All about actuaries

If you're great at math and love analyzing problems and taking tests, a career as an actuary might be for you.

All about actuaries

You're business-oriented and self-motivated. You love analyzing problems, and you think of exams as challenges rather than ordeals. If these qualities sum up your personality, consider a career as an actuary, a professional who advises businesses about economic risks.

What does an actuary do?

The traditional actuary works for an insurance company, setting rates for auto, life or homeowner's policies, or calculating how much money a company must set aside now to pay pensions later.

"But that doesn't have to be the case," says Meredith Lego, market manager for the Society of Actuaries (SOA), a major actuarial trade association. "It's a position that is convertible into many other industries and functional areas. There are so many different applications for actuaries' skills sets."

For instance, your insurance and finance training may help you shift into mutual fund risk analysis or into handling the statistical analysis portion of a market research project.

About two-thirds of actuaries work in the insurance industry, where they predict future claims costs. The rest typically work for pension, law or consulting firms, banks, corporations or the government.

To work as an actuary, you need to be a math whiz who understands calculus, statistics and probability. You should also have a working knowledge of finance, accounting and economics, as well as spreadsheet, statistical analysis and database programs.

The right degree

Breaking into the field takes a bachelor's degree in math, statistics, economics, finance, accounting, or better yet, actuarial science from one of the colleges with actuarial programs. Once you have the appropriate sheepskin, prepare to start studying for a long series of exams. Some students take the first of the series before graduation, while others take entry-level jobs and then start the tests.

Tests, tests, tests

If you're determined to enter the actuarial field, you'd better like exams. The studying and test-taking process continues for a decade, with most actuaries shooting to pass enough tests to reach the associate-actuary level in five years. Many then go on to work toward achieving "fellow" designation.

The first four actuarial exams are joint tests offered by two professional actuarial societies. The Casualty Actuarial Society (CAS) offers exams for property and casualty insurance actuaries. SOA does the same for life and health. Actuaries who do pension work must be enrolled by the Joint Board for the Enrollment of Actuaries.

The first part of the SOA and CAS exams covers the same subjects: probability, calculus, statistics and math. Passing that first hurdle makes it easier to find a higher-paying entry-level job—employers want to hire those with proven test-taking abilities.

The tests are so demanding that employers often offer study materials, prep courses and on-the-job study hours as employee benefits. Undergraduates recruited by The Hartford for its actuarial student program receive those benefits, plus exam-based salary increases as they rotate through several lines of business.

"It does take a lot of personal dedication and time commitment, but it's definitely worth it, and you usually get great support at your company," says Anju Arora, an assistant actuary for The Hartford.

Looking ahead

The Bureau of Labor Statistics predicts employment growth for actuaries will be much faster than the average for all occupations through 2024. Good bets within the field include property and casualty insurance and positions at consulting firms.