How to Become an Actuary
Actuaries need a bachelor’s degree and must pass a series of exams to become certified professionals.
To enter the occupation, actuaries typically need a bachelor’s degree in mathematics, actuarial science, statistics, or some other analytical field. Students must complete coursework in subjects such as economics, applied statistics, and corporate finance and must pass a series of exams to become certified.
Actuaries need a strong background in mathematics, statistics, and business. Typically, actuaries have an undergraduate degree in mathematics, business, actuarial science, or some other analytical field.
To become certified, students must complete coursework in subjects such as economics, statistics, and corporate finance. Coursework in computer science, especially programming languages, and the ability to use and develop spreadsheets, databases, and statistical analysis tools also is important.
Because the different types of practice areas include health, life, pension, and casualty, internships may be helpful for students deciding on which actuarial track to pursue.
Licenses, Certification, and Registrations
Two professional organizations—the Casualty Actuarial Society (CAS) and the Society of Actuaries (SOA)—offer two levels of certification: associate and fellow.
The CAS certifies actuaries who work in the property and casualty field, which includes automobile, homeowners, commercial, and workers’ compensation insurance.
The SOA certifies actuaries who work in life insurance, health insurance, retirement benefits, investments, and finance.
Both credentials require candidates to complete coursework in economics, finance, and mathematical statistics while in college. Candidates also must pass a series of exams and take seminars on professionalism.
Many employers expect prospective hires to have passed at least one or two of these certification exams before graduation.
It may take up to 7 years for an actuary to earn the associate-level certification because of the lengthy preparation required. After becoming associates, actuaries typically take several more years to earn fellowship status. Both the CAS and the SOA have a continuing education requirement.
The SOA offers fellowship certification in five separate tracks: life and annuities, group and health benefits, retirement benefits, quantitative finance and investments, and corporate finance/enterprise risk management. Unlike the SOA, the CAS does not offer specialized study tracks for fellowship certification.
Pension actuaries typically must be licensed by the U.S. Department of Labor and U.S. Department of the Treasury’s Joint Board for the Enrollment of Actuaries. Licensed pension actuaries, known as enrolled actuaries, must meet certain experience requirements and pass exams administered through the SOA.
Entry-level actuaries typically start out as trainees. They are usually on teams with experienced actuaries who serve as mentors. Trainees begin work on basic tasks, such as compiling data, and take on more complex duties, such as conducting research and writing reports, as they gain experience. Trainees also may work in other departments, such as marketing, underwriting, and product development, to learn how actuaries fit into all aspects of a company.
Most employers support their actuaries throughout the certification process. For example, employers may pay the cost of exams and study materials or provide paid time to study. Employees may receive raises or bonuses for each exam that they pass.
Advancement usually depends on job performance and the number of actuarial exams passed. For example, actuaries who achieve fellowship status often supervise the work of other actuaries and provide input to senior management. Actuaries with a broad knowledge of risk management and how it applies to business may advance to become top executives, such as chief risk officers or chief financial officers.
Analytical skills. Actuaries identify patterns and trends in complex sets of data to determine the factors that affect certain types of events.
Communication skills. Actuaries must be able to explain complex technical matters to those without an actuarial background. They also must describe their work and recommendations clearly in written reports and memos.
Computer skills. Actuaries must know programming languages and be able to use and develop spreadsheets, databases, and statistical analysis tools.
Interpersonal skills. Actuaries serve as leaders and members of teams, so they must be able to listen to and collaborate with others.
Math skills. Actuaries quantify risk by using the principles of calculus, statistics, and probability.
Problem-solving skills. Actuaries identify risks and develop ways for businesses to manage those risks.