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How to Become an Actuary: Degree Requirements & Certification Exams

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So, what exactly is an actuary, and what do they do? For some people, the title of “actuary” might conjure up an image of someone hunched over a computer, plugging numbers into a spreadsheet all day. In today’s business world, however, that is far from the truth. Actuaries find themselves working as analytical problem solvers, developing creative business solutions, and communicating their ideas to a wide variety of audiences. They serve as a dynamic and integral part of their organizations.

If you have solid math and technology skills and love the challenge of finding answers to complex problems, an actuarial career might just be the perfect match for you. With excellent pay, ample job opportunities, and paid study time while you work towards certification, you have found a hidden gem of a career.

The road to becoming an actuary has a number of steps and requires a lot of hard work and studying to make it, but once you do, you are pretty well assured of having employability in this growing field. Investing in the education and training to become an actuary can be your secret weapon to a long, successful, and satisfying career. Find out why the actuarial profession consistently ranks as one of the most desired careers year after year.

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Quick Facts About Becoming an Actuary

What is an Actuary?

Actuaries analyze numbers and statistics to assess risk. They are the professionals responsible for setting your insurance rates, ensuring your retirement plan meets your financial needs, and much more. They use tools to help companies determine potential liabilities and decrease the negative effects from possible future events. Actuaries help businesses plan for the future and insulate them from losses. Their work is essential in the insurance industry, where they help design policies and determine premiums that are profitable yet competitive.

Why Become an Actuary?

From 2019 to 2029, the actuary field is expected to grow by 18%, a pace much faster than the overall job market according to the US Bureau of Labor Statistics. With a current median salary of $111,030 per year, the actuarial profession outperforms other mathematical science occupations and provides an income nearly three times the average American job. High demand combined with high salary offers you the prospect of a secure and prosperous career.

Actuaries can often anticipate a full-time yet flexible schedule for a quality work-life balance and enjoy comfortable working conditions in an office environment. In addition to these features, Forbes magazine has named it one of the best professions for women, and it is considered one of the best industries in an economic downturn according to “150 Best Recession-Proof Jobs” by career expert Laurence Shatkin.

How to Become an Actuary

While an actuarial career can start with a bachelor’s degree in any subject, most actuaries choose a major in mathematics, actuarial science, statistics, or another analytical field. Coursework in economics, statistics, and corporate finance is key to achieving professional certification. Outside of math and business, you should also consider classes that develop your skills with computer science and programming languages, as well as professional communication skills.

Professional Actuary Certification

Certification exams are conducted by two organizations in the United States and Canada, the Society of Actuaries (SOA) and the Casualty Actuarial Society (CAS). SOA certifies professionals working in the fields of life insurance, health insurance, retirement benefits, investments, and finance. CAS focuses on certifications for the property and casualty field.

Employers generally expect entry-level actuaries to have completed one or two certification exams by the time they graduate college. A total of seven examinations is required for associate-level certification. This process typically takes between four and seven years, as each test requires mandatory e-learning courses, hundreds of hours of study, and months of preparation.

After becoming an associate, you can complete three more exams to earn full fellowship status. Working professionals can generally achieve this goal in an additional two to three years. Actuaries participate in continuing education to maintain their certification status, with seminars often sponsored by their employers or the professional societies.

Starting Your Actuary Career

With a number of different areas of specialty — health, life, pension, casualty, and more — internship experiences can help you determine the track you would like to pursue. You may land a job with an insurance company, consulting firm, government entity, employee benefits department, hospital, bank, or insurance firm; really, any business that needs experts to manage financial risk.

Once you begin your professional career, you will likely start as a trainee on a team with more experienced actuaries. While you may start off with basic tasks, your job role will expand as you gain experience and pass additional certification exams.

Most employers offer support as you seek certification. Typically, your company will cover the cost of your study materials and exams. Many employers also offer paid time to study, and your co-workers may set up study groups. With each certification you achieve, you can expect to see your success materialize in the form of a bonus, raise, or promotion.

