# Actuaries

## Summary

Actuaries use advanced statistics and modeling software to forecast the cost and probability of an event.
Quick Facts: Actuaries
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Typical Entry-Level Education \$qf_education_html
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On-the-job Training \$qf_training_html
Number of Jobs, 2020 \$qf_number_jobs_html
Job Outlook, 2020-30 \$qf_outlook_html
Employment Change, 2020-30 \$qf_openings_html

#### What Actuaries Do

Actuaries use mathematics, statistics, and financial theory to analyze the financial costs of risk and uncertainty.

#### Work Environment

Most actuaries work for insurance companies. Although most work full time in an office setting, some actuaries who work as consultants may travel to meet with clients.

#### How to Become an Actuary

Actuaries need a bachelor’s degree and must pass a series of exams to become certified professionals. They must have a strong background in mathematics, statistics, and business.

#### Job Outlook

Overall employment of actuaries is projected to grow \$pc.toString().replaceAll("^\-","") percent from 2020 to 2030, \$gra.

About \$tools.number.format('#,###',\$op) openings for actuaries are projected each year, on average, over the decade. Many of those openings are expected to result from the need to replace workers who transfer to different occupations or exit the labor force, such as to retire.

#### State & Area Data

Explore resources for employment and wages by state and area for actuaries.

#### Similar Occupations

Compare the job duties, education, job growth, and pay of actuaries with similar occupations.

## What Actuaries Do

Actuaries produce charts, tables, and reports to explain their calculations.

Actuaries analyze the financial costs of risk and uncertainty. They use mathematics, statistics, and financial theory to assess the risk of potential events, and they help businesses and clients develop policies that minimize the cost of that risk. Actuaries’ work is essential to the insurance industry.

### Duties

Actuaries typically do the following:

• Compile statistical data and other information for further analysis
• Estimate the probability and likely economic cost of an event such as death, sickness, an accident, or a natural disaster
• Design, test, and administer insurance policies, investments, pension plans, and other business strategies to minimize risk and maximize profitability
• Produce charts, tables, and reports that explain calculations and proposals
• Explain their findings and proposals to company executives, government officials, shareholders, and clients

Most actuarial work is done with computers. Actuaries use database software to compile information. They use advanced statistics and modeling software to forecast the probability of an event occurring, the potential costs of the event if it does occur, and whether the insurance company has enough money to pay future claims.

Actuaries typically work on teams that often include managers and professionals in other fields, such as accounting, underwriting, and finance. For example, some actuaries work with accountants and financial analysts to set the price for security offerings or with market research analysts to forecast demand for new products.

Most actuaries work at insurance companies, where they help design policies and determine the premiums that should be charged for each policy. They must ensure that the premiums are profitable yet competitive with other insurance companies.

Actuaries in the insurance industry typically specialize in a specific field of insurance, such as one of the following:

Health insurance actuaries help develop long-term care and health insurance policies by predicting expected costs of providing care under the terms of an insurance contract. Their predictions are based on numerous factors, including family history, geographic location, and occupation.

Life insurance actuaries help develop annuity and life insurance policies for individuals and groups by estimating, on the basis of risk factors such as age, gender, and tobacco use, how long someone is expected to live.

Property and casualty insurance actuaries help develop insurance policies that insure policyholders against property loss and liability resulting from accidents, natural disasters, fires, and other events. They calculate the expected number of claims resulting from automobile accidents, which varies with the insured person’s age, sex, driving history, type of car, and other factors.

Some actuaries apply their expertise to financial matters outside of the insurance industry. For example, they develop investment strategies that manage risks and maximize returns for companies or individuals.

Pension and retirement benefits actuaries design, test, and evaluate company pension plans to determine if the expected funds available in the future will be enough to ensure payment of future benefits. They must report the results of their evaluations to the federal government. Pension actuaries also help businesses develop other types of retirement plans, such as 401(k)s and healthcare plans for retirees. In addition, they provide retirement planning advice to individuals.

Enterprise risk actuaries identify any risks, including economic, financial, and geopolitical risks that may affect a company’s short-term or long-term objectives. They help top executives determine how much risk the business is willing to take, and they develop strategies to respond to these issues.

Actuaries also work in the public sector. In the federal government, actuaries may evaluate proposed changes to Social Security or Medicare or conduct economic and demographic studies to project future benefit obligations. At the state level, actuaries may examine and regulate the rates charged by insurance companies.

Some actuaries are considered consultants and provide advice to clients on a contract basis. Many consulting actuaries audit the work of internal actuaries at insurance companies or handle actuarial duties for insurance companies that are not large enough to keep their own actuaries on staff.

