As you progress in your actuarial career, understanding your value is imperative in ensuring you’re fairly remunerated for the work you do.
It can be easy to get comfortable working at one particular company for a number of years and lose touch with what your value is to the rest of the market.
Even if you’re not looking for a move, understanding your value can help with negotiations around compensation. If you are good at your job and are valued by your company then you likely have leverage, but there is often an asymmetry of information when it comes to compensation.
An employer may have salary benchmarks and will know what other actuaries are paid (either within the company or by speaking with candidates outside the company). When it comes to actuaries themselves, they often do not have a good sense of their true worth.
This article explores practical ways to understand actuarial salaries and we introduce our predictive salary model at Acturhire, offering a detailed analysis of the 2024 actuarial salary landscape.
In order to get a better understanding of the salary you should be looking for, you have three main options: you can ask a recruiter, speak with other actuaries, or consult actuarial salary surveys.
Speaking with a recruiter can be useful as they will have relationships with multiple companies.
The quality of recruiters can vary dramatically, and you may be left with someone who lacks experience in the actuarial markets. If you can get a good, experienced recruiter then that can be a great way to benchmark, particularly for leadership roles.
However, recruiters are primarily driven by a desire to place as many candidates as possible. This means that they may undersell you in an effort to place you in a role quickly, or they may even try to oversell you in an effort to get more commission. They may also only have relationships with certain companies or in certain sectors.
Speaking with other actuaries can be a useful way to benchmark, particularly if you have a close network of actuaries at a similar level of experience to yourself.
However there is a significant stigma relating to salary transparency – people generally don’t like to disclose their salary. Forums such as reddit are great as people can post anonymously, however you only get a subset of the market. Often, it’s primarily less experience actuaries who post on these forums.
If you feel comfortable you can discuss salaries with friends in the industry, but this can be a delicate issue. It’s generally recommended not to discuss salaries with peers at a current employer.
Several recruitment companies produce actuarial salary surveys. These vary with respect to their usefulness – some of the disadvantages include: bucketing salaries based on limited data points, giving you high level summaries without context, and containing bias with respect to how the data was collected.
We have benchmarked our model against the latest DW Simpson model – firstly to give a clear comparison between two data sets, and secondly as it’s built off a significant number of data points.
At Acturhire, we are passionate about salary transparency and set out to produce analysis that gives a good prediction on what salaries are available in the market right now.
This has the benefit of being tied closely to open roles, which can provide a good comparison when thinking about the opportunity cost of changing jobs.
With rampant inflation over the last couple of years, salaries have adjusted quickly to the new normal which can leave loyal staff underpaid.
This comparison will give you a strong benchmark against roles being filled right now, and not just against the rest of the actuarial population, some of which could be underpaid.
In order to build a model that predicts available actuarial salary, we built a generalized linear model on top of the salary data that we collected on roles posted in Q4 2023.
To start with we cleaned the data to ensure that any data anomalies were dealt with (e.g. issues where our systems had incorrectly categorized an ‘International’ role as an ‘Intern’ role).
The aim was to have a set of data as representative of the currently available jobs as possible – we built the model off a data set of 293 jobs.
At the bottom of this article is the full data set used to build the model, so you can see what drove the selections, and dig into the salaries on certain roles yourself.
Job adverts tend to give a range of salaries. Most give an upper or lower bound while some give some form of average amount. In order to predict the average salary, we took the mid point between the minimum and maximum salary.
There is a chance that taking the midpoint isn’t completely accurate. Often a hiring manager will have a range in mind, or a range that they are given by their HR team. Their job is to get the best candidate available. This means that hiring managers will often target employees towards the top of the range as this is one of the ways they can get the best candidate. In this case, the average here may be understated.
There are some limitations to the data that we have available – particularly, extracting the number of years of experience from a job post is challenging to do , so this has been left out of the model. Therefore, experience level of the job likely picks up a lot of the signal you would see from this parameter.
The predicted salary for jobs posted in Q4 2023 is as follows:
If you are a Director or Head of a Department, you can expect $80K higher salary than average.
This intuitively makes sense, these actuaries are likely leading considerably sized team and are possibly two-tier managers. Most of these actuaries will have lots of experience.
Interns are the worst paid, and Managers are also paid well.
When we tried to use the type of qualification (ACAS/ASA/FCAS/FSA/Not qualified) as a predictive variable, the model indicated these as not significant. When grouped into “qualified” and “not qualified”, this became more predictive.
Clearly completing the qualification is valuable, however moving from associate to fellowship doesn’t appear to give a huge boost to salaries in terms of what employers are asking for.
Some actuaries stop exams at the associate level and continue to progress in terms of their career. There’s the chance that companies are advertising for ACAS/ASA as a minimum, but having the FCAS / FSA qualification will help you stand out and get the role.
Health has the lowest salaries available whereas P&C and Life were largely neck and neck with P&C slightly higher. This is consistent with what the DW Simpson survey reports
Similar to the point on qualification above, the model didn’t indicate a material difference between Analyst and Associate / Lead type positions.
This may be driven by a lack of consistency with respect to job titles across the industry. In many cases, “Analyst” positions can be quite senior in the organization with several years of experience
When validating the model, it did seem that the model did a worse job predicting more senior roles. This may be because these roles are more bespoke and have more specific requests. We only trained the model on a few factors so if we were missing detail on a specific technical requirement, that could be reason for us to underestimate.
Understanding your value in the actuarial field is more crucial than ever. The profession is not just about numbers; it's about recognizing and capitalizing on one's worth in a competitive and ever-evolving market.
Our analysis, backed by a predictive model, has shed light on several key insights. Experience emerges as the most significant factor in determining salary, underscoring the value of career advancement and leadership roles. While qualifications play a role, their impact is nuanced, highlighting the importance of strategic career planning over mere credential accumulation.
However, our model, like any analytical tool, has its limitations. It offers a broad overview but may not capture the nuances of highly specialized or senior roles. Therefore, actuaries should use this as one of many tools in their arsenal when assessing their market value.
An actuary's true worth is not just in their current role but in their potential to grow, lead, and innovate.
Let this analysis be a stepping stone in your journey to not only recognize but also fully realize your professional worth. You can keep an eye on currently available roles at Acturhire.
2023 Q4 Salary Data