Technology and the Future of Actuarial Careers

Technology is changing the work in many industries, and the actuarial field is one of those most influenced. Some of the most highly sought after skills today include knowledge of various software and programming languages. Employers seek out actuaries who can expertly navigate technology including:

  • Analytical and scientific software, such as IBM SPSS Statistics and SAS
  • Database user interface and query software, such as data entry software, Microsoft SQL Server, Oracle software, and SQL
  • Financial analysis software, such as GGY AXIS and Oak Mountain Software AnnuityValue
  • Object or component oriented development software, such as C++, Oracle Java, Python, and R
  • Presentation software, such as Microsoft PowerPoint

Why Become an Actuary?

Job Prospects for Actuaries

If you are thinking about becoming an actuary, it’s unlikely you’ll find anyone who will discourage you from going down the actuary career path. Actuary jobs made the list of 100 Best Jobs by US News & World Report in 2021, not to mention ranking #16 in Best Business Jobs, #23 in Best Paying Jobs, and #25 in Best STEM Jobs.

The US Department of Labor predicts an 18% growth rate in actuary jobs from 2019 to 2029, a rate much faster than the average career. Actuarial careers consistently rank as one of the best jobs in our economy, and this is likely to increase as we come to rely on data in more and more industries. According to Department of Labor statistics, actuaries in 2019 found themselves working in the following fields:

  • 71% in finance and insurance
  • 13% in professional, scientific, and technical services
  • 6% in management of companies and enterprises
  • 4% in self-employment
  • 3% in government

The insurance industry will fuel the majority of job growth over the next decade. Health insurance in particular is expected to see high levels of job growth as actuaries are needed to evaluate the effects of changing healthcare regulations. Additionally, more actuaries are expected to work in enterprise risk management, helping individual companies manage their own risk.

Actuary Salary

This is one field in which employees will rarely lament about low paying jobs. According to Salary.com, entry level actuary jobs offer an average of $72,700 and increase significantly as you gain experience and complete certifications.

By the time you complete your certifications and become an associate or fellow, you could be making over $100,000 a year. For example, the median salary for actuarial analysts is $113,300, with average employees earning between $98,200 and $126,900.

The high salary range and growing opportunities promise a bright future to potential actuaries. For those who reach the highest status, top actuarial executives, Salary.com data puts the average compensation including bonuses at more than $475,000, with the top 10% earning over $740,000. These numbers make it seem much more attractive to put in the hard work to excel in an actuarial career.

What is an Actuary?

BeAnActuary.com describes the actuary professional as “part superhero, part fortune-teller, part trusted advisor”. With the power of math, technology, and strong analytical skills, actuaries can help businesses plan for the future and protect against financial loss, as well as help individuals save for retirement and enjoy financial security through their investments.

In a nutshell, the job of an actuary is to manage risk. The future is volatile and full of risks and uncertainties, but if you can manage risk well, you can profit from future events. Therefore, risk also represents opportunities, and an actuary must identify these.

What might you do as an actuary?

  • Determine the amount a company charges for auto insurance, considering factors regarding the automobile and driver
  • Create life insurance products that give parents peace of mind that if something happened to them, their children would be taken care of
  • Help companies establish retirement plans for their employees
  • Assist banks with managing their assets and liabilities, in order to provide the best returns

Finding efficient methods to manage risk is a critical part of management decisions, and the actuary profession leads the field in this area of expertise. An actuary needs a combination of abilities, including refined business knowledge, sharp analytical skills, and insights into human behavior to manage the complex risks industries are continuously facing.

How Does an Actuary Assess Risk?

Assessing future risks is more easily said than done. Actuaries gather data and then run complex calculations to estimate the probability and likely cost of events, such as death, illness, injury, disability, or loss of property. Then, they create policies that reduce the cost of that risk.

