Median annual earnings of actuaries were $69,970 in 2002. The middle 50 percent earned between $50,510 and $99,820. The lowest 10 percent had earnings of less than $39,700, while the top 10 percent earned more than $137,650.
According to the National Association of Colleges and Employers, annual starting salaries for graduates with a bachelor's degree in actuarial science averaged $40,396 in 2003.
Insurance companies and consulting firms give merit increases to actuaries as they gain experience and pass examinations. Some companies also offer cash bonuses for each professional designation achieved. A 2003 survey by Life Office Management Association, Inc., of the largest U.S. insurance and financial services companies indicated that the average base salary for an entry-level actuary was $46,991. Associate actuaries, who direct and provide leadership in the design, pricing, and implementation of insurance products, received an average salary of $99,446. Actuaries at the highest technical level without managerial responsibilities reportedly were paid an average of $104,235.
One of the main functions of actuaries is to help businesses assess the risk of certain events occurring and formulate policies that minimize the cost of that risk. For this reason, actuaries are essential to the insurance industry. Actuaries assemble and analyze data to estimate the probability and likely cost of the occurrence of an event such as death, sickness, injury, disability, or loss of property. Actuaries also address financial questions, including those involving the level of pension contributions required to produce a certain retirement income level and the way in which a company should invest resources to maximize return on investments in light of potential risk. Using their broad knowledge of statistics, finance, and business, actuaries help design insurance policies, pension plans, and other financial strategies in a manner which will help ensure that the plans are maintained on a sound financial basis.
Most actuaries are employed in the insurance industry, specializing in life and health insurance or property and casualty insurance. They produce probability tables which determine the likelihood that a potential future event will generate a claim. From these tables, they estimate the amount a company can expect to pay in claims. For example, property and casualty actuaries calculate the expected amount of claims resulting from automobile accidents, which varies depending on the insured person's age, sex, driving history, type of car, and other factors. Actuaries ensure that the price, or premium, charged for such insurance will enable the company to cover claims and other expenses. This premium must be profitable, yet competitive with other insurance companies. Within the life and health insurance fields, actuaries are helping to develop long-term-care insurance and annuity policies, the latter a growing investment tool for many individuals.
Actuaries in other financial services industries manage credit and help price corporate security offerings. They also devise new investment tools to help their firms compete with other financial services companies. Pension actuaries working under the provisions of the Employee Retirement Income Security Act (ERISA) of 1974 evaluate pension plans covered by that Act and report on the plans' financial soundness to participants, sponsors, and Federal regulators. Actuaries working in government help manage social programs such as Social Security and Medicare.
Actuaries may help determine company policy and may need to explain complex technical matters to company executives, government officials, shareholders, policyholders, or the public in general. They may testify before public agencies on proposed legislation affecting their businesses or explain changes in contract provisions to customers. They also may help companies develop plans to enter new lines of business or new geographic markets with existing lines of business by forecasting demand in competitive settings.
Both staff actuaries employed by businesses and consulting actuaries provide advice to clients on a contract basis. The duties of most consulting actuaries are similar to those of other actuaries. For example, some may evaluate company pension plans by calculating the future value of employee and employer contributions and determining whether the amounts are sufficient to meet the future needs of retirees. Others help companies reduce their insurance costs by lowering the level of risk the companies take on. For instance, they may provide advice on how to lessen the risk of injury on the job, which will lower worker's compensation costs. Consulting actuaries sometimes testify in court regarding the value of the potential lifetime earnings of a person who is disabled or killed in an accident, the current value of future pension benefits (in divorce cases), or other values arrived at by complex calculations. Many consulting actuaries work in reinsurance, a field in which one insurance company arranges to share a large prospective liability policy with another insurance company in exchange for a percentage of the premium.
.Employment of actuaries is expected to grow as fast as the average for all occupations through 2012. Employment opportunities should remain good for those who qualify, because the stringent qualifying examination system restricts the number of candidates. Employment growth in the insurance industry is expected to continue at a stable pace, while more significant job growth is likely in some other industries. In addition, a small number of jobs will open up each year to replace actuaries who leave the occupation to retire or who find new jobs.
Steady demand by the insurance industry—the largest employer of actuaries—should ensure that actuary jobs in this key industry will not decrease over the projection period. Although relatively few new jobs will be created, actuaries will continue to be needed to develop, price, and evaluate a variety of insurance products and calculate the costs of new risks. Recently, employment of actuaries in life insurance had begun to decline, but the growing popularity of annuities, a financial product offered primarily by life insurance companies, has resulted in some job growth in this specialty. Also, new actuarial positions have been created in property-casualty insurance to analyze evolving risks, such as terrorism.
