List of Top 3 Careers for Actuaries
Below are some of the actuary careers/job roles that a person can opt for –
Overview of Actuary Careers
‘Actuaries’ are professionals who use their statistical skills to analyze the probability of events and estimate their monetary impact on the business and its customers. In other words, their task is to assess the financial cost of uncertainties. They are mostly required in the insurance and pension industry where the challenge is to research future ambiguity of settlements. Sectors like pension fundsPension FundsA pension fund refers to any plan or scheme set up by an employer which generates regular income for employees after their retirement. This pooled contribution from the pension plan is invested conservatively in government securities, blue-chip stocks, and investment-grade bonds to ensure that it generates sufficient returns., investment management, government departments often require Actuaries to analyze the risk undermining their business.
Some of the most important careers for actuaries in the industry are:
Career #1 – Insurance Actuary
The insurance industry employs most of the actuaries, and they work in 3 diverse fields which are mentioned below:
- Life Insurance
- Health Insurance
- General Insurance
#1 – Life Insurance
Life insurance is a type of insurance that pays compensation amount when the insured dies. It pays a lump sum amount on the occasion of death. These are long-term contracts; actuaries in this field use their analytical skills to estimate how many people will die each year, the conclusion of which is used to price the life insurance contracts. In simple words, the amount the insured pays is subject to actuaries’ estimation of the man’s life.
- Designing products: The primary role is to gauge the profitability of products launched by the firm. They are highly instrumental in allotting premiums rates, creating models to value profitability, administer experience reviews, and sometimes also interact with underwritersUnderwritersThe underwriters take the financial risk of their client in return of a financial fee. Market Makers like financial institution and large banks ensure that there is enough amount of liquidity in the market by ensuring that enough trading volume is there..
- Modeling and Reporting: Analysing future liabilities like unpaid claims. Actuaries play a very important role in identifying and monitoring the funds that the company is required to discharge the promised benefits to the insurance holders. This also includes valuing the reserves required by the firm to meet future obligations.
- Estimating Profit: actuaries help companies assess their future profits by estimating net inflows. Etc.
#2 – Health Insurance
- In healthcare, actuaries are needed to analyze various data and information related to the health industry and recommend solutions to the firm in order for them to use it to reduce risk and increase returns from the health care insurance business. They are instrumental in designing and suggesting policy plans based on the risk quotient, premium amount, and new trends in the sector.
- Advising the firm on designing the premium and benefits for health insurance customers.
- Analyzing new movements and trends in the industry to tap into new opportunities and spot risks
- Keep track of the industry to gauge competitors’ way of working and remain competitive by adopting robust policies to get high returns.
- Analyze financial and accounting databases in order to prepare financial models and conduct cost and benefit analysis for health policies etc.
#3 – General Insurance
- Any insurance which is not considered to be life insurance can be termed as general insurance.
- They are deeply involved in risk management.
- Design insurance rate plans and policies are conducive to business growth.
- Modeling and forecasting.
- Damage from Hurricane Katrina in 2005. Actuaries take a long-term view of such incidents and, based on their skills, recommend commensurate pricing, and suggest suitable reserves.
Education and Skill Set Required
- A bachelor’s focused on mathematics, statistics, and actuarial scienceActuarial ScienceActuarial Science evaluates the various risks associated with the field of finance. The use of mathematics and statistics, which is its prime focus, is used to analyze the uncertainty of future events and their financial implications.. A master’s degree is preferable.
- Accomplished course work in computer science focused on programming languages, with proficiency in Microsoft Excel.
- Well versed with statistical tools and an ability to develop intelligent conclusions from a set of databases.
- Various industry certifications to acquire professional status.
- Casualty Actuarial Society (CAS), Society of Actuaries (ASA) Fellow Society Actuaries (FSA) designated professional.
- Should be a keen learner and have the desire to constantly develop and update market reading skills.
- A beginner level insurance actuary with the basic exam can make somewhere between $46,000 and $71,000. However, a fully certified experienced professional can make somewhere between 125,000 to 190,000. And at the senior level, they make more than $500,000.
Job Statistics and Growth Prospects
- Jobs for actuaries is poised to grow at 22% between 2016 and 2026, which is higher than the other occupations in this period. However, because it’s a small industry, the growth will only bring around 5,000 new positions over a span of 10 years.
Salary for Actuary in Different Fields
- Scientific and technical services: $108,920
- Finance and insurance: $103,010
- Government: $102,240
- Management of companies: $97,110
- It is one of the most highly paid professions in the United States, with consistently being top-ranked in job satisfaction.
- Demand for actuaries is high as they are integral to profit-making and growth objectives not only in the insurance business but also in other ones like pension, investment, etc.
- Progress and upward movement are always possible by appearing for advanced certifications.
- One of the best advantages of being an actuary is, it’s a very flexible profession; for example, if you don’t want to work in insurance, you can make a switch to some other industry that entails relevant duties and responsibilities, like finance or pension.
