A career in actuarial science is one that only a relatively few people can take on, making it one of the most in-demand occupations in modern business. With a master’s in actuarial science, there’s a whole world of career opportunity.
What is an Actuary?
The question of “what is an actuary?” is a good one to ask. It’s one of those roles that underpins all insurance policies written in the United States, but isn’t very well known outside of the insurance industry. The definition of actuary is straightforward; it’s someone who manages risk. The concept of risk is a nebulous one and defining the odds within defined parameters is challenging. When taking a look at what is an actuary, it’s clear that the definition of actuary is someone who predicts the future through the use of mathematical formulas.
A majority of actuary jobs are found in the insurance industry, but actuaries also work for large corporations that need to evaluate risk prior to making a decision. It’s the job of the actuary to evaluate the risk, apply mathematical models to the known risk, uncover risks not previously seen, and turn that information into a body of work that gives a green light to the decision makers. The actuary uses calculus, computer sciences, applies economic theories and uses mathematical statistics to determine the most likely outcome of an event.
Insurers use actuaries to predict events such as accidents and their outcomes, the likelihood of the passing of policyholders with certain risk factors, and the potential payout demand for insurance policies of all types. They are valuable assets for project managers, public policy makers, and emergency management professionals.
What Kind of Jobs For Actuaries are Available?
Actuaries are in demand in a variety of industries. Insurance companies are the largest employers of actuaries, but other industries such as the U.S. government, financial companies, pension funds, and enterprise risk management also employ actuaries. Jobs for actuaries are plentiful and someone with an undergraduate degree can find employment in an area that interests and challenges them. So, what does an actuary do? The actual work depends on where the actuary is employed, but the skills the actuary learned in school are used as a framework to apply to different variables. Here’s a look at what do actuaries do and the various careers as an actuary someone can enter.
Insurance industry
Insurers use actuaries to predict events such as accidents and their outcomes, the likelihood of the passing of policyholders with certain risk factors, and the potential payout demand for insurance policies of all types. An actuaries career with an insurance company consists of taking a large amount of data, pooling it into categories, then calculating the risk of certain outcomes so insurers can set policy prices and keep on top of policy payouts.
Retirement, pensions and savings
Also known as a savings and retirement actuary (S&R), the actuary job description for S&R is one of helping people prepare financially for retirement. They also work for corporations who maintain a pension plan for employees. The S&R actuary looks at the financial needs of the average retiree and determines how much they’ll need to fund their retirement. For corporations with a pension plan, the S&R actuary figures out how much money the corporation will need to keep in the pension plan in order to keep retirees paid.
Enterprise risk management
This is the newest job in actuarial science jobs due to the recent trend of private enterprises turning to actuaries for risk management. An enterprise risk management actuary works on potential scenarios and their overall effect on the enterprise. Corporations are seeking ERM actuaries to determine the outcome of potential actions the corporation may take. For example: a large corporation is thinking of donating a large amount of money to a social cause. The corporation wants to know if the donation is a positive risk or an adverse one when it comes to public perception and future investment in the company. An actuary can determine the net outcome.
What’s the Actuary Jobs Outlook Like?
The job outlook for actuaries is very good. The Bureau of Labor Statistics expects the field to grow by 18% between 2019 and 2029. Part of the actuary jobs outlook is due to the fact the demand for actuaries is high, but the amount of qualified individuals is low. It’s a good time for students to start learning how to become an actuary and enter into an interesting and challenging career. Employers recognize the value of an actuary and are willing to compensate accordingly.
The role of an actuary is one that will never be fully replaced by computer programs. Computers lack human nuance and understanding of how the human mind and body work. That means a computer program won’t be able to have the same accuracy as a human actuary. The computer program is more likely to generate mistakes and cost an organization more than the human actuary. Someone with the aptitude for the work of an actuary will find themselves gainfully employed throughout their working life.
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