How to Become an Actuary

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As children, the question we’re most often asked is: ‘What do you want to be when you grow up?’

Prodded by our proud parents and inspired by our own vivid imaginations, the answers we came up with, almost felt automatic: Doctor! Lawyer!Firefighter! But you’ve probably never heard a child say: ‘I want to be an actuary!’ Which is a shame, really, considering it’s one of the highest-paying and top-ranking jobs in the world.

However, if you’re one of the chosen few who’ve stumbled onto this site in the hopes of becoming an actuary, then great! You’re on your way to a fulfilling and lucrative career.

But before you do your victory lap, make sure you’re ready for this career path by reading our comprehensive guide below.

1. Research the Profession

There’s a reason why actuaries are paid more than most. The job requires a highly technical skill set that only a few possess, and before you achieve fellowship status (or what’s considered to be the highest level for professional actuaries), you have to pass rigorous examinations which can take 6 to 10 years to complete.

Read on to know more about what it takes to be in this profession and what you can do to excel in this field.

Job Description

If you’ve seen the film Fight Club, then you already have a vague idea on what actuaries do (don’t worry; we won’t spoil it for you). In the movie, Edward Norton plays the role of the Narrator whose job is to assess the risk associated with car accidents for an insurance company.

That’s essentially what actuaries do; they evaluate risks and its potential financial consequences by using statistical techniques and mathematical theories. Some of their other duties include:

  • analysing statistical data to determine potential risks
  • preparing presentations and reports for clients
  • liaising with managers, financial analysts and stakeholders to set prices; forecasting demand or advising them on next steps
  • keeping abreast with the latest financial developments to properly advise clients.

Most actuaries work for insurance companies where they help develop policies that minimise costs due to potential risks. These jobs include:

  • life insurance actuaries who help create policies and determine payments for individuals based on risk factors, including life expectancy rate, age, race and gender
  • healthcare actuaries who are responsible for creating long-term healthcare plans by assessing the potential risks of policyholders based on their family history, medical background and other factors
  • pension and retirement benefits actuaries who test and develop company pension plans to ensure that companies are compliant to the law and that expected contributions are able to cover and safeguard future payments and benefits for retirees
  • property actuaries who assist policyholders by developing insurance policies that protect against property loss due to acts of God or accidents caused by nature such as hurricanes, floods, hail, earthquakes and tsunamis.

Essential Skills and Qualities

Due to the technical nature of their profession, actuaries share specific characteristics that make them highly suitable for the job. Potential candidates possess the following:

  • a passion for numbers and finance in general
  • self-motivation and discipline
  • an ability to work well with others
  • an in-depth mathematical knowledge specialising in statistics and probability
  • an ability to multitask and work under pressure
  • a profound understanding of economics
  • excellent organisational skills and a keen attention to details
  • strong business acumen
  • excellent written and communication skills
  • strong analytical and problem-solving skills.

Working Hours and Conditions

Most actuaries work normal hours, clocking in an average of 40 hours a week and typically within an office setting. Work-life balance isn’t a concern since their job only requires them to come in for a certain amount of time. However, those who work as consultants have more unpredictable schedules as they’re frequently required to travel to meet with clients.

Salary Prospects

Are you rubbing your palms together? If you aren’t, then you should because after all that hard work, here comes the rewarding part.

In the UK, actuaries earn an average salary of between £30,000 and £70,000 per year. In the US, meanwhile they typically earn as much as $101,560.

That’s way above minimum wage, which explains why actuaries are constantly within the top 20 high-paying jobs in the world. And since many companies aren’t too keen on taking uncalculated risks, it’s one of the most in-demand and secure jobs as well.

2. Get the Qualifications

If we haven’t stressed it enough already, becoming an actuary has its own sets of challenges.

Apart from having a strong background in mathematics and an innate passion for numbers, most companies also prefer to hire those who hold a degree in actuary science, economics or any similar numerate subject. Candidates who have completed coursework in accounting or management are also considered a notch above the rest. But if you really want to stand out, then you may want to take additional courses in computer science to help sharpen your statistics and programming skills.

The path to becoming an actuary varies depending on where you’re from. In the UK, for instance, candidates must have an impressive academic record, including a grade B in maths at A Level. Students can also become associate members at the Institute and Faculty of Actuaries (IFoA) by going through the prerequisite exams and completing one year of work-based training.

However, if you’re didn’t go to college or university but have a natural knack for numbers, you can still become an actuary by taking the CT1 or Certified Actuarial Analyst (CAA) exam with the IFoA and completing the modules. More experienced actuaries can also become associate fellows of the IFoA, provided they have completed three years of work-based training.

To become a professional actuary in the US, the process is quite different. You will be required a somewhat similar background in mathematics, but before you can choose an actuarial speciality, you must first gain intern experience. Depending on the speciality or track you take, there are usually two professional societies that grant professional status; these are the Casualty Actuarial Society (CAS) and the Society of Actuaries (SOA). Like the IFoA, both societies also provide associate and fellow memberships.

3. Land Your First Job

Provided you’re able to impress your employer by consistently performing well, there’s a chance you’ll get hired right after an internship. You’re also likely to start out as a trainee or an actuarial assistant, wherein you’ll be grouped with more experienced actuaries. Your job will mostly consist of compiling data, conducting research and writing reports, after which you can move your way up by gaining more experience and passing more exams.

4. Develop Your Career

To reach fellowship status, you’ll be required to pass numerous exams that are taken over a 10-year period, which is why being an actuary is one of the most secure jobs that are both financially and professionally rewarding.

However, there are other ways to develop your career that don’t involve taking another math-related course. Even the most learned actuaries can gain from attending a public speaking workshop or a communication skills class since both are essential when it comes to excelling in this profession.

Becoming an actuary is a long and arduous process, but the benefits you’ll reap at the end of the road are definitely worth the many sacrifices you make.

Was it your childhood dream to become an actuary? How did you find out about the profession? Let us know in the comments section below.