Actuarial Career: Steps To Becoming An Insurance Actuary

Becoming an insurance actuary is a multi-step process that requires dedication and a strong background in mathematics and statistics. Actuaries are experts in evaluating and managing risk, and they play a crucial role in the insurance industry by helping to set insurance rates and premiums. Here's a step-by-step guide on how to become an insurance actuary:

1. Get a Bachelor's Degree: Although not always required, a bachelor's degree in actuarial science, mathematics, statistics, economics, or a related field is highly recommended. This educational background provides a solid foundation for the technical skills needed in actuarial work.

2. Develop Technical Skills: Enhance your proficiency in software and programming languages commonly used in the industry, such as Excel, SQL, and programming languages like VBA, Python, and SAS. These skills are essential for analyzing data and performing complex calculations.

3. Pass Actuarial Exams: Actuaries are required to pass a series of certification exams conducted by professional organizations like the Society of Actuaries (SOA) or the Casualty Actuarial Society (CAS). Passing these exams is a crucial step towards becoming a certified actuary.

4. Gain Work Experience: Apply for entry-level actuarial positions or internships to gain practical experience. Working with established actuaries will help you develop your skills and build a network in the industry.

5. Pursue Advanced Credentials: Consider obtaining associate-level and fellow-level certifications from SOA or CAS. These certifications demonstrate your expertise and open up more career opportunities.

6. Continue Learning: Actuaries need to stay current with industry developments and new technologies. Pursue continuing education credits and consider attending seminars or workshops to maintain your certification status.

7. Advance Your Career: With experience and additional certifications, you can advance into senior roles such as partner, consultant, or actuarial manager. You may also explore specialized areas like property insurance, life insurance, or retirement planning.

Get a bachelor's degree in actuarial science, mathematics, statistics, or a related field

Earning a bachelor's degree in actuarial science, mathematics, statistics, or a related field is the first step toward becoming an actuary. While a bachelor's degree is not strictly required to enter the field, it is highly recommended as most employers prefer candidates with a relevant degree.

Actuarial science serves as an excellent foundation for a career in actuarial work, covering key topics such as probability, financial economics, and risk modelling. However, a degree in mathematics or statistics with a concentration in actuarial science can also be a suitable option. Additionally, majoring in finance or economics while taking relevant math courses can adequately prepare graduates for a career as an actuary.

For those pursuing a bachelor's degree in an unrelated field, it is beneficial to complement their studies with courses in economics, statistics, and corporate finance, as these are essential for professional certification. Developing proficiency in computer science and programming languages is also advantageous, given the significant use of software and spreadsheets in the profession.

Furthermore, gaining practical experience through internships or similar positions can greatly enhance a candidate's resume and provide valuable insights into the day-to-day work of an actuary. Well-rounded candidates with strong soft skills and relevant extracurricular activities will be well-positioned to secure internships and entry-level positions in the field.

Pass two actuarial exams before graduating

Passing two actuarial exams before graduating is a common goal for aspiring actuaries. This is because having two exams under your belt can help you secure an internship, which is a crucial step in becoming an actuary. While some people aim for three or more exams, passing two is generally considered the minimum for increasing your chances of landing an internship and, later, an entry-level job.

Each actuarial exam demands a significant time commitment, typically requiring anywhere from three to six months of preparation. The pass rate for these exams is usually between 30% and 50%, underscoring the importance of thorough preparation.

In the United States, aspiring actuaries must pass a series of exams given by the Society of Actuaries (SOA), the Casualty Actuarial Society (CAS), or the American Society of Pension Professionals and Actuaries (ASPPA). The first two exams are often Exam P and Exam FM, offered through the SOA. These exams cover probability and financial mathematics, respectively.

It's worth noting that passing more exams doesn't always equate to higher pay or an easier path to employment. Employers also value relevant experience, such as internships, and on-the-job training. Therefore, it's essential to balance exam preparation with gaining practical experience in the field.

Additionally, passing more exams may not necessarily lead to a higher starting salary. Instead, it may be more advantageous to have a combination of exam passes and relevant work experience, as this demonstrates a well-rounded skill set that employers seek.

In conclusion, passing two actuarial exams before graduation is a sensible goal. It strikes a balance between demonstrating your knowledge and leaving room for gaining practical experience, which is highly valued by employers.