Some new employment opportunities for actuaries should also become available in the health-care field as health-care issues and Medicare reform continue to receive growing attention. Increased regulation of managed health-care companies and the desire to contain health-care costs will continue to provide job opportunities for actuaries, who will also be needed to evaluate the risks associated with new medical issues, such as genetic testing and the impact of new diseases. Others in this field are involved in drafting health-care legislation.
A significant proportion of new actuaries will find employment with consulting firms. Companies that may not find it cost effective to hire their own actuaries are increasingly hiring consulting actuaries to analyze various risks. Other areas with notable growth prospects are information services and accounting services. Also, because actuarial skills are increasingly seen as useful to other industries that deal with risk, such as the airline and the banking industries, additional job openings may be created in these industries.
The best job prospects for entry-level positions will be for those candidates who have passed at least one or two of the initial actuarial exams. Candidates with additional knowledge or experience, such as computer programming skills, will be particularly attractive to employers. Most jobs in this occupation are located in urban areas, but opportunities vary by geographic location. Opportunities should be best in Illinois, New Jersey, New York, and Connecticut—the four States in which about one-third of all actuary jobs are concentrated.
.Actuaries need a strong background in mathematics and general business. Applicants for beginning actuarial jobs usually have a bachelor's degree in mathematics, actuarial science, statistics, or a business-related discipline, such as economics, finance, or accounting. About 100 colleges and universities offer an actuarial science program, and most offer a degree in mathematics, statistics, economics, or finance. Some companies hire applicants without specifying a major, provided that the applicant has a working knowledge of mathematics, including calculus, probability, and statistics, and has demonstrated this knowledge by passing one or two actuarial exams required for professional designation. Courses in economics, accounting, finance, and insurance also are useful. Companies increasingly prefer well-rounded individuals who, in addition to having acquired a strong technical background, have some training in liberal arts and business and possess strong communication skills.
In addition to knowledge of mathematics, computer skills are becoming increasingly important. Actuaries should be able to develop and use spreadsheets and databases, as well as standard statistical analysis software. Knowledge of computer programming languages, such as Visual Basic, also is useful.
Two professional societies sponsor programs leading to full professional status in their specialty. The first, the Society of Actuaries (SOA), administers a series of actuarial examinations in the life insurance, health benefits systems, retirement systems, and finance and investment fields. The Casualty Actuarial Society (CAS), as the name indicates, gives a series of examinations in the property and casualty field, which includes fire, accident, medical malpractice, worker's compensation, and personal injury liability.
The first four exams in the SOA and CAS examination series are jointly sponsored by the two societies and cover the same material. For this reason, students do not need to commit themselves to a specialty until they have taken the initial examinations, which test an individual's competence in probability, calculus, statistics, and other branches of mathematics. The first few examinations help students evaluate their potential as actuaries. Many prospective actuaries begin taking the exams in college with the help of self-study guides and courses. Those who pass one or more examinations have better opportunities for employment at higher starting salaries than those who do not.
After graduating from college, most prospective actuaries gain on-the job experience at an insurance company or consulting firm, while at the same time working to complete the examination process. Actuaries are encouraged to finish the entire series of examinations as soon as possible, advancing first to the Associate level (with an ASA or ACAS designation) and then to the Fellowship level (FSA or FCAS designation). Advanced topics in the casualty field include investment and assets, dynamic financial analysis, and valuation of insurance. Candidates in the SOA examination series must choose a specialty—group and health benefits, individual life and annuities, pensions, investments, or finance. Examinations are given twice a year, in the spring and the fall. Although many companies allot time to their employees for study, home study is required to pass the examinations, and many actuaries study for months to prepare for each examination. It is likewise common for employers to pay the hundreds of dollars for examination fees and study materials. Most actuaries reach the Associate level within 4 to 6 years and the Fellowship level a few years later.
Specific requirements apply to pension actuaries, who verify the financial status of defined benefit pension plans for the Federal Government. These actuaries must be enrolled by the Joint Board for the Enrollment of Actuaries. To qualify for enrollment, applicants must meet certain experience and examination requirements, as stipulated by the Board.
To perform their duties effectively, actuaries must keep up with current economic and social trends and legislation, as well as with developments in health, business, finance, and economics that could affect insurance or investment practices. Good communication and interpersonal skills also are important, particularly for prospective consulting actuaries.
Beginning actuaries often rotate among different jobs in an organization to learn various actuarial operations and phases of insurance work, such as marketing, underwriting, and product development. At first, they prepare data for actuarial projects or perform other simple tasks. As they gain experience, actuaries may supervise clerks, prepare correspondence, draft reports, and conduct research. They may move from one company to another early in their careers as they advance to higher positions.
Advancement depends largely on job performance and the number of actuarial examinations passed. Actuaries with a broad knowledge of the insurance, pension, investment, or employee benefits fields can rise to administrative and executive positions in their companies. Actuaries with supervisory ability may advance to management positions in other areas, such as underwriting, accounting, data processing, marketing, and advertising. Some actuaries assume college and university faculty positions. (See the statement on teachers—postsecondary elsewhere in the Handbook.)
