Want to Become and Actuary?

Overview
If you’re reading this document, you’re probably business, statistics or a mathematics major trying to figure out if becoming an actuary is right for you. Hopefully after reading this document, you’ll understand the basics of what an actuary does, where they work, what type of salaries they make, and much more.

What is an Actuary?
The most common thing an actuary does is manage financial risk, which is any risk associated in the form of financing. An actuary would use formulas and algorithms to determine a particular financial risk for their company. They also provide financial security for a corporation. Security itself is being in a state when one is free from danger or threat. Actuaries try to measure the security of a corporation or even an individual to see if it’s possible for them to grow, or if they need to first become more financially stable.

What Does an Actuary Do?
They help by advising businesses how to grow and retirees to invest with confidence. They do this by doing things like evaluating the likelihood of future events by using numbers, designing ways to reduce the chance of undesirable events, and decreasing the impact of harmful events that do happen. In many situations actuaries will also deal with mergers, or the combining of two companies. Figure 1

An actuary needs to be very well rounded in their business skills. Aside from their work that includes mathematics and statistics, they also need to be a jack of trades in their business skills. These skills should include accounting, finance, and economics. Refer to figure 1 to understand how all of these skills need to work together for a functioning actuary.

What Kind of Places Does an Actuary Work?
Actuaries are needed in many difference work-environments. The most common place an actuary can be found is at an insurance company. Here actuaries calculate costs, and determine premiums for policyholders. A premium is t he amount of payment required from the insurer to the insurance company periodically to provide coverage for an insurance plan for a specific period of time. And a policyholder is the one that holds the insurance contract. Private corporations also need actuaries; especially those who work in industries that involve a lot of risk. For strategic business decisions to be made, risks will need to be evaluated, and that’s what an actuary can do.

Actuaries can also be employed as consultants. A consultant is a person who provides expert advice, in this case financial advice. Consultants can be working for a major corporation, or can be a single person business practice. Actuaries can also work in places that typically seem unrelated but are still utilized. In places like the government, universities, banks, accounting firms, labor unions, rating bureaus, and fraternal organizations actuaries can be a huge asset.

Salary Figure 2 (Salary.com) Here is a graph on the annual salary of actuaries across the country. You can see that the middle 50% get paid between $108,894 and $133,541. Those in the lower 25% get between $98,530 and %108,894. Then the actuaries getting paid the most can be getting $145,617 and even higher. It’s clear that becoming an actuary is also beneficial based on the amount you get paid.

Conclusion
I hope now you have a much better understanding on what it really means to be an actuary, and the type of work that they do. The more you can learn about the types of jobs that there are, the better chance at finding at job you truly enjoy.