## Work Environment

Actuaries typically work on teams that often include managers and professionals in other fields, such as accounting, underwriting, and finance.

Actuaries typically work on teams that often include managers and professionals in other fields, such as accounting, underwriting, and finance.

Although actuaries usually work in an office setting, those who work for consulting firms may need to travel to meet with clients.

### Work Schedules

Most actuaries work full time and some work more than 40 hours per week.

## How to Become an Actuary

Actuaries need a bachelorâ€™s degree and must pass a series of exams to become certified professionals.

Actuaries need a bachelor’s degree, typically in mathematics, actuarial science, statistics, or some other analytical field. Students must complete coursework in economics, applied statistics, and corporate finance, and must pass a series of exams to become certified professionals.

### Education

Actuaries must have a strong background in mathematics, statistics, and business. Typically, an actuary has an undergraduate degree in mathematics, actuarial science, statistics, or some other analytical field.

To become certified professionals, students must complete coursework in economics, statistics, and corporate finance.

Students also should take classes outside of mathematics and business to prepare them for a career as an actuary. Coursework in computer science, especially programming languages, and the ability to use and develop spreadsheets, databases, and statistical analysis tools, are valuable. Classes in writing and public speaking will improve students’ ability to communicate in the business world.

Two professional societies—the Casualty Actuarial Society (CAS) and the Society of Actuaries (SOA)—sponsor programs leading to full professional status. The CAS and SOA offer two levels of certification: associate and fellow.

The CAS certifies actuaries who work in the property and casualty field, which includes automobile, homeowners, medical malpractice, and workers’ compensation insurance.

The SOA certifies actuaries who work in life insurance, health insurance, retirement benefits, investments, and finance.

Both professional societies require applicants to complete certain educational coursework in economics, finance, and mathematical statistics while in college. Applicants also must pass seven exams for associate-level certification.

Many employers expect students to have passed at least one or two of the initial actuary exams needed for professional certification before graduation.

In addition, both CAS and SOA require that candidates take seminars on professionalism. Both societies have mandatory e-learning courses for candidates.

It typically takes 4 to 7 years for an actuary to earn the associate-level certification, because each exam requires hundreds of hours of study and months of preparation.

After becoming associates, actuaries typically take 2 to 3 more years to earn fellowship status.

The SOA offers fellowship certification in five separate tracks: life and annuities, group and health benefits, retirement benefits, investments, and finance/enterprise risk management. Unlike the SOA, the CAS does not offer specialized study tracks for fellowship certification.

Both the CAS and the SOA have a continuing education requirement. Most actuaries meet this requirement by attending training seminars that are sponsored by their employers or the societies.

Pension actuaries typically must be licensed by the U.S. Department of Labor and U.S. Department of the Treasury’s Joint Board for the Enrollment of Actuaries. Applicants must meet certain experience requirements and pass two exams administered through the SOA to qualify for enrollment.

### Other Experience

Because there are different types of practice areas, including health, life, pension, and casualty, internships may be helpful for students deciding on which actuarial track to pursue.

### Training

Most entry-level actuaries start out as trainees. They are typically on teams with more experienced actuaries who serve as mentors. At first, they perform basic tasks, such as compiling data, but as they gain more experience, they may conduct research and write reports. Beginning actuaries may spend time working in other departments, such as marketing, underwriting, and product development, to learn all aspects of the company’s work and how actuarial work applies to each one.

Most employers support their actuaries throughout the certification process. For example, employers typically pay the cost of exams and study materials. Many firms provide paid time to study and encourage their employees to set up study groups. Employees usually receive raises or bonuses for each exam that they pass.

Advancement depends largely on job performance and the number of actuarial exams passed. For example, actuaries who achieve fellowship status often supervise the work of other actuaries and provide advice to senior management. Actuaries with a broad knowledge of risk management and how it applies to business can rise to executive positions in their companies, such as chief risk officer or chief financial officer.

### Important Qualities

Analytical skills. Actuaries use analytical skills to identify patterns and trends in complex sets of data to determine the factors that have an effect on certain types of events.

Communication skills. Actuaries must be able to explain complex technical matters to those without an actuarial background. They must also communicate clearly through the reports and memos that describe their work and recommendations.

Computer skills. Actuaries must know programming languages and be able to use and develop spreadsheets, databases, and statistical analysis tools.

Interpersonal skills. Actuaries serve as leaders and members of teams, so they must be able to listen to other people’s opinions and suggestions before reaching a conclusion.

Math skills. Actuaries quantify risk by using the principles of calculus, statistics, and probability.

