When people think of careers in math and statistics, they often think of being a teacher or professor. However, learning how to become an actuary can allow you to earn a great living and work in high-level business positions.
An actuary uses their knowledge of math to create financial estimates for their clients. These are highly sought-after positions and are very difficult to obtain. However, with enough focus and by following the right steps, you can become an actuary.
If you’re interested in this career field and want to learn more, check out our guide below on how to become an actuary in 2020.
What Is an Actuary?
An actuary is a business professional who manages and measures the risks of businesses through business management, mathematics, and statistics. The goal of an actuary is to help a business grow and increase its value to customers.
What Does an Actuary Do?
An actuary’s job has several duties associated with it. Below is a list of some of the key responsibilities of an actuary and what they entail.
Evaluate the Likelihood of Events
Actuaries help predict a company’s future. They use numbers to evaluate the way certain events happen and how they’ll impact the company. Some of these predictions are vital for the decisions a company makes about a new product or service.
Help Manage Risk
Successful businesses take risks, but they rarely take them recklessly. Actuaries take a look at situations from various perspectives. They use their analytical skills, knowledge, and understanding of people to identify risks facing society and how a business or organization relates to those risks.
You’ve probably heard the old saying about spending money to make money. A business that spends recklessly won’t be around for long. An actuary helps a company determine how much it should invest to cover any financial losses that occur in the future, based on predicted events.
Essential Actuary Skills
Problem Solving Skills
An actuary has to be a problem solver. One of their main responsibilities is to examine complex data and find trends and patterns that lead to certain outcomes. Actuaries look for ways to minimize risks and undesirable outcomes.
Actuaries have to be skilled at math on a variety of levels. They must be able to do basic arithmetic quickly. Actuaries must be well-versed in statistics, calculus, and probability.
Actuaries don’t work alone. They collaborate with various personnel within a business and it is important they communicate effectively with everyone all the time. Strong communication skills allow actuaries to convey complex information in a way that everyone understands.
Actuarial work involves using computers and various modeling software every day. Actuaries frequently use tables and models to evaluate and organize large data sets. You’ll need programming skills in a statistical programming language and a strong knowledge of Microsoft Office to work as an actuary.
Actuary Salaries and Job Outlook
One of the most significant benefits of being an actuary is the salary. The median annual wage for actuaries was $108,350 in 2019. The job outlook for an actuary, according to the Bureau of Labor Statistics, is 18 percent. This job outlook is much faster than the average.
Factors that have an impact on pay and job availability include your location, education, additional skills, and experience.
How Long Does it Take to Become an Actuary?
To become a qualified actuary, it takes between seven and 10 years. Aspiring actuaries spend between three to five years earning their bachelor’s degree. However, that’s not where you spend the most time you work to become an actuary.
Taking and passing all 10 of the actuarial exams takes six to 10 years. However, you can work as an actuary after passing the first two exams.
How to Become an Actuary: A Step by Step Guide
It can take a long time to become an actuary, but if you follow this step-by-step guide, you can work in this highly rewarding field.
Step 1: Earn Your Bachelor’s Degree
The first step to becoming an actuary is to get your bachelor’s degree. This isn’t technically a requirement, but it is recommended because you’re unlikely to be employed without one. You don’t need one in a specific field, but consider majoring in actuarial science, business, statistics, or finance.
Step 2: Pass the First Two Actuarial Exams
After you’ve earned your degree, the next step is to pass your actuarial exams. These are Exam P and Exam FM, which you can take through the Society of Actuaries. Be prepared, these exams each take from three to six months of study. Most people take these exams while they’re in college.
Step 3: Take on an Actuarial Internship
Typically, you’ll have to take part in at least a single internship before graduating college. Some positions that you can work in include underwriting, risk management, investments, or data analysis. You’ll need to pass a minimum of one exam to get an internship position.
Step 4: Get Your First Job as an Entry-Level Actuary
Being an entry-level actuary is the first step toward becoming a fully qualified actuary. This position is usually available to people who have passed two to three exams.
Step 4: Increase Your Skills as an Actuary
Finally, after you’ve started working as an actuary, you can work toward associateship. Associateship is the first level of an actuary. You’re required to pass seven exams to become an associate. Then, you can gain work experience for your fellowship. A fellowship is for people who have passed all 10 actuary exams. This means you’re fully qualified as an actuary.
Should You Become an Actuary in 2020?
It’s no secret that becoming an actuary is a difficult process. It takes hours and hours of study and years to reach an entry-level position as an actuary.
However, if you have a love of math, problem-solving, and want to continuously push yourself in your career, then becoming an actuary is a position worth working toward.
Yes, you take several courses in mathematics and use calculus, statistics, and other math-related skills as an actuary.
Luckily, actuaries have multiple degree options. You can earn your bachelor’s in programming, finance, accounting, economics, business, statistics, mathematics, or actuarial science.
The general rule of thumb for actuary exams is to study 100 hours for each hour of the exam. The first two exams you take are both three hours long, which means you’d need to study 300 hours for each one.
Yes, you can start a career as an actuary with no degree, but it will be more difficult. Most employers want to see that you have some form of commitment before hiring you, which is why a degree is important. Even if you don’t have a degree related to being an actuary, a bachelor’s degree is still beneficial to the hiring process.