Actuarial science is a specialized field that deals with the mathematical and statistical analysis of risk and uncertainty. Actuaries use their expertise to help organizations make informed decisions about managing risk and ensuring financial stability. The recruiters at Questpro know that a career in actuarial science can be both challenging and rewarding, offering a range of benefits to those who choose to pursue this profession.
What Do Actuaries Do?
The primary objective of people that major in actuarial science is to become an actuary. An actuary is someone that typically works in an insurance company and is a specialist in quantifying risk.
Actuaries use mathematical and statistical concepts in order to determine the likelihood of certain events occurring in the future, including when they’ll occur, as well as the expected financial impact of those events. Using this information, an actuary can calculate a reasonable amount of money that should be put aside now in order to ensure that enough money will be available later to pay for the event if and when it occurs in the future.
Some Of The Tasks That Actuaries Perform Include*:
- Compile and analyze statistical data and other information.
- Estimate the probability and likely economic cost of an event such as death, sickness, an accident, or a natural disaster.
- Design and test insurance policies, investments, and other business strategies to minimize risk and maximize profitability.
- Calculate cash reserves needed, based on existing policies and liabilities, in case of payout or claims.
- Produce charts, tables, and reports that explain calculations and proposals.
- Explain their findings and proposals to company executives, government officials, shareholders, and clients.
Most actuaries work for 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.
Some actuaries work as 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.
Actuaries in the insurance industry typically specialize in one field of insurance, such as the following:
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 creating estimates of how long someone will live. These estimates are based on risk factors, such as age, tobacco use, occupational hazards, etc.
Property & Casualty Insurance
Property and casualty insurance actuaries help develop policies that insure policyholders against property loss and liability resulting from accidents, natural disasters, fires, and other events. For example, they calculate the expected number of claims resulting from automobile accidents, which varies with the insured person’s age, driving history, type of car, and other factors.
Enterprise Risk Management
Enterprise risk management actuaries identify 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 mitigate the financial impact of those risks.
Pension & Retirement Benefits
Pension and retirement benefits actuaries design, test, and evaluate company pension plans to determine if funds available in the future will be enough to ensure payment of benefits. They must report the results of their evaluations to the federal government. Pension actuaries also help businesses develop other types of retirement benefits, such as 401(k)s and healthcare plans for retirees. In addition, they provide retirement planning advice to individuals.
Public Sector Work
Public sector actuaries have different duties, based on the level of government in which they work. In the federal government, actuaries may evaluate proposed changes to Social Security or Medicare or conduct economic and demographic studies to project benefit obligations. At the state level, actuaries may examine and regulate the rates charged by insurance companies.
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.
Actuarial Science Jobs Are In High Demand
Actuaries are in high demand in a range of industries, including insurance, finance, consulting, and government. The demand for actuaries is expected to continue to grow, as businesses seek to manage and mitigate risk in an increasingly uncertain world. According to the U.S. Bureau of Labor Statistics, employment of actuaries is projected to grow 18 percent from 2020 to 2030, much faster than the average for all occupations.
Actuaries are well compensated for their skills and expertise. According to the Society of Actuaries, the median annual salary for actuaries in the United States was $120,000 in 2020. Entry-level actuaries can expect to earn salaries in the range of $60,000 to $80,000, while experienced actuaries can earn upwards of $250,000 per year.
Variety of Work
As mentioned above, actuaries have the opportunity to work in a variety of industries, including insurance, finance, consulting, and government. They can also work in different areas of specialization, such as life insurance, health insurance, pensions, or risk management. This variety of work allows actuaries to gain valuable experience and develop a diverse skill set.
Excellent Job Security
Actuarial science is a highly specialized field, and the skills and expertise of actuaries are in demand across a range of industries. This means that actuaries enjoy a high level of job security, with a low risk of unemployment or job loss. In addition, the skills and knowledge gained through a career in actuarial science are highly transferable, providing opportunities for career advancement and growth.
Strong Professional Development Opportunities
Actuaries are required to obtain professional certification from organizations such as the Society of Actuaries or the Casualty Actuarial Society. These certifications require a rigorous course of study and ongoing professional development, providing actuaries with opportunities to learn and grow throughout their careers. In addition, many employers offer training and development programs to help actuaries stay up to date with the latest industry trends and developments.
Good Work-Life Balance
Actuaries typically work in a professional office environment, with regular working hours and a predictable schedule. This allows for a good work-life balance, with opportunities for family time and leisure activities outside of work. In addition, many employers offer flexible work arrangements, such as remote work or flexible hours, which can further improve work-life balance.
Actuarial science is a highly rewarding field that offers a range of benefits to those who choose to pursue a career in this profession. With high demand for their skills, competitive salaries, job security, and opportunities for professional development and work-life balance, actuaries enjoy a fulfilling and successful career path. If you are interested in pursuing a career in actuarial science, now is a great time to explore your options and begin your journey towards a rewarding and fulfilling career through Questpro Insurance & Risk Management Recruiters.
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*U.S. Bureau of Labor Statistics Occupational Outlook Handbook – 2023