If you’re good with numbers, love problem-solving, and have a knack for spotting risks before they happen, you might be wondering:
"What exactly is the job of an actuary?"
Actuaries are the ultimate risk managers. Their job is to use math, data, and financial theory to predict future events and reduce financial risk. From setting insurance premiums to forecasting pension payouts, actuaries are essential to industries like insurance, healthcare, and finance.
If you’re thinking about becoming an actuary, this guide will walk you through what the job of an actuary looks like, where they work, and how to become one.
What Does an Actuary Do?
The job of an actuary revolves around risk assessment and financial forecasting. Actuaries use math, statistics, and analytics to help companies make smart financial decisions.
Here’s a breakdown of the key responsibilities of an actuary:
- Risk Analysis
- Predict future events (like accidents, health issues, or natural disasters) and their financial impact.
- Use statistical models to assess the likelihood of these events.
- Pricing and Costing
- Set the price of insurance premiums (like car, life, or health insurance) to ensure companies stay profitable.
- Actuaries help insurance companies avoid charging too much (which drives away customers) or too little (which leads to losses).
- Financial Forecasting
- Calculate how much money a company needs to set aside for future claims (like hurricane damages or health claims).
- Actuaries ensure companies have enough reserves to handle big payouts.
- Regulatory Compliance
- Actuaries ensure companies follow laws and financial regulations (especially in insurance and pensions).
- They make sure insurance rates are fair and compliant with government rules.
- Data Analysis and Modeling
- Use software like Excel, R, Python, and actuarial tools to create predictive models.
- These models help companies make better financial decisions, like predicting future healthcare costs.
- Consulting and Advising
- Actuaries often work as consultants, helping businesses and government agencies manage risk.
- For example, they might advise a business on how to reduce pension liabilities.
Where Do Actuaries Work?
Actuaries are in demand across several industries, especially in roles where risk and uncertainty are part of daily business. Here’s where most actuaries work:
- Insurance Companies (The Biggest Employer of Actuaries)
- Actuaries calculate premiums for life, health, property, and auto insurance.
- They analyze claim trends (like accident frequency) to ensure insurance companies stay profitable.
- Consulting Firms (Like Aon, Deloitte, and Willis Towers Watson)
- Actuaries help businesses with pension planning, retirement benefits, and insurance-related risk.
- Consulting actuaries often work on multiple projects at once, providing advice to several clients.
- Government (Public Policy and Regulation)
- Actuaries help public programs like Social Security and Medicare predict future payouts.
- They also help government agencies set fair insurance regulations.
- Healthcare Companies
- Actuaries predict healthcare costs and set premiums for health insurance.
- They analyze medical claims data to understand how much healthcare services will cost.
- Corporate Risk Management (Enterprise Risk Management - ERM)
- Actuaries help big corporations prepare for financial risks, like currency fluctuations or supply chain issues.
- Reinsurance Companies
- Reinsurance companies (like Swiss Re) insure insurance companies. Actuaries at these companies analyze large-scale risks, like earthquakes or hurricanes.
What Skills Do You Need to Be an Actuary?
Actuaries are masters of math, analysis, and business strategy. If you’re wondering if you have what it takes to become one, here are the essential skills:
- Mathematics and Statistics
- Actuarial work is about predicting the likelihood of events, so you need to understand probability and advanced statistics.
- Analytical Thinking
- Actuaries think critically and solve complex problems, like how much an insurance company should charge for hurricane coverage in Florida.
- Technical Skills (Excel, R, Python, SQL)
- Actuaries use Excel (VBA), R, Python, and SQL to build financial models and crunch large datasets.
- Business Knowledge
- Since actuaries work with insurance, finance, and retirement planning, they need a strong understanding of business principles.
- Communication Skills
- Actuaries don’t just sit behind a desk. They present their findings to executives, underwriters, and regulators, so they need to explain complex topics in simple terms.
How Much Do Actuaries Earn?
If you’re wondering if the job of an actuary is worth it financially, here’s the breakdown:
- Entry-Level Actuary (0-2 exams passed): $65,000 - $75,000/year
- Mid-Level Actuary (3-5 exams passed): $90,000 - $120,000/year
- Fully Qualified Actuary (all exams passed, senior role): $150,000 - $250,000/year
Top-tier actuaries at consulting firms or reinsurers, or for roles in leadership positions, can earn well over $200,000/year.
How to Become an Actuary
Becoming an actuary takes effort, but it’s a path with a clear progression. Here’s a step-by-step guide:
- Get a Bachelor’s Degree
- Major in actuarial science, math, statistics, or finance.
- Start Taking Actuarial Exams
- Pass Exam P (Probability) and Exam FM (Financial Mathematics) first.
- Each exam takes about 3-6 months of study, and there are 7-10 exams total depending on your specialization.
- Get an Actuarial Internship
- Actuarial internships at insurance companies, consulting firms, and reinsurance firms are critical.
- Without an internship, landing a full-time job can be difficult.
- Land an Entry-Level Role (Actuarial Analyst)
- Apply for roles like Actuarial Analyst or Trainee Actuary on Acturhire.
- Your goal is to gain experience while you keep passing exams.
- Pass More Exams and Get Certifications
- You need to pass 7-10 exams to become a Fellow of the Society of Actuaries (FSA) or a Fellow of the Casualty Actuarial Society (FCAS).
- Exams get harder as you progress, but salaries rise significantly too.
FAQs About the Job of an Actuary
1. What does an actuary do on a daily basis?
- Use data to predict future risks and costs.
- Price insurance premiums.
- Build financial models to calculate liabilities and reserves.
2. How much does an actuary make?
- The median salary for actuaries is $108,000/year, but fully certified actuaries can earn $150,000 to $250,000/year.
3. Do you need to be good at math to be an actuary?
- Yes! Actuaries use math, statistics, and financial theory to solve real-world problems.
4. How many exams do you need to become an actuary?
- To become fully qualified, you need to pass 7-10 actuarial exams, depending on your track.
5. Is becoming an actuary worth it?
- Yes, if you’re looking for a stable, high-paying career with growing demand (22% growth from 2023 to 2033).
Final Thoughts: The Job of an Actuary
The job of an actuary is perfect for people who love math, strategy, and risk management. From pricing insurance premiums to forecasting healthcare costs, actuaries play a critical role in industries that touch nearly every part of our lives.
If you’re looking for a high-paying, future-proof career with predictable job growth and big earning potential, the actuarial field checks all the boxes.
Want to explore available actuary jobs? Check out the latest roles on Acturhire, the best job board for actuaries. Whether you’re just starting or you’re ready for a senior role, Acturhire has jobs waiting for you.