For this reason, actuaries are essential to the insurance industry. Actuaries help design insurance policies, pension plans, and other financial strategies. Specifically, they investigate financial questions like the level of pension contributions required to allow for a comfortable retirement. Actuaries also recommend investment strategies an organization or pension fund should undertake in order to maximize the return on investments using their broad knowledge of statistics, finance, and business.

How to Become an Actuary

Like any other professional career, you need an education to get there, but employers typically care more about your industry certifications than your specific field of study.

To become an actuary, the most common path is to:

1.  Earn an Undergraduate Degree

The most direct educational path is an undergraduate actuarial science degree. Another common approach is to complete a bachelor’s degree in finance, economics, or commerce. Prospective actuaries can also choose seemingly unrelated majors like engineering or art, as employers put more emphasis on completed certification exams.

2.  Complete Additional Courses (If Necessary)

Students completing a degree in an unrelated field may need to complement their undergraduate studies with courses in economics, statistics, and corporate finance. Prospective actuaries will benefit from learning key technologies used in the field, such as programming languages, computer science, and the use of spreadsheets, databases, and statistical analysis tools.

3.  Apply To a Professional Body & Pass Certification Exams

As soon as you begin the senior year of your undergraduate degree, you can apply for membership in a professional actuarial body. You can then start your certification process by taking their courses and passing exams. Most employers expect you to have passed at least one or two of these exams by the time you graduate and start looking for a job.

Actuary Education Requirements

College Degree Options

Actuaries need a strong background in mathematics and general business. Usually, actuaries earn an undergraduate degree in math or statistics. It is also common to major in a business-related field, such as finance, economics or business.

While certain skills are important, actuaries come from a variety of educational backgrounds, and many have degrees in operations research, physics, engineering, and even fine arts. Your college major is not as important as the ability to pass actuarial exams. Students should, however, take courses in economics, applied statistics and corporate finance, which are requirements for professional certification. If you are unsure about becoming an actuary, a more general business degree may be your best path.

On the other hand, if you know an actuary job is your goal, you can select a more direct path. Options abound — nearly 300 colleges and universities around the world offer an actuarial science major focusing on mathematics, probability, economics, business, and other related areas necessary for success in the actuarial profession and specifically prepare you for the first certification exams.

As stated above though, there are many different actuary education paths. Don’t be afraid to do things a little differently as it allows you to bring a unique perspective to the field, enhancing your career prospects. While many actuaries focus on specific types of insurance coverage, such as life, health, property, and casualty, actuaries can fulfill roles in any industry that involves risk modeling and management, such as:

  • Financial services – banking and investment management
  • Transportation – shipping and air travel
  • Energy – utilities, oil, and gas
  • Environment – climate change
  • Government – Social Security, Department of Labor, and Medicare

Internships

While you are studying, you can also attend job fairs, speak to the career center at your school, and apply for an internship. Most students complete an actuarial internship during or after their education. Internships in underwriting, data analysis, investments, and risk management are great choices, as are any type of position in the insurance field. Internships provide valuable experience and help an aspiring actuary’s resume, but they are also a great way to test the waters and see what direction you would like to take your actuarial career. An actuary internship will substantially increase your chances of landing higher-paying employment upon completion of your undergraduate degree.

Computer Skills

Actuary science requires a lot of computing of formulas, and you’ll need the assistance of powerful software to complete your tasks. Technology, therefore, plays a critical role in the profession. Above-average skills of simple software, like Excel and Access, will increase your marketability. Actuaries use Excel regularly, so learning how to use advanced features like conditional formatting, power query, formulas, pivot tables, and simulations will be useful throughout your career.

SQL is almost indispensable in the industry, with multiple companies requiring knowledge of the language before considering a candidate. Additional programming languages including C++, Oracle Java, Python, and R are also becoming highly sought after by employers.

Strong computer skills will definitely place you in the upper echelon of candidates and ensure you enjoy success in the field. As big data becomes more embedded in the industry, computer programming and data analysis skills will continue to rise in importance.

For Career Changers

Deciding to plunge into a different career path can be daunting, especially with the time commitment—four to seven years–required to end up as a certified actuary. But if you have the math skills and the drive to work hard, this can be a very rewarding career, both financially and in job satisfaction.

