Actuarial Science is a discipline that is essential for the insurance industry! Furthermore, it is a crucial for risk management and help businesses assess the risk of many certain events.
Let’s define it.
What is Actuarial Science? Definition.
Actuarial Science is a study that uses a range of statistical and mathematical methods to assess the risk that occurs in many industries such as insurance, finance, investments, banking and more.
Actuarial science has to formulate, analyze and to cope with the bad financial consequences of uncertain future events.
Actually, the actuarial science is a comprehensive mixture of statistics, math, finance, and economics.
On this page you will see:
What Does An Actuary Do?
Nowadays, the Actuary is among the top-ranked jobs with high incomes and salaries.
As experts, actuaries have to:
- Evaluate the likelihood of different future events.
- Formulate policies and find ways to decrease the likelihood of undesirable events. They do it with the help of numbers.
- Decrease the bad consequence of undesirable events.
- Minimize the cost of the risks and undesirable events.
Common responsibilities and duties include gathering relevant figures, analyzing data with the help of specialized computer software, creating strategies to manage the financial impact of undesirable events, compiling reports and more.
In the insurance area, actuaries are also the people who help create insurance policies, pension plans, and other financial products and services.
With their wide knowledge of a variety of sciences such as maths, finance, statistics and etc, the actuaries help ensure that the financial and insurance products are created on a solid financial basis.
On the other hand, actuaries are becoming more and more needed not only in insurance field but to help companies manage their own risk.
Actuaries can help companies avoid, manage, and respond to any potential financial risks that may occur in their everyday business operations.
Nowadays the actuarial science is very popular for creating different types of life insurance and different types of health insurance products. Also, many actuaries are employed in the property and casualty insurance industry.
Despite the fact that, actuaries often work for insurance companies and financial funds, more and more companies are adding actuaries to their management department.
An Actuary Also Can Work For:
- The Government
- Investment Companies
- Colleges and Universities
- Rating Bureaus
- Firms offering consulting services
- Fraternal and other types of organizations.
In a fast-changing world, with a high level of unpredictability and emerging risks, there is a wide range of job opportunities for professions that manage risk such as actuaries.
What Do You Need to Become an Actuary?
If you want to be an actuary, you have to know that you need a really solid background in mathematics.
Generally, job requirements include having a bachelor’s degree in mathematics, actuarial science, statistics, and etc.
Also, other business-related disciplines such as economics or finance are acceptable.
Nowadays, a wide number of colleges and universities offer actuarial sciences programs that include business, mathematics, and statistics coursework.
A degree in actuarial sciences is very important but not essential to becoming an actuary.
On the other hand, getting certified is very crucial.
What are the certification and licensure requirements?
Most employers require students to be professionally certified by one of the following organizations:
- The Society of Actuaries (SOA) – the SOA is the largest professional organization dedicated to serving 27,000 actuarial members, candidates, employers and the public.
- Casualty Actuarial Society (CAS) – the Casualty Actuarial Society (CAS)’s mission is to advance actuarial science through a singular focus on research and education for property and casualty actuarial practice. Among its 6,700 members are experts in property and casualty insurance, reinsurance, finance, risk management, and enterprise risk management.
You have to know that, the both organizations offer associate certification, which takes 4-6 years to complete, and fellowship certification, which may take additional 2 or 3 years.
What is the main difference between the SOA and the CAS?
- The CAS certifies in the area of the property and casualty. As you may know, property and casualty include automobile, medical malpractice, homeowners, and workers’ compensation insurance.
- The SOA certifies in the area of the life insurance, health insurance, investments, retirement benefits, and finance.
If you want to earn a certification, you need to pass a range of exams, attend specialized professional seminars. Also, you have to complete different online courses and cover other educational requirements.
Salary and Earnings
As we mentioned above, the Actuary is among the top-ranked job positions with high incomes and salaries.
Also, it is rated as one of the best jobs in America. The actuarial career can offer one of the best the combinations of benefits.
An experienced actuary has the potential to earn a salary from $80,000 to $200,000 annually, and many actuaries earn even more than that.
In addition to that, many firms also provide cash bonuses for each professional designation achieved.
In the next years, it is expected the employment of actuaries to grow rapidly.
According to Bureau of Labor Statistics, the median annual wage for actuaries was $97,070 in May 2015.
Professional Organizations in The Area of Actuarial Science
These professional organizations can play a very important role in your development as a professional actuary.
They also, keep you updated with what is happening in your field. In addition to that, these organizations provide a network of contacts that can help you find jobs.
Here is a list of some of the top professional associations serving actuaries and employers:
The American Academy of Actuaries is a D.C.-based 18,500+ member professional association. Its academy members include consultants, corporate executives and staff, regulators, government officials, academicians, and retired actuaries. Their areas of practice cover pensions, life insurance, casualty insurance, health insurance, financial reporting, risk management, and more.
ASPPA, and its three sister organizations — ACOPA, NTSA and NAPA — comprise the American Retirement Association, the premier national organization for retirement plan professionals in the industry.
ASPPA offers its members extensive educational opportunities including robust credentialing, certificate and continuing education programs, along with the best lineup of conferences and networking opportunities in the industry.
The Actuarial Foundation, a 501(c)(3) organization, was established in 1994 to help facilitate and broaden the profession’s contribution to society. The Foundation explores innovative ways to apply actuarial skills in the public interest.
The International Actuarial Association (IAA) is the worldwide association of professional actuarial associations, with a number of special interest sections for individual actuaries.
The IAA exists to encourage the development of a global profession, acknowledged as technically competent and professionally reliable, which will ensure that the public interest is served.