The role of an actuary is crucial in the world of business and finance. They are responsible for analyzing data and statistics to forecast future trends and events, which helps businesses make informed decisions about things like investments, insurance policies, and pension plans. But how long does it take to become an actuary? In this blog post, we will explore some of those factors and give you a better understanding of what the journey to becoming an actuary looks like.
What Is An Actuary?
If you’ve ever wondered what an actuary is or what they do, you’re not alone. The term “actuary” is thrown around a lot, but few people know what it means. Simply put, an actuary is a business professional who uses mathematical and statistical modeling to assess risk to minimize financial losses. Actuaries work in a variety of industries, but they are most commonly found in the insurance and finance sectors.
So, what does that mean exactly? Let’s break it down. Actuaries use their skills in math and statistics to calculate the likelihood of events occurring, such as natural disasters, car accidents, or premature death. They then use this information to develop policies that will minimize the financial impact of these events on their clients. For example, an actuary working in the insurance industry may help develop a policy that covers homeowners in the event of a natural disaster.
While an actuarial career may sound daunting, it is quite rewarding. Actuaries are highly sought-after professionals who command high salaries and enjoy excellent job security.
According to the U.S. Bureau of Labor Statistics, actuaries’ employment will increase by 24% between 2020 and 2030, which is much faster than the average. The BLS attributes the high growth rate to an increased demand for actuarial services.
If you’re interested in pursuing a career as an actuary, read on to learn more about what the job entails and what you can do to increase your chances of success.
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What Does An Actuary Do?
An actuary is a business professional who uses mathematical and statistical modeling to assess risk to minimize financial losses. In other words, actuaries use their skills in math and statistics to calculate the likelihood of events occurring, such as natural disasters, car accidents, or premature death. They then use this information to develop policies that will minimize the financial impact of these events on their clients.
For example, an actuary working in the insurance industry may help develop a policy that covers homeowners in the event of a natural disaster. Or, an actuary working in the finance sector may help develop a retirement savings plan that minimizes the effects of inflation. Whatever the specific application may be, actuaries use their skills to protect people and businesses from financial loss.
Actuaries typically work full-time in offices; however, some roles may require travel to meet with clients or attend conferences. Most actuarial positions also require at least some level of post-secondary education; however, some entry-level roles may only require a high school diploma or equivalent.
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What Types Of Skills Are Needed To Become A Good Actuary?
Analytical Skills
One of the most important skills for an actuary is the ability to analyze data. After all, this is what actuaries do! They gather data from various sources and then use that data to assess risk and make predictions. This requires being able to understand complex concepts and then distilling them down into simpler terms. It also requires being able to see relationships between different pieces of data that others might miss. So, if you’re good at seeing patterns and making connections, you might just have the makings of a great actuary!
Communication Skills
While actuarial work does involve a lot of time spent alone with a computer, it is still a very collaborative profession. Actuaries need to be able to effectively communicate their findings to those who may not be as mathematically inclined. They also need to be able to explain complex concepts in simple terms and write clearly and concisely. So, if you’re a people person with strong writing skills, actuarial science might be the career for you!
Problem-Solving Skills
Another important skill for actuaries is the ability to solve problems. Actuaries are constantly presented with new and unique problems, often with no clear solution. That’s where problem-solving skills come in handy! The best actuaries are creative thinkers who are not afraid to try new approaches when traditional methods don’t work. So, if you’re the type of person who enjoys finding new ways to solve old problems, you just might have what it takes to be an actuary!
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How Long Does It Take To Become An Actuary?
The path to becoming an actuary is not a straightforward one. It typically takes around eight years of schooling and working experience to earn the necessary credentials.
Get A Degree In An Actuarial Science Degree Program
The first step to becoming an actuary is to get a degree in mathematics, actuarial science, or a related field from a recognized university.
Many actuarial science programs are offered at both the undergraduate and graduate levels. The majority of actuarial jobs require at least a 2:1 bachelor’s degree (second class, upper division), although some employers may prefer candidates with a first-class degree or higher.
In addition to completing coursework, students must also pass a series of actuarial exams ( known as preliminary exams) to earn their actuarial credentials. The examinations are offered by the Society of Actuaries and the Casualty Actuarial Society. Most students take four or five years to complete all of the necessary coursework and examinations.
A graduating actuarial science major will need to pass at least two or three of the industry’s certification actuary exams to land a job. Once employed, actuaries continue studying and preparing to complete seven exams to become certified at the associate actuary level.
For those who want to become a fully qualified actuary, known as fellowship level, another three exams are required for fellowship certification, for a total of 10.
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Work Experience Requirements
The second factor that comes into play when determining the amount of time it will take to become an actuary is work experience. Most actuarial positions require at least two years of relevant work experience. Relevant work experience can be gained through internships, summer jobs, entry-level work at an insurance company, and part-time jobs during the school year.
Many actuarial science programs also have requirements for residency or fellowships. Residencies typically last one year and involve working full-time in an actuarial position. Fellowships usually last two years and involve working full-time in an actuarial position while also completing coursework toward a professional designation.
Pass Required Exams
Depending on your chosen specialty—life insurance, health insurance, property & casualty insurance—you may be required to pass additional certification exams administered by either the SOA or CAS before earning your FSA or CPCU designation.
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Conclusion
Becoming an actuary is a lengthy process that requires plenty of hard work and dedication. However, the result is a highly rewarding career with many growth opportunities. If you’re interested in becoming an actuary, start by doing your research and finding an actuarial program that fits your needs. With enough effort, you can achieve your goal of becoming a successful actuary. Have you started planning for your actuarial exams yet?