- It demands a high level of complex statistical acumen and delivery, which is not for everyone. The exam requires a rigorous study pattern with high dedication levels.
Companies that Hire Insurance Actuary
- The big four, I.e., PWC, E&Y, KPMG, Deloitte.
- AXA insurance
- Standard Life
- MAX insurance
- Willis Towers Watson
- WNS insurance services
Career #2 – Pension Actuary
A pension actuary has the responsibility of advising the trust/employer about various beneficial pension schemes. Their job is to work with other specialists and legal professionals to design pension and retirement schemes that are in sync with the firm’s growth objectives. They are highly influential in analyzing whether the reserves available would be sufficient to meet future obligations and are also instrumental in recommending retirement plans to customers.
- Carry out regular valuations and update about the asset-liability position to the trust, at the same time, address the pay-out capabilities.
- To keep track of inflows and outflows from the fund and make sure all the transactions satisfy legal requirements.
- Reporting to regulator various important transactions and breaches/ gaps, if any.
- Determine and revise regularly the MFR (minimum funding requirement). MFR is an employer’s contribution, which is pooled and invested in getting returns in order to pay out the benefits when needed.
- To act as a guardian of all the investments of the trust, in some cases, be the investment manager and make sure the company is competent and efficient enough to discharge liabilities at all times.
- Conduct transfer value calculations. (Transfer value is a discretionary right given to an individual to transfer his benefit amount into another scheme, the however employer has the final say in this after considering legal and financial implications)
- Providing gainful suggestions to the trust/ employer when asked about recommendations for bulk transfers. (In case of deferred pensioners, the firm may decide to transfer the whole amount of future liabilities to an individual, basis the scheme clause so allows.)
- Recommending plausible suggestions in case the firm decides to partially discontinue or wind up a particular scheme. Studying financial and legal implications of such events and, at the same time, understanding the deficits created by such a fund/scheme, finally suggesting a profitable course of action.
Top Companies that Hire Pension Actuary
- Mass mutual
- One America
- NY Hart
- Security Mutual Life Insurance
Qualification and Skill Set Required
- Along with the qualifications prescribed under insurance actuary, to become a pension actuary, one needs to clear a set of three exams administered by the joint board for the enrolment of actuaries in order to become an ‘enrolled actuary.’ They are specialists in pension plans.
- The pension industry is a very complex business that is maturing by the day. As people realize the urgent need to save and resort to retirement plans, the funds and schemes are becoming more and more challenging to handle and get smart profits out of.
- As such, companies are trying to rope in more actuaries in their pension business. Young aspirants who are pliant and ready to be the face of the changing sector stand a lot to gain from this untapped industry.
- The range of work has widened, and the issues this industry is facing are deep. As we are taking a profound view of life after retirement, there is an increasing awareness among the masses to save and plan smartly.
- The responsibility will heavily fall on actuary professionals to chart ways to discover, convey, and offer solutions to the stakeholders and governments at large.
- The average salary for pension actuary in the United States is around $82,765
Career #3 – Environment Actuary
Businesses today are continuously getting impacted by the environmental instabilities and the ever-fluctuating government’s answer to it. As the companies risk ambassador, these developments are of great interest to actuaries. The variations in climate have implications on other lines of business as well.
- Evaluating the impact of climate change on investments, strategies, demography which will have a binding on the pension business
- Understand how climate-related vulnerability in real estate and other lines of insurance will impact the business. At the same time, analyze its effect on projected mortality and survival ratios.
- Connect with other specialists in finance departments and study the feasibility of the investments and proposed projects from the environmental standpoint.
- Research and study well all the risks the firm is facing and will face in the future due to environmental fluctuations and consequent policy changes of the government.
- Another important role includes estimating the future trends in environment and climate, thus accordingly recommending profitable solutions to the management, at the same time conducting the valuation of reserves and the market riskMarket RiskMarket risk is the risk that an investor faces due to the decrease in the market value of a financial product that affects the whole market and is not limited to a particular economic commodity. It is often called systematic risk..
- The subtle relationship between climate change and insurance has forced the necessity to rope in more and more environment specialists in strategy making.
- An actuary has a special place in this regard as they are highly skilled statistical experts with profound business acumen. As such, companies are looking to hire actuary at an increasing rate. It is very lucrative.
- Long working hours, with high levels of accountability.
Actuaries jobs are troubleshooters and strategic thinkers who help companies in understanding the market in a deeper sense. Their analytical acumen goes a long way to assist the top management in drawing an intelligent vision for their growth objectives. Therefore, they are high. Therefore, jobs in actuaries are critical to the success of the company as a whole.
This has been a guide to Careers for Actuaries. Here we provide the list of top 3 job roles in actuaries, description & career paths, including Insurance Actuary, Pension Actuary, etc. You may also have a look at these Career articles below –