If you're considering a career in actuarial science, one of the most important factors to consider is your potential earnings. Actuaries are highly valued professionals who analyze and manage risk in various industry verticals and across different functions. But is an actuarial career worth it from a financial perspective? In this blog post, we'll explore the earnings potential of actuarial careers in different industries and help you make an informed decision about pursuing this field, and to see whether you’re paid the right amount considering your experience levels in the field.
Actuarial salaries can vary significantly depending on industry, location, years of experience, and level of education. There is also a difference in earning potential across roles in Property & Casualty (P&C) insurance, where actuaries typically hold a qualification through the Casualty Actuarial Society (CAS), and life, health insurance, and retirement where actuaries typically qualify through the Society of Actuaries (SOA).
DW Simpson produce data each year that summarizes salary and bonus data from many industries across different factors. Below we summarize some of the 2022 trends to help you understand your earning potential as an actuary.
An actuary’s compensation can increase quite quickly in the first few years of an actuarial career. Below are expected base salaries for actuarial students.
For student actuaries, the highest earning potential is for P&C actuaries with Health Insurance actuaries a close second. Pension actuaries earn significantly less with an expected $15k difference in base salary after eight years of experience.
The DW Simpson survey doesn’t consider the impact of other factors. Most student actuaries will be passing exams quite quickly in their first few years of their actuarial career. Passing exams makes you more valuable to an employer and typically more exam passes will lead to higher salaries. On the other hand, many student actuaries find exams difficult and decide not to pursue the qualification all the way to FCAS or FSA. There are plenty of well-paying roles for part-qualified actuaries and lots of experience in actuarial work can be very valuable to employers.
After completing the first few exams and attaining either the ACAS or ASA qualification, earning potential increases quite quickly. Below are expected base salaries for actuaries who have attained the first designation for either the CAS or SOA.
There is also a significant bonus component to actuaries’ total compensation once they hit this level. Below is the typical bonus for an ACAS or ASA-credentialed actuary.
Similarly to students, actuaries earn highest in P&C and Health insurance, while life insurance and pensions are significantly lower, although the increase on student salaries is very considerable. Bonuses can be very high and increase quickly based on years of experience.
These numbers demonstrate the importance of not only passing exams quickly but also getting years of experience under your belt. Actuaries who take the time to excel at their jobs will always earn better than book-smart actuaries who just excel at passing exams.
The final step on the way to becoming a fully fledged actuary is obtaining the FCAS or FSA qualification. Below are typical salaries for actuaries who have completed all exams and are fully credentialed.
Salaries are higher again than the ASA/ACAS level. This highlights the importance of passing exams but also the high demand for actuarial professional who have completed the exam process. Exams are often seen as providing a strong knowledge base from which actuaries can be trusted to contribute to a company’s financial success.
FCAS actuaries are the best paid with strong salaries in health and Life insurance. Pensions salaries are again considerably lower than the other disciplines.
Bonuses become an even more important part of an actuary’s compensation at the FSA/FCAS level. Below are the typical bonuses reported to DW Simpson.
Once fully qualified, actuaries can expect very strong bonuses across the board. This will depend on company performance but typically provides a larger proportion of the total compensation at senior levels.
Of course, these figures are just averages, and your actual earnings may be higher or lower depending on your specific circumstances. Years of experience and exams passed are not the only driver of compensation. Companies hire actuaries to perform job roles and doing well here is much more important in driving your ability to attain some of the salaries and bonuses discussed above. Many companies have a transparent bonus structure that is based on personal performance or hours billed.
There are lots of other drivers too: one major area is location. For example, actuaries working in high-cost-of-living areas like New York City are likely to earn more than those working in smaller cities or rural areas. Companies based in larger cities will typically pay higher salaries as living costs are higher. Actuaries need to balance the higher salaries in these areas with the additional costs of living in these locations. It remains to be seen how the impact of remote working will impact salaries in high vs. low cost of living areas. It may be possible to work for a company based in an area that pays high salaries but work remotely either some or all of the time.
In addition to salary surveys such as this one, new pay transparency laws mean that more companies than ever are posting salary ranges for their open job positions. This is great insight for actuaries who can benchmark their salary against similar roles being advertised at other companies. At Acturhire we are passionate about salary openness and we allow candidates to filter live jobs based on salary range to find the best paying roles to apply for.
For more up to date information on salaries available in 2023 and 2024, check out our analysis of Q3 2023 salaries and our predictive model on available salaries from the end of 2023.
