What is an Actuary?

An actuary helps a company plan for the future and protect itself from possible losses. Due to the critical role they play within a company, actuaries enjoy a lot of respect and earn some of the most lucrative salaries. This post will provide an overview of the key responsibilities of actuaries, salary and job requirements.

Key Responsibilities of Actuaries

There are a variety of roles actuaries perform on a daily basis. These roles include:

  • Review documents relating to statistical information, insurance plans, pension plans and company policies.
  • Create guidelines for which the company can follow.
  • Examine the company’s processes and procedures to determine risks.
  • Develop risk management strategies.
  • Make recommendations on how the company can improve its processes and minimize losses.
  • Participate in strategic planning.
  • Recommend pricing of the company’s products.

Becoming an Actuary

Those who want to specialize as actuaries should have at least a graduate degree from an institution recognized by the Society of Actuaries. Many universities offer programs that combine topics in business, mathematics and statistics. One does not have to be a major in actuarial science to be considered qualified for a job in this field. Any other degree can do, as long as it features courses that expose students to areas such as probability, finance, management, computer science, calculus and statistics.

Apart from obtaining the right academic credentials, candidates must be Associates or Fellows of one of the professional bodies that manage actuaries. The largest and the most recognized professional body is the Society of Actuaries. The body admits actuaries who work in health and life insurance, pensions and employee benefits. Another body that has also proved to be helpful is Casualty Actuarial Society. In order to obtain an Associate or Fellow credential, candidates must pass the examinations administered by these bodies.

Essential Skills for Actuaries

One of the most important attributes actuaries need to succeed in their career is analytical problem-solving skills. They need to think critically when analyzing risks and opportunities and find effective solutions to any problems the company might be facing. Because they deal with numbers, actuaries need numeracy and math skills. They must be able to apply the knowledge of calculus, statistics and probability to solve problems that require arithmetic input.

Actuaries must also have strong computer skills to be able to use a variety of software to create models and make presentations. Other essential skills include knowledge of business and finance, ability to communicate well and outstanding interpersonal skills.

Salary and Career Outlook

Actuaries are among the highest paid professionals in the US. According to the Bureau of Labor Statistics, they make $100,610 per year on average. The pay scale depends on location, level of experience and employer. Those who are experienced and work for multi-national companies earn up to $240,000.

In addition to lucrative salaries, actuaries enjoy good job prospects. The demand for new actuaries is projected to increase by 22 percent in the next one decade, 10 percent higher than the the national average rate. Actuaries will be needed to develop, evaluate and price a variety of products and assess risks.

Related Resource: What is a Treasury Analyst?

Actuaries have many roles and responsibilities. They work in almost any industry to analyze risks and participate in strategic planning. If you are the type of person who can work with numbers, think critically and solve problems, then a career as an actuary might be the right option for you.