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10 Facts About Actuaries, What They Do

Actuaries analyze the financial costs of risk and uncertainty. They use mathematics, statistics, and financial theory to assess the risk of potential events, and they help businesses and clients develop policies that minimize the cost of that risk. Actuaries’ work is essential to the insurance industry.

Actuary Summary

Work Environment

Most actuaries work for insurance companies. Although most work full time in an office setting, some actuaries who work as consultants may travel to meet with clients.

How to Become an Actuary

Actuaries need a bachelor’s degree and must pass a series of exams to become certified professionals. They must have a strong background in mathematics, statistics, and business.

Pay

The median annual wage for actuaries was $108,350 in May 2019.

Job Outlook

Employment of actuaries is projected to grow 18 percent from 2019 to 2029, much faster than the average for all occupations. Actuaries will be needed to develop, price, and evaluate a variety of insurance products and calculate the costs of new, emerging risks.

10 Facts About Actuaries

1. Actuaries Are Statistical Superstars

An actuary compiles statistical data and other information for further analysis. They estimate the probability and likely economic cost of an event such as death, sickness, an accident, or a natural disaster

2. They Minimize Risk and Maximize Profitability

These financial professionals design, test, and administer insurance policies, investments, pension plans, and other business strategies to minimize risk and maximize profitability. They produce charts, tables, and reports that explain calculations and proposals.

3. Actuaries Speak Many Languages.

Although math and data is their first language, it’s not the only one that actuaries speak. They have to be able to explain their findings and proposals to company executives, government officials, shareholders, and clients. That means they have to know plain language.

Actuaries also have to speak tech. Most actuarial work is done with computers. Actuaries use database software to compile information. They use advanced statistics and modeling software to forecast the probability of an event occurring, the potential costs of the event if it does occur, and whether the insurance company has enough money to pay future claims.

See Our Affirmations for Actuaries

4. Actuaries Know That Teams Make the Dream at Work

Actuaries typically work on teams that often include managers and professionals in other fields, such as accounting, underwriting, and finance. For example, some actuaries work with accountants and financial analysts to set the price for security offerings or with market research analysts to forecast demand for new products.

5. Most Actuaries Work in the Insurance Industry.

Most actuaries work at insurance companies, where they help design policies and determine the premiums that should be charged for each policy. They must ensure that the premiums are profitable yet competitive with other insurance companies.

Health insurance actuaries help develop long-term care and health insurance policies by predicting expected costs of providing care under the terms of an insurance contract. Their predictions are based on numerous factors, including family history, geographic location, and occupation.

Life insurance actuaries help develop annuity and life insurance policies for individuals and groups by estimating, on the basis of risk factors such as age, gender, and tobacco use, how long someone is expected to live.

Property and casualty insurance actuaries help develop insurance policies that insure policyholders against property loss and liability resulting from accidents, natural disasters, fires, and other events. They calculate the expected number of claims resulting from automobile accidents, which varies with the insured person’s age, sex, driving history, type of car, and other factors.

6. They Also Work in Pension Plans and Enterprise Risk

Some actuaries apply their expertise to financial matters outside of the insurance industry. For example, they develop investment strategies that manage risks and maximize returns for companies or individuals.

Pension and retirement benefits actuaries design, test, and evaluate company pension plans to determine if the expected funds available in the future will be enough to ensure payment of future benefits. They must report the results of their evaluations to the federal government. Pension actuaries also help businesses develop other types of retirement plans, such as 401(k)s and healthcare plans for retirees. In addition, they provide retirement planning advice to individuals.

Enterprise risk actuaries identify any risks, including economic, financial, and geopolitical risks that may affect a company’s short-term or long-term objectives. They help top executives determine how much risk the business is willing to take, and they develop strategies to respond to these issues.

7. Actuaries Work in the Public Sector

Actuaries also work in the public sector. In the federal government, actuaries may evaluate proposed changes to Social Security or Medicare or conduct economic and demographic studies to project future benefit obligations. At the state level, actuaries may examine and regulate the rates charged by insurance companies.

Some actuaries are considered consultants and provide advice to clients on a contract basis. Many consulting actuaries audit the work of internal actuaries at insurance companies or handle actuarial duties for insurance companies that are not large enough to keep their own actuaries on staff.

8. Actuaries Held About 27,700 jobs in 2019.

Actuaries typically work on teams that often include managers and professionals in other fields, such as accounting, underwriting, and finance. Most actuaries work full time and some work more than 40 hours per week.

9. You’ll Need a Math Degree to Become an Actuary

Actuaries must have a strong background in mathematics, statistics, and business. Typically, an actuary has an undergraduate degree in mathematics, actuarial science, statistics, or some other analytical field.

To become certified professionals, students must complete coursework in economics, statistics, and corporate finance.

Students also should take classes outside of mathematics and business to prepare them for a career as an actuary. Coursework in computer science, especially programming languages, and the ability to use and develop spreadsheets, databases, and statistical analysis tools, are valuable. Classes in writing and public speaking will improve students’ ability to communicate in the business world.

10. Other Job Titles For Actuaries Include Actuarial Analyst and Actuarial Associate

Other Job Titles Are:

  • Actuarial Consultant
  • Actuary
  • Consulting Actuary
  • Health Actuary
  • Pricing Actuary
  • Pricing Analyst
  • Product Development Actuary
  • Retirement Actuary

Jobs Similar to an Actuary

Compensation and Benefits Managers
Cost Estimators
Compensation, Benefits, and Job Analysis Specialists  
Market Research Analysts and Marketing Specialists  
Accountants and Auditors   
Budget Analysts
Financial Examiners  
Survey Researchers

More Information About Actuaries

American Academy of Actuaries

For more information about actuaries in property and casualty insurance, visit

Casualty Actuarial Society

For more information about actuaries in life and health insurance, retirement benefits, investments, and finance/enterprise risk management, visit

Society of Actuaries

For more information about how to become an actuary, visit

Be an Actuary

For more information about pension actuaries and their licensing requirements, visit

American Society of Pension Professionals and Actuaries

U.S. Department of Labor and U.S. Department of the Treasury’s Joint Board for the Enrollment of Actuaries

Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, Actuaries,
at https://www.bls.gov/ooh/math/actuaries.htm (visited ).