All companies must be mindful of risk management, but companies in the insurance, finance and related fields must be particularly careful about managing risk wisely. For businesses, risk presents both opportunities and the possibility of undesirable outcomes. Companies rely on actuaries to provide the information necessary for smart risk-taking.
Actuaries play a vital role in the success of an organization. If you’re curious about how to become an actuary, you can explore this detailed career guide to chart your path to your future profession.
What Does an Actuary Do?
An actuary is first responsible for analyzing raw data using mathematics, statistics and financial and business theory in order to assess the likelihood of a future event. Second, they also go beyond assessments by considering ways to reduce the likelihood of undesirable outcomes. Their third main area of responsibility is to develop strategies for lessening the impacts of undesirable outcomes, should they occur.
The specific responsibilities of an actuary will depend on their particular field and the company they work for, as well as their seniority level within that company. In general, however, an actuary might be expected to do the following tasks:
- Gather statistical data for analysis
- Calculate the probability of an undesirable outcome, such as a natural disaster (property insurance) or death (life insurance)
- Create charts, graphs and other information vehicles to explain their work to the company’s decision makers, shareholders, clients or government administrators
- Develop business strategies, insurance policies, investments and other policies in a way that wisely manages risk
It’s typical for actuaries to work on cross-functional teams. For instance, they may work in close collaboration with a financial analyst to determine premiums for an insurance plan.
To perform their calculations, actuaries use high-tech modeling and financial forecasting software, as well as database software to develop charts and graphs. This is why computer literacy skills are important for these professionals.
Where Do Actuaries Work?
Actuaries work in an office setting, and many do not need to travel for work. However, those who work for consulting firms may occasionally need to travel to meet with their clients face to face.
The vast majority of actuaries in 2019 worked for finance and insurance companies (71%). Some actuaries were in management positions (6%). Smaller percentages were self-employed professionals (4%) and government employees (3%).*
How to Become an Actuary: An Overview
The process of how to become an actuary requires a great deal of hard work and studying. However, it can be incredibly rewarding, especially for people who like working with numbers and who have a keen eye for details. There are a few things you can do while still in high school to prepare for your future career. For example, you can take as many mathematics courses as possible and explore relevant internship and job-shadowing opportunities.
When you’re ready to apply to colleges, you’ll want to earn a bachelor of science degree in a relevant subject, such as mathematics or applied business analytics. Statistics and calculus courses are particularly helpful for college students who aspire to become actuaries. During your senior year of college, or shortly after you graduate, you’ll need to begin working on the actuarial certification process.
There are two certification options for actuaries (discussed in detail below). Each involves a multi-step process that can take several years to fully complete. However, you can begin working as an entry-level actuary analyst well before you’re fully certified.
After achieving your first level of certification, you may opt to stop there, or you might continue your studies to achieve the higher level of certification. This will enhance your opportunities for advancement within your field — perhaps to supervisory positions or even the C-suite. Periodically, you’ll need to renew your certification by taking continuing education courses.
Essential Skills and Characteristics for Becoming an Actuary
Actuaries are highly skilled professionals who can benefit from having a range of diverse characteristics and abilities. If you aspire to become an actuary, you can actively work on cultivating the following:
- Oral and written communication skills
- Mathematical skills
- Analytical reasoning
- Computer literacy
- Problem-solving abilities
- Interpersonal skills
- Attention to detail
Actuaries work both independently and collaboratively within teams. They may sometimes need to explain technical concepts to people who lack an actuarial background. High-level actuaries may sometimes be called upon to give presentations to clients or to the board of a company.
In addition to performing their work duties, actuaries must continue to study and refine their skills long after they have achieved certification. Indeed, this profession is ideal for people who think of themselves as lifelong learners.
Becoming an Actuary: What to Do in High School
If you’re still in high school and you’re interested in this career path, you could start the process of becoming an actuary right now. Motivated students are strongly encouraged to challenge themselves with high-level mathematics classes. Talk to your guidance counselor about taking Advanced Placement math courses — preferably statistics — as well as computer science classes.
It’s also a good idea to participate in relevant extracurricular activities, such as the math club, if your school has one. If not, any extracurricular activities will be helpful, including sports teams and other activities that provide the opportunity to step into leadership roles.
The Society of Actuaries (SOA) also offers a free trial account that high schoolers and college students can use to take the Fundamentals of Actuarial Practice (FAP) e-learning course. The FAP consists of eight modules that build fundamental knowledge of the profession. Even if you cannot complete the full course before your free trial account expires, completing just the first few modules will give you a strong head start on your career plans.
There are two more steps you can take during high school: complete a relevant internship and attend an actuarial summer program. An internship at a firm will give you a first-hand look at this profession. It can also help you choose a subfield within actuarial practice.
