Actuaries are employed by pension, investment, insurance companies, and others to evaluate and assess risk, with a view to solving financial business problems. They are highly trained statisticians with a high level of knowledge of finance. Many are graduates in mathematics.
What Is An Actuary?
Actuaries gather financial data and analyze them using very complex mathematics and statistics. They provide real answers to business problems, by estimating the events’ likelihood and evaluating the financial consequences of these risks. For example, actuaries working in a pension company could study data on longevity, health trends, and stock markets, to assess how pension plans should be priced.
Actuarial Salaries
Math careers are often well rewarded, but math graduates who land actuary jobs are amongst the best paid. The following median salaries (+bonus) are taken from Payscale.com for actuaries in 2024:
0 – 1 Years experience: $66,000 (+ $3,000)
1 – 4 Years experience: $89,000 (+ $4,000)
5 – 9 Years experience: $119,000 (+ $10,000)
10 – 19 Years experience: $140,000 (+ $15,000)
Over 20 Years of experience: $162,000 (+ $20,000)
For comparison, some equivalent median salary figures for lawyers are $57,000 for less than one year of experience and $65,000 for one to four years of experience. Although legal salaries are slightly higher than those for actuaries, the bonus figures are higher by up to $10,000 per year for actuaries as more experience is gained. Overall, the package for actuaries and lawyers is comparable.
What Type of Person Becomes an Actuary?
Math careers can lead to the actuarial profession, because of the type of work involved. Actuaries need a solid knowledge of their particular area of work, such as pension, investments, insurance, and competence in the complex methods used to analyze the data they are using. An actuary, therefore, needs to know how financial models work, and then be able to assess risks. This combination of required competencies means that graduates in mathematics, computing, statistics, economics, and accounting often become actuaries.
Which Companies Employ Actuaries?
Actuaries are often employed by pension, investment, and insurance companies (both general insurance and life insurance), although much more work for consultancies. Actuarial consultancies offer advice on everything from company acquisitions and mergers to raising capital. Actuaries are usually selected from the most capable graduates.
How Does A Person Become an Actuary?
Competition for actuarial careers is very high, and all recruits must gain experience as well as pass some extremely difficult professional examinations. Professional qualification generally takes at least three years of full-time practice. Some actuarial associations allow exemptions from some of the professional examinations where the candidate has achieved sufficiently high grades in a degree that involves a high degree of numeracy such as statistics, math, economics, etc.
How to Manage the Actuarial Studies
Actuarial exams are taken twice a year, usually around April and September. Most actuaries qualify in 5 years, but there are great variations to this number. A usual combination of exams is to sit at least three exams in April and two in September.
To work full-time as an actuarial student and study for the exams requires a lot of determination and self-discipline. The importance is to always be one step ahead of schedule in case something comes up at work that needs to be attended to immediately. All students will have to study for a few hours a day and it is a good idea to plan this work in detail.
If you start work at 10 am, it is possible to study for at least three hours every morning if the commute to work is not too long. Instead of deciding to “Study Chapter 13 on Thursday morning,” make sure you learn Chapter 13, as there might not be a lot of time to go back and revise it.
If you are catching the train or bus to work, bring the morning’s study notes with you and revise them on the way to work. To be well prepared for the exams, make sure that all revision is done a few weeks before the exams so that you have time to go through past exam papers and focus on areas you are not confident in.
How to Manage the Actuarial Work
Unless you are very tired in the mornings, it is best to focus on your studies then and go to work afterward. This will enable you to stay at work in case there are deadlines to be met that day. If you decide to study in the afternoons, you might have to leave the work half done or skip the actuarial studies that day. If you leave the work half done, your manager will probably not be that impressed.
Ask your manager if you can get a day off every two weeks. Some companies will give you paid study leave, but you could make up the time yourself if this is not the case. You would need to work less than one hour extra every day to be able to take one day off every two weeks. During this day, it is important that you go over your studies, revise and perhaps arrange to study with some other students so that you can help each other out.
How to Manage Life Outside of Work and Studies
There is no getting away from the fact that actuarial students are very busy people. However, if you plan your work and studies well, there is no reason that you will not be able to go and enjoy yourself now and then. Try to plan “Time Off” into your study schedule as it is important to get some time to yourself. The rewards of being a qualified actuary are great, so the faster you pass your exams, the faster the rewards will come.
Math Career As Professional Actuary – Summary
Math careers are very diverse, varied, and interesting generally, but few are as demanding as the job of a professional actuary. It takes a long time to achieve professional status, even for the elite few selected, but the rewards – financial and intellectual – are great too. This is reflected in job surveys, that rank actuary as the best job.
