To do your job well, you must have an in-depth business understanding. Therefore, being skilled in finance, accounting, economics, and overall business management is very important to the profession.
Actuaries also need to master the world of analytics to succeed in their careers. Your job requires analytical skills such as data interpretation, research, evaluation, problem-solving, and pattern detection.
How to Become an Actuary:
A Step-by-Step Guide
To penetrate the world of the actuary, gaining a bachelor’s degree in a relevant field is the primary step. Below are the other essential steps to becoming an actuary.
Earn a Bachelor’s Degree
The first step to becoming an actuary is to complete your bachelor’s degree. You can get this undergraduate degree in an array of subjects. They include actuarial science, computer science, economics, statistics, and more.
Just make sure to take additional courses that cover the actuarial subjects that your major doesn’t. You can also get a Master’s Degree or Doctoral Degree in Actuarial Science to prepare better for the exams and pursue a research career.
Take and Pass the First Two Actuarial Exams
To qualify for a job as an actuary, you must pass the industry examinations. There are 10 professional actuary certification exams you need to take to move up the ladder. However, you only need to pass the first two exams to qualify for an entry-level position.
The exams are administered by either the Casualty Actuarial Society (CAS) or the Society of Actuaries (SOA). The first two exams test you on probability and financial mathematics. The exams focus on statistics, investments, finance, and actuarial maths. The difficulty level increases as you move up.
Secure an Actuarial Internship
Most employers in this field prefer candidates with industry-relevant experience. So, while you are in college, apply for actuarial internships. The internships include data analysis, risk management, underwriters, and more. If you don’t get an internship before graduation, you can still apply for one after graduation while you sit for the actuarial exams.
Apply for an Entry-Level Actuarial Job
Now that you have the educational qualification, industry experience, and have completed two actuarial exams, you are ready for a qualified actuarial job. You can apply via your university’s career fair. You can also visit popular job sites like Indeed, Glassdoor, and LinkedIn.
Pass the Rest of the Actuarial Exams
While working at your entry-level job, continue preparing for the remaining actuarial exams. Passing all the exams will tremendously help advance your actuarial career trajectory.
How Long Does It Take to Become an Actuary?
To qualify for an entry-level actuary position, it will take you around four to six years. This figure includes four years for a bachelor’s degree and an additional two years to prepare and clear the first two actuarial exams.
However, know that this duration depends on how long you need to prepare for the exams. To complete all 10 actuarial exams and progress in your career, it can take you anywhere between seven to 10 years.
Should You Become an Actuary in 2021?
If you are mathematically talented, analytically minded, and have an aptitude for problem-solving, then yes, you should become an actuary in 2021. Sure, the entire process to become qualified is quite lengthy, but the high salary rate and positive job outlook make it worth it.
In addition, the field of actuarial science provides immense job opportunities. You can specialize in risk management, underwriting, business analysis, and more, all spread across a spectrum of industries.
How do you become a qualified actuary?
To become a qualified actuary you must first complete a bachelor’s degree in an industry-relevant field, and then pass a minimum of the first two actuarial professional exams.
Do you need to be proficient in mathematics to become an actuary?
Yes. To become an actuary, you need to be excellent in both general and in-depth mathematics such as statistics, calculus, and probability.
Do actuaries need to have a good business understanding?
Actuaries deal with several business subjects including finance, economics, accounting, profit and loss, and business management. So, yes, actuaries need to have a good business understanding.
What can you major in to become an actuary?
As the field of the actuary is an amalgamation of business, computer science, statistics, and mathematics, you can major in a field relevant to these fields. You can get a degree in actuarial science, business administration, statistics, computer science, or mathematics.