Problem-solving skills. Actuaries identify risks and develop ways for businesses to manage those risks.

## Pay

### Actuaries

Median annual wages, May 2020

Actuaries

\$111,030

Mathematical science occupations

\$93,170

Total, all occupations

\$41,950

Most actuaries work full time and some work more than 40 hours per week.

## Job Outlook

### Actuaries

Percent change in employment, projected 2020-30

Mathematical science occupations

28%

Actuaries

24%

Total, all occupations

8%

Overall employment of actuaries is projected to grow \$pc.toString().replaceAll("^\-","") percent from 2020 to 2030, \$gra.

About \$tools.number.format('#,###',\$op) openings for actuaries are projected each year, on average, over the decade. Many of those openings are expected to result from the need to replace workers who transfer to different occupations or exit the labor force, such as to retire.

### Employment

Employment of actuaries is projected to grow 20 percent from 2018 to 2028, much faster than the average for all occupations. However, because it is a small occupation, the fast growth will result in only about 5,000 new jobs over the 10-year period.

Actuaries will be needed to develop, price, and evaluate a variety of insurance products and calculate the costs of new risks.

More actuaries will also be needed to help companies manage their own risk, a practice known as enterprise risk management. Actuaries will help companies avoid, manage, and respond to any potential financial risks across all areas of their business operations. This analysis helps companies adjust their business or investment strategies to achieve economic returns and respond to new financial regulations and requirements.

Insurance companies will need actuaries to analyze the large amount of information, such as medical or property data, collected from consumers. The increase in available data will allow insurance companies to better develop new products, set competitive prices, predict consumer behavior, and make more accurate projections of future risks and costs.

In addition, health insurance companies will require more actuaries to help evaluate the effects of changing healthcare regulations and guidelines, expand into new insurance markets, and offer products to new customers.

### Job Prospects

Job opportunities should be somewhat competitive for entry-level applicants because the number of students sitting for actuarial exams has increased in the past few years. Students who have passed at least two actuarial exams, have had an internship while in college, and have strong analytical and business skills should have the best job prospects for entry-level positions.

Employment projections data for actuaries, 2020-30
Occupational Title SOC Code Employment, 2020 Projected Employment, 2030 Change, 2020-30 Employment by Industry
Percent Numeric

SOURCE: U.S. Bureau of Labor Statistics, Employment Projections program

Actuaries

15-2011 27,700 34,500 24 6,800 Get data

## State & Area Data

### Occupational Employment and Wage Statistics (OEWS)

The Occupational Employment and Wage Statistics (OEWS) program produces employment and wage estimates annually for over 800 occupations. These estimates are available for the nation as a whole, for individual states, and for metropolitan and nonmetropolitan areas.

### Projections Central

Occupational employment projections are developed for all states by Labor Market Information (LMI) or individual state Employment Projections offices. All state projections data are available at www.projectionscentral.com. Information on this site allows projected employment growth for an occupation to be compared among states or to be compared within one state. In addition, states may produce projections for areas; there are links to each state’s websites where these data may be retrieved.

### CareerOneStop

CareerOneStop includes hundreds of occupational profiles with data available by state and metro area. There are links in the left-hand side menu to compare occupational employment by state and occupational wages by local area or metro area. There is also a salary info tool to search for wages by zip code.

## Similar Occupations

This table shows a list of occupations with job duties that are similar to those of actuaries.

Occupation Job Duties ENTRY-LEVEL EDUCATION 2020 MEDIAN PAY
Accountants and Auditors

Accountants and auditors prepare and examine financial records.

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Budget Analysts

Budget analysts help public and private institutions organize their finances.

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Cost Estimators

Cost estimators collect and analyze data in order to estimate the time, money, materials, and labor required to make a product or provide a service.

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Economists

Economists collect and analyze data, research trends, and evaluate economic issues for resources, goods, and services.

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Financial Analysts

Financial analysts provide guidance to businesses and individuals making investment decisions.

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Insurance Underwriters

Insurance underwriters evaluate insurance applications and decide whether to provide insurance, and under what terms.

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Mathematicians and Statisticians

Mathematicians and statisticians analyze data and apply mathematical and statistical techniques to help solve problems.

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Personal financial advisors provide advice to help individuals manage their finances and plan for their financial future.

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Postsecondary Teachers

Postsecondary teachers instruct students in a wide variety of academic and technical subjects beyond the high school level.

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Casualty Actuarial Society

For more information about actuaries in life and health insurance, retirement benefits, investments, and finance/enterprise risk management, visit

Society of Actuaries

Be an Actuary