.Actuaries need a strong background in mathematics, statistics, and related fields. Other workers whose jobs involve related skills include accountants and auditors, budget analysts, economists, market and survey researchers, financial analysts and personal financial advisors, insurance underwriters, mathematicians, and statisticians.
Career information on actuaries specializing in pensions is available from:
For information about actuarial careers in life and health insurance, employee benefits and pensions, and finance and investments, contact:
For information about actuarial careers in property and casualty insurance, contact:
The SOA and CAS jointly sponsor a Web site for those interested in pursuing an actuarial career.
For general facts about actuarial careers, contact
About 6 out of 10 actuaries are employed in the insurance industry. Employment opportunities will be good despite the limited number of openings in this small occupation, as stringent qualifying requirements limit the number of new entrants. This premium must be profitable, yet competitive with other insurance companies. Both staff actuaries employed by businesses and consulting actuaries provide advice to clients on a contract basis. Applicants for beginning actuarial jobs usually have a bachelor's degree in mathematics, actuarial science, statistics, or a business-related discipline, such as economics, finance, or accounting.
Summary of: http://www.collegegrad.com/careers/proft42.shtml
Actuaries who work for insurance companies predict insurance risk by using statistics. They calculate how much people need to pay into their pension or retirement plans to offset pension payments. They like jobs offering steady employment and good pay. College majors that are best for this work are math, actuarial science, and statistics. Completing the exams usually takes from five to ten years.
Summary of: http://www.iseek.org/sv/13000.jsp?id=100003
Nature of the Work Actuaries answer questions about future risk, make pricing decisions, and formulate investment strategies. Some design insurance, financial, and pension plans and ensure that these plans are maintained on a sound financial basis. Finally, this premium charged must be profitable and yet be competitive with other insurance companies. Most of the remaining actuaries worked for firms providing services, especially management and public relations, and actuarial consulting services. It is an advantage to pass, while still in school, two or more of the examinations offered by professional actuarial societies.
Summary of: http://www.umsl.edu/services/govdocs/ooh9899/11.htm
Pricing, management reporting, actuarial modeling and data analysis actuarial projects. CASUALTY 16849 Student Midwest actuarial employer seeks an entry level actuarial student. Actuarial modeling, forecasting, reserving, database programming and other assignments. HEALTH 16970 Student MBA or other advanced degree a plus. PENSION 16902 Student Access or Visual Basic experience a plus.
Summary of: http://www.dwsimpson.com/studjobs.html
Be An Actuary - What is an Actuary. "Risk" is the possibility that an undesirable event will occur. So, reducing their financial impact is very important. Actuaries are the leading professionals in finding ways to manage risk. Would a company build a factory that could be destroyed in an earthquake if it were not protected by insurance.
Summary of: http://www.beanactuary.org/about/whatis.cfm
Got an insurance policy, and want a loan. With private players now in the field, there will be innovative products, better packaging, improved customer service, and, most importantly, greater employment opportunities. An actuary not only fixes the premium rates for new products, but also revises both products and prices. They calculate costs to assume risk, for example how much to charge policyholders for life or health insurance premiums. In the life insurance business, an underwriter is expected to filter the "bad or substandard lives".
Summary of: http://www.moneycontrol.com/insurance/features.php?filename=nonpublishreports14112002171540.htm
Established in 1989, we are the largest firm dedicated to Actuarial Search and have a working relationship with most firms that employ Actuaries. Must have at least 5 years of casualty experience. Reserving knowledge a plus. Pricing, advanced financial studies, database projects and reserving of broad lines of business. Reinsurance pricing, advanced actuarial modeling, contract analysis and other projects.
Summary of: http://www.dwsimpson.com/
While some welcome the idea of a peer review, there are others who oppose it. And there are some who abhor the idea of having a foreign actuary in the peer review committee. Ramakrishnan says section 22 of the Insurance Act gives IRDA necessary powers to ask a life insurer to redo the valuation work. Moreover, will IRDA take the trouble to go through the whole process of making the insurance industry transparent is a moot question that needs to be addressed. On the other hand, it is only in foreign countries (that too in the US) failure of insurance companies has become a common feature.
Summary of: http://www.domain-b.com/finance/insurance/irda/20020422_peer.html
Some design insurance, financial, and pension plans and ensure that they are maintained on a sound financial basis. Most actuaries specialize in either life, health, or property and casualty insurance; others specialize in pension plans or in financial planning and investment. Finally, this price must be profitable and yet be competitive with other insurance companies. Most of the remaining actuaries worked for firms providing services, especially management and public relations, and actuarial consulting services. It is an advantage to pass, while still in school, two or more of the examinations offered by professional actuarial societies.
Summary of: http://www.umsl.edu/services/govdocs/ooh9697/ocos041.htm