Remember that you can often find an entry-level job after passing just two of the initial exams, and then, if you work hard, you can continue your path to certification while working and even getting paid to continue your studying. Your experience in other careers may help you in the business aspects of working as an actuary, but the real skills you will develop along the path are very specific to the job.

Mathematical aptitude and hard work are the qualities that will get you all the way to certification. Be prepared to learn from your colleagues as you gain experience and rise through the ranks of your actuary career.

Professional Actuary Certification

Exam Options

Some universities offer an actuarial science degree, and while the coursework can help prepare you for professional exams, the degree alone is not enough to get your foot in the door of the actuarial profession.

Potential employers will be looking for you to complete a set of exams with one of two professional bodies, the Society of Actuaries (SOA) or the Casualty Actuarial Society (CAS). These societies administer a series of six actuarial science exams that typically take four to six years to complete for associate status, and a series of three exams that take another two to three years to achieve fellowship level. Exams cover a variety of topics relevant to the profession, including probability, interest theory, risk management, life contingencies, and specific insurance topics.

The SOA certifies actuaries in the fields of life insurance, health benefits systems, retirement systems, and finance and investment. The CAS covers the property and casualty field — auto, homeowners, medical malpractice, workers compensation, and personal injury liability.

Timeline for Certification

Students need between six and nine years before they can become fully certified at the fellowship level. If you take your first exam and fail, don’t give up. Course material is extremely complex, and typically only 40% to 50% of students pass each time, according to Actuarial-lookup.com. Exams can be retaken as often as every two months.

In addition to passing the seven exams, there are Validation by Educational Experience (VEE) courses in economics, accounting and finance, and mathematical statistics that are required to become an associate level actuary. These courses can be taken once you have passed your first two exams, and you can take these courses online.

Actuarial science exams are difficult tests, and the general study standard says you need to study 100 hours for each hour of exam time. For instance, if you have a three-hour test, you should schedule 300 hours of study time to master all the concepts and give you the best chance at successfully passing the exam.

Setting Expectations

These are strikingly challenging exams, but knowing the statistics on passing can help exam-takers to set reasonable expectations for themselves. Chances are most if not all of your actuarial co-workers have failed at least one exam. Plus, since it is industry practice for those employed in the field to have study time paid by their employers, even a failed exam can be seen as just part of the process.

Keep in mind it’s rare for anyone to successfully complete all their actuary exams on the first attempt, so a couple of failing grades will not harm your job prospects. Exams are graded on a scale of 0-10, with anything six or higher being a passing grade. Beyond pass or fail, employers really don’t care what you score, so don’t beat yourself up striving for perfection. There’s no need to try for a higher score if you pass with a six; just celebrate the fact that you passed!

The Actuarial Career

Standard Path

Most often, you will complete an undergraduate degree and start your actuary certification process with one of the two professional bodies in the United States, SOA or CAS. However, you don’t have to complete your undergrad before starting the certification exams, and it’s actually recommended that you start studying and pass at least one or two exams while you’re still in school.

Passing the first two preliminary exams will demonstrate your aptitude for the type of math and other skills required on the job and show recruiters you are serious about your commitment to the industry.

Employers look for potential actuaries with at least one passed exam, and many seek out job candidates who have passed at least two exams. They then are likely to train you on the job, provide paid study time, set up employee study groups, and pay for your remaining exams. It is standard industry practice for insurance companies and consulting firms to provide such incentives, along with bonuses and raises for each passed exam.

Alternative Options

After you have passed the first couple of exams, you will be able to land a job as an actuarial analyst. Even if you have a hard time with the rest of the exams, you do have the option to stop here and continue your career as an analyst or an actuarial consultant for which you will still be well compensated.

Also, if you’ve followed the traditional path and choose to stop after a couple of exams, you will have a number of business and finance skills which will allow you to successfully switch careers. Jobs in finance, as a business analyst, or in project management are all great related career choices.

