Becoming an actuary is great for people who are looking for a rewarding and stable career. The path may be long, but comes with many perks (such as starting work right after your bachelor’s degree). We’ve laid out a step-by-step guide for how to become an actuary. Though getting an actuary degree may be the first obvious step, you’ll be surprised by the many options that are available.
Read on for a detailed overview of the actuary career. We’ll answer common questions, such as “How long does it take to become an actuary?” and “What kind of actuary certification will I need?”
What Is An Actuary?
An actuary analyzes financial data in order to assess possible risks for companies. They help businesses plan and prevent future losses.
Most often, actuaries work for insurance companies to assess the possible risks of certain insurance policies for certain candidates. They use statistics and numerical data to prevent risky policies and minimize damage.
What Does An Actuary Do?
Actuaries are very prevalent in insurance companies, where they assess the risks involved in granting insurance policies. However, actuaries can be found in any work environment that needs risk management and assessment. For example, you can find actuaries in government departments, financial companies, or tech companies.
Besides being great strategists, actuaries need good computer and math skills to analyze statistics, crunch numbers, and navigate computer software. This is why actuaries will often study both mathematics and computer science.
Actuaries may work alongside accountants and financial analysts, who provide them with additional information in order to assess financial portfolios and possible financial risk.
Photo by Anna Shvets from Pexels
How To Become An Actuary In 8 Steps
The first step to becoming an actuary is having the right education. A bachelor’s degree is a must, but you can also start taking advanced math classes in high school, which will highly benefit you later.
Degrees that will be helpful for actuaries include: computer science, actuarial science, and anything mathematics related, such as finance and economics. Even if you do not take a mathematical major, it will be necessary to take courses in advanced algebra and calculus.
2. Develop Computer Skills
Besides completing a computer science degree, which will likely give you a push in the right direction, it may also be advised to take specific computer program classes such as Excel or programming languages (like SQL).
3. Beginner’s Exams
Actuaries will complete many exams before (and throughout) their career.
The first two exams, which are completed before graduating, are the Probability Exam (Exam P) and the Financial Mathematics Exam (Exam FM).
These are the beginner’s exams and cover material on probability, calculus, and risk management. These are topics that can be covered in actuarial degrees or independent study.
An internship is an important part of becoming an actuary, and can be sought once you have an exam and some relevant courses under your belt. An actuary internship will give you the opportunity to work for established actuaries, get an idea of the day-to-day work, and make connections in the field — which can come in handy for gaining a paid position later on.
Photo by Andrea Piacquadio from Pexels
5. Entry-Level Job
Now that you’ve graduated with some experience and exams under your belt, it will be time to find your first job as an actuary. Your internship and education will hopefully give you enough knowledge and experience in the field, and along with a good resume, you’ll be able to display your accomplishments during your job interview.
6. Choose Between SOA And CAS
The next step will be to choose the direction of your actuary career. There are two actuary associations: the Casualty Actuarial Society (CAS) and the Society of Actuaries (SOA). Which association you choose will depend on what area of the field you wish to work in.
If you wish to work in property and casualty insurance, you will choose CAS, and if you want to work more with health insurance or retirement and life insurance, you will go with SOA.
This decision must be made at this stage because it will determine which kind of exams you will take next.
7. Attain Associateship
The first level of your actuary career will be associateship. To obtain associateship, you’ll complete 7 out of 10 exams (including the first two exams that you already completed in school). Depending on your direction, you will either earn these credentials through the CAS or the SOA.
If you’re interested in taking the CAS route, your exams will cover topics such as actuarial statistics, regulation and financial reports, financial risk, ratemaking, and estimating claim liabilities.
If you wish to take the SOA route, your exams will cover statistics for risk and predictive analysis, and actuarial mathematics.
8. Attain Fellowship
The last step, fellowship, requires three more exams which will make you a fully qualified and certified actuary.
These last two exams are typically completed once you’re already working full-time, and are often sponsored by your employers, so you will already be reaping the benefits from all your hard work.
Actuarial Student Programs are programs that companies provide to support you through this stage in your process. It includes covering exams, materials, and even study time, so make sure to ask about these programs in your interviews.
After these exams, you will finally be able to enjoy a work-life balance, and enjoy your hard-earned career as an actuary.
How Long Does It Take To Become An Actuary?
Putting all the above steps together, it takes an average of 7 to 10 years to become an actuary. However, note that a good chunk of that time (starting from step five) will already include working in the field.
How Much Does An Actuary Make?
Despite the hard work that goes into becoming an actuary, the career is stable and well-paying. According to the Bureau of Labor Statistics (BLS), the median salary for actuaries is $108,350 per year.
Additionally, this career is predicted to have a 20% job outlook between the years 2018-2028, which is a faster outlook than average.
Pros For Career Changers
An actuary career is very rewarding and stable. It’s a great choice for those who have good computer and math skills (or who have the potential to learn these skills).
Not only is the actuary career a good choice for young students, it is also one of the ideal paths for career changes. This is because it is possible to be working full-time while completing exams, which means that you won’t have to “go back to school” in the traditional sense if the financial load or taking care of a family makes career changes daunting.
If you’re aspiring to become an actuary and wondering where to begin, how about starting with earning your degree online? University of the People, a tuition-free, online university, makes changing careers easy by allowing students to study completely online, so they can continue working and raising a family while earning a degree.
If an actuary career sounds like the right fit for you, you’re in for a long but rewarding path. We hope the eight steps for how to become an actuary help you get an idea of the road ahead, and the inspiration to work toward your desired career.
The job of an actuary requires good computer and math skills, and you’ll do best to start off with an actuarial degree, or alternatively, a computer science and math degree.
Once you’ve gained experience and knowledge, you’ll be able to start at your entry-level job while you continue taking your exams to reach fellowship as a certified actuary.