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 likelihood of future events, 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 2009:
0 - 1 Years experience: $50,000 (+ $3,000)
1 - 4 Years experience: $60,000 (+ $4,000)
5 - 9 Years experience: $90,000 (+ $10,000)
10 - 19 Years experience: $115,000 (+ $15,000)
Over 20 Years experience: $130,000 (+ $20,000)
For comparison, some equivalent median salary figures for lawyers are $57,000 for less than one years experience, and $65,000 for one to four years 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, and insurance, as well as 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 many 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.
Math Career As Professional Actuary - Summary
Math careers are very diverse, varied and interesting generally, but few are as demanding as the job of 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.
Math Career As Professional Actuary - References
Payscale.com Data on 2009 Actuarial Salaries & Bonuses, accessed 2-April, 2010
Qualification Standards for Actuaries Issuing Statements of Actuarial Opinion in the United States, Actuary.org Accessed 2-April, 2010
Martin Bell - Martin holds a B.Sc. degree in chemical engineering, and an M.Sc. degree in electronics and computing. He has spent more than 25 years ...
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