Looking Ahead

An actuary’s work is greatly affected by government rules and regulations. An actuary has to continuously stay on top of these changes and adapt strategy to minimize risk for their employer. The challenges faced by actuaries today are quite different than they were five years ago and will be considerably different five years from now.

Although actuaries deal mostly with financial risk, these risks are impacted by a huge variety of variables. In the interconnected world we live in today, a burst pipeline in Russia or slowing economic data out of Asian countries will affect markets in the US. Actuaries have to deal with a fast-paced environment which is shifting continuously, and they are expected to take all these variables into consideration before making their recommendations. Tough job? Yes, definitely, but it is the challenge that actuaries most enjoy!

Technological Advances

According to KPMG, a multinational network of professional firms providing audit, tax, and advisory services, innovations in technology continue to shape and redefine the actuary field. Actuaries increasingly need to be comfortable working with advanced analytics software and big data in order to remain competitive in the job market and take advantage of emerging opportunities both outside and inside of the insurance industry.

To make the most of your career, don’t wait for your employer to mandate certain technologies or training. Take initiative and look toward the future. Finding opportunities to advance your skills and learn new methods and technologies will serve you well. Innovation, technological know-how, and inventive thinking will be key to a successful actuarial career in the years to come.

The Role of Big Data

Currently, actuary jobs are in a state of flux because big data is affecting the information available to inform decisions. Some view actuaries as the original data scientists, while others argue that machine learning, big data, and AI are challenges to the profession. Many actuary professionals today are taking advantage of data science techniques to enhance their current work and even expand into new fields. Actuaries will have a much better chance of advancing in their career if they share in the data revolution and embrace new technologies as they emerge. Lifelong learning is most definitely a requirement of this career field.

The availability of large data sets and the software tools to analyze them are changing the insurance and pension industries very quickly. InsurTech, the digital tools that continue to advance the science of data handling and analytics, has led to new products, new distribution channels, and new risks for companies. However, this advanced technology is also allowing the industry to use more advanced algorithms than ever before, requiring well-trained, professional actuaries to not only understand, but apply ethical principles to the methods and models being used to create the products and services that are the underpinnings of our society.

Non-Traditional Job Opportunities

In a job field dominated by the insurance industry, actuaries are starting to see increasing job opportunities in a wider range of business settings. The key skills and insights that actuaries bring to the table are in high demand in areas such as data mining, health financing, wealth management, banking, and technology.

Take for example the needs of a company producing self-driving cars. While the focus used to be purely on the technological challenges of creating this modern achievement, now that AI-controlled vehicles have been tested and proven, the concerns turn to risk and liability. Actuaries offer the perfect skill set in analysis and risk management for companies focused on emerging technology.

Even within the insurance industry, actuaries are increasingly working in non-traditional job roles and areas of the business. You might find yourself analyzing the most effective sales techniques in a geographic region or compiling big data from telematics devices monitoring customers’ driving habits. Actuaries are able to apply predictive analytics to marketing, customer engagement, underwriting, product development, claims processing, decision-making, and analyzing customer behavior.

While the actuarial profession may be one of the least-understood careers by the general public, actuaries have a profound impact on all of our daily lives. As our world becomes more complex with the advent of new technologies, actuaries will work to keep the world as safe from risk as possible. For those who go the distance and put in all the time and hard work, a career as an actuary can provide a high standard of living, a good work-life balance, and the satisfaction of serving an important function in our society.

Start Today!

If you want a career with stability, great pay, and ample opportunities for advancement, becoming an actuary is a perfect choice.

So, in summary, what can you expect to do in an actuarial career?

  • Calculate risk
  • Protect against financial loss
  • Help businesses plan for the future
  • Ensure financial security for retirees
  • Determine insurance premiums
  • Help banks manage their assets and liabilities
  • Be a trusted advisor to both businesses and individuals

Use our extensive database of online programs to find the perfect bachelor’s degree to start your path toward an actuarial career today!

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