How to Become an Actuary
Actuaries play a crucial role in the insurance and financial industries by assessing and managing risk. They use their mathematical and statistical skills to analyze data, develop financial models, and provide valuable insights to help businesses make informed decisions. If you are interested in pursuing a career as an actuary, read on as we guide you through the step-by-step process to become one.
What Is an Actuary?
An actuary is a professional who applies mathematical and statistical methods to assess and mitigate financial risk. They work in various industries, including insurance, finance, consulting, and government. Here are some typical job duties and responsibilities of an actuary:
- Analyzing data to evaluate the probability and potential impact of certain events or risks
- Developing and implementing models to forecast future trends and outcomes
- Designing insurance and pension plans, setting premium rates, and assessing policyholder risks
- Conducting financial and risk assessments to support business decision-making
- Communicating complex concepts and findings to non-technical stakeholders
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Step 1: Complete a BBA Degree
Obtaining a bachelor’s degree is the first step toward becoming an actuary. While there is no specific degree requirement, a Bachelor’s in Business Administration (BBA) is a popular choice among aspiring actuaries. A BBA degree provides a strong foundation in business principles, mathematics, statistics, and finance, which are essential skills for actuaries.
When pursuing a BBA degree, it is beneficial to choose concentrations or elective courses that align with actuarial science or quantitative analysis. These may include courses in probability theory, statistics, calculus, economics, and finance. Some universities also offer specialized actuarial science programs within their business schools.
If you prefer the flexibility of online education, there are accredited online BBA programs available that allow you to complete your degree remotely. Ensure that the program you choose is accredited by recognized accrediting bodies such as the Association to Advance Collegiate Schools of Business (AACSB) or the Accreditation Council for Business Schools and Programs (ACBSP).
Internships can also be valuable for gaining practical experience and networking opportunities in the actuarial field. Seek internships at insurance companies, consulting firms, or other organizations that employ actuaries to enhance your knowledge and skills.
Step 2: Determine If You Need Any Certifications to Become an Actuary
While a bachelor’s degree is the minimum educational requirement, additional certifications can significantly enhance your career prospects as an actuary. The most prominent certification for actuaries is the Associate of the Society of Actuaries (ASA) designation.
To become an ASA, you must pass a series of professional exams administered by actuarial organizations such as the Society of Actuaries (SOA) or the Casualty Actuarial Society (CAS). These exams cover various topics such as probability, financial mathematics, mathematical statistics, and actuarial models.
Additionally, you may also need to complete the Validation by Educational Experience (VEE) requirements, which involve taking specific college courses in economics, mathematical statistics, and corporate finance. Each actuarial organization has its own requirements and examination structure, so it is crucial to research and understand the specific pathway for your desired designation.
Step 3: Learn About Actuary Salaries
Actuaries are well-compensated for their specialized skills and expertise. According to the U.S. Bureau of Labor Statistics (BLS), the median annual wage for actuaries was $105,900 in May 2021. However, salaries can vary based on factors such as experience, education, industry, and geographic location.
Actuaries employed in industries such as insurance carriers, consulting services, and government agencies tend to earn higher salaries. Attaining professional designations and advanced degrees, such as a Master’s in Actuarial Science or an MBA, can also lead to increased earning potential in the field.
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Step 4: Find a Job as an Actuary
Actuaries work in a variety of environments, including insurance companies, consulting firms, financial institutions, government agencies, and healthcare organizations. Some actuaries also choose to work as independent consultants.
Here are typical workplaces and organizations that hire actuaries:
- Insurance companies (life insurance, property and casualty insurance, health insurance)
- Consulting firms specializing in actuarial services
- Banks and financial institutions
- Government agencies, such as the Social Security Administration or the Federal Reserve
- Pension and retirement benefit organizations
- Healthcare organizations, including hospitals and managed care companies
When searching for job opportunities, consider networking through professional organizations such as the Society of Actuaries (SOA) or the Casualty Actuarial Society (CAS). These organizations provide valuable resources, including job boards, career fairs, and networking events tailored specifically to actuaries.
