What is an Actuary?

Actuarial science is a huge field encompassing many different areas of study including life, health, and pensions (among others).  The primary purpose of an actuary is to analyze the financial consequences of risk.  While most actuaries find themselves working for insurance companies or consulting firms, many also end up working for the government, hospitals, investment firms, or really anywhere that has the need to manage financial risk.  Actuaries need a strong mathematical/statistical background, in addition to some financial knowledge in order to lead a successful career.

What Do Actuaries Do?

Actuarial Science is quite a diverse field, so actuaries can actually do a wide variety of things.  Some actuaries are involved with pricing, where they help insurance companies set the premiums for their insurance products. Others are involved with reserving, where they analyze the expected claims and decide how much the company should set aside to pay for claims.  There are other areas as well, such as product development where actuaries work to develop new insurance products.  Actuaries can work in fields like life insurance, health insurance, retirement benefits, auto insurance, home insurance, etc.  Whether an actuary is doing pricing for an auto insurance company or product development for a life insurance company, he/she will use mathematical and statistical methods to assess the company’s risk.

How Do I Become An Actuary?

Becoming an actuary is not easy, but it is well worth the effort.  In order to become an actuary, you must become an Associate and eventually achieve Fellowship in one of the professional actuarial societies.  In the United States, there are two such societies: the Society of Actuaries (SOA), and the Casualty Actuarial Society (CAS).  The SOA consists of actuaries in health/life insurance, pensions, and employee benefits.  The CAS consists of actuaries in “Property/Casualty” fields such as auto/home/fire insurance and workers’ compensation.  Each society administers a series of exams which must be passed in order to be considered an “Associate” or “Fellow” of either society.  There are the “Preliminary Exams” and “Validation by Educational Experience (VEE) Courses” that prospective actuaries must complete before moving on to the advanced examinations.  For information on the Preliminary Exams, please visit our Exams page or BeAnActuary.org.  For more information on VEE Courses, please visit our VEE Courses page or SOA.org.