Actuarial summer programs are offered by multiple universities, some of them in affiliation with professional organizations. Participation in an actuarial summer program for high school students will give you the chance to take a deep dive into the details of this profession. You may also be able to connect with industry experts, and perhaps acquire a mentor as you work toward your career goals.
Undergraduate Actuary Degree Options
There is no one universal actuary degree. Rather, there are a number of undergraduate degree options available to aspiring actuaries. Any degree you choose should have a strong basis in mathematics, with an emphasis on analytical skills.
For example, you could earn a Bachelor of Science in Applied Business Analytics. This type of degree usually combines mathematics and analytics for business applications with information technology skills—all of which are critical for an actuary’s career path.
Another option is to earn a Bachelor of Science in Accounting, which will give you a strong foundation in business-related mathematical skills. Lastly, you might consider earning a Bachelor of Science in Mathematics.
Do Actuaries Need a Master’s Degree?
Often, for professionals who are expected to perform complex, challenging work, there is a strong preference or requirement that they have a master’s degree. However, this isn’t the case for aspiring actuaries.
Actuaries instead go through a lengthy and rigorous certification process. In addition to a bachelor’s degree that emphasizes mathematics and analytical skills, this certification process is more than sufficient to advance in this field.
How to Become an Actuary: Required Certifications
All actuaries must be certified; however, you are not expected to complete the entire certification process before starting your first job as an actuary. There are two professional organizations that certify actuaries: the Casualty Actuarial Society (CAS) and the Society of Actuaries (SOA).
You should plan on joining the CAS and earning your certification through this organization if you intend to work in the property and casualty field, which includes the following types of insurance carriers:
- Auto insurance
- Homeowner’s insurance
- Workers’ compensation insurance
- Medical malpractice insurance
You should plan on joining the SOA if you would like to work in any of the following specialty fields:
- Life insurance
- Health insurance
- Retirement benefits
Both the CAS and the SOA offer two levels of certification. You’ll start by working toward your associate certification. Later, you can earn your fellowship certification, which may help you advance within your company.
Many employers prefer that new graduates have already progressed toward certification when applying to actuarial jobs. You have two options for meeting this preference. The first is to take the first exam during your senior year of college. The second would be to land an internship immediately after graduation and gain practical experience while studying for your first exam. In total, there are seven exams you will need to pass to obtain this certification. Expect to spend several months studying in advance of each exam.
It can take up to seven years to become a fully certified associate actuary. Although it’s a long process, actuaries are well-compensated, and it’s not uncommon for employers to allow actuaries to study for the exams on company time. You can also generally expect your employer to pay for study materials and exam fees, and it’s customary for employers to give bonuses or raises for each exam passed.
In addition to earning your associate certification, both the CAS and the SOA will require you to complete e-learning courses, including seminars that discuss topics such as professionalism in the actuarial field. Once you obtain your certification, you’ll be required to complete continuing education credits periodically in order to renew it.
You can also begin working toward your fellowship certification once you are an associate. In contrast to your first certification, your second won’t take nearly as long. It’s possible to earn a fellowship certification in just two to three years.
Actuaries who are earning a fellowship certification from the CAS do not have specialization options. However, those who belong to the SOA do. For example, you could choose to earn your fellowship certification in one of the following tracks:
- Finance/enterprise risk management
- Life and annuities
- Group and health benefits
- Retirement benefits
Note that if you opt to specialize in pensions, your employer may require you to obtain licensure as well. This is accomplished through the Joint Board for the Enrollment of Actuaries from the U.S. Department of the Treasury and the U.S. Department of Labor. For this licensure, you’ll need to pass two exams through the SOA and meet work experience requirements.
Are There Opportunities for Advancement as an Actuary?
There are definitely opportunities for advancement in this career. When you first begin working as an actuary, you will typically handle basic assignments under the supervision of an experienced actuary. You’ll be able to take on more challenging assignments as you gain experience and pass certification exams.
If you do your job well and you achieve the fellowship certification, you may be promoted to a supervisory position. Here, you’ll likely mentor new actuaries and work with senior management. Some senior actuaries may be promoted to positions in the C-suite, such as chief financial officer or chief risk management officer.
You can begin the process of becoming an actuary by enrolling at Grand Canyon University. We offer many degree options for those interested in becoming an actuary, including the Bachelor of Science in Applied Business Analytics degree, the Bachelor of Science in Accounting program and the Bachelor of Science in Mathematics for Secondary Education degree. All of these programs instill foundational skills in mathematics and nurture analytical reasoning skills.
You can begin exploring the possibilities at GCU by clicking on Request Info at the top of your screen.
*Retrieved from U.S. Bureau of Labor Statistics, Occupational Outlook Handbook, Actuaries in June 2021
The views and opinions expressed in this article are those of the author’s and do not necessarily reflect the official policy or position of Grand Canyon University. Any sources cited were accurate as of the publish date.