Develop technical computer skills

Aspiring actuaries need to develop a broad range of technical computer skills to excel in their roles. These skills are essential for handling and analyzing large datasets and performing risk assessments. Here are some key areas to focus on:

Excel Proficiency

Excel is a fundamental tool for actuaries, who use it extensively for data analysis and creating models. Familiarize yourself with essential functions like vlookup, hlookup, and if statements. Advanced skills such as data filtering and sorting, conditional formatting, and pivot tables will also set you apart. Excel is a versatile program that allows actuaries to manipulate and interpret data efficiently.

Statistical Programming Languages

Actuaries need to be proficient in at least one statistical programming language. Learning VBA (Visual Basic for Applications) is highly recommended as it can automate tasks in Excel and other Microsoft programs, saving time on manual work. Other valuable languages include Python and SAS, which can enhance your data analysis capabilities.

Online Courses and Resources

Consider enrolling in online courses, such as the TIA Technical Skills course, to develop your Excel and VBA skills. These courses provide structured learning and can complement on-the-job training. Additionally, resources like the Actuary Accelerator Community offer Excel, VBA, and Python courses to enhance your technical skillset.

On-the-Job Training

While online courses are valuable, nothing beats practical experience. Seek out opportunities to apply your technical skills in real-world scenarios. This could be through internships, entry-level actuarial positions, or even volunteer work. On-the-job training will refine your technical abilities and demonstrate your proficiency to employers.

Microsoft Office and Beyond

Basic computer skills and a solid understanding of Microsoft Office are essential for actuaries. However, don't stop there. Explore other tools within the Microsoft ecosystem, such as Power BI, which can aid in data visualization and reporting. Familiarity with a range of software tools will make you a versatile asset to any organization.

Developing strong technical computer skills is a critical step in becoming a successful insurance actuary. These skills will empower you to handle complex data, create models, and provide valuable insights to inform decision-making. Remember that continuous learning is key, as technology and tools evolve rapidly in the actuarial field.

Gain relevant work experience

Gaining relevant work experience is a crucial step in becoming an insurance actuary. Here are some tips to help you achieve this:

• Actuarial Internships: Aim to complete at least one actuarial internship before graduating. This will provide valuable experience and help build connections in the industry. Consider diverse environments for your internships, such as insurance carriers, consulting firms, government entities, banks, or insurance firms. This will give you a well-rounded perspective on the profession.
• Entry-Level Actuarial Jobs: After graduation, focus on securing your first entry-level actuarial job. Common job titles to look for include actuarial associate and actuarial analyst. These roles will allow you to continue your certification process while gaining practical experience.
• Networking and Career Bridge Programs: If you struggle to find a job initially, focus on networking opportunities and consider joining a professional organisation or taking advantage of career bridge programs offered by some colleges.
• Specialise: As you gain experience, consider specialising in a particular area of actuarial science, such as property insurance, life insurance, financial risk, or retirement planning. This will help you develop expertise and become more competitive in the job market.
• Continuing Education: Actuarial science is a field that requires continuous learning and development. Stay up to date with industry changes, new technologies, and advancements in data science and analytics. Consider pursuing a master's degree or participating in professional development programs to enhance your skills and knowledge.

Pursue professional certifications

Professional certifications are a crucial step in becoming a fully qualified actuary. The Casualty Actuarial Society (CAS) and the Society of Actuaries (SOA) are the two independent entities that offer credentials in this field. Each organisation has two levels of certification: associate and fellow.

To become an Associate of the Casualty Actuarial Society (ACAS), you must complete specific coursework and pass two exams to demonstrate your mastery of actuarial concepts. This typically occurs while you are still in school and is known as Validation by Educational Experience (VEE). The required topics include accounting, finance, and economics. After attaining ACAS credentials, you can further advance by earning Fellow of the Casualty Actuarial Society (FCAS) certification. This requires passing three additional exams covering subjects such as estimating policy liabilities, advanced rate-making, and rate of return.

On the other hand, if you plan to work in the health and life insurance sector, you will pursue certifications from the Society of Actuaries (SOA). The first level of certification offered by the SOA is the Associate of the Society of Actuaries (ASA). To achieve this, you must pass six exams covering topics such as financial mathematics, risk modelling statistics, and predictive analytics. Additionally, you will need to complete e-learning classes and a seminar in professionalism. After attaining ASA credentials, you can advance to the Fellow of the Society of Actuaries (FSA) certification. This requires choosing a specialty, completing the associated courses and exams, and finishing a capstone experience.

It is important to note that the process of attaining these certifications can be lengthy and challenging. It typically takes between four and seven years to achieve associate-level certification, and you will need to pass a total of seven examinations. Becoming a fellow may take an additional two to three years, and you will need to pass three more exams. Actuaries must also participate in continuing education to maintain their certification status.

While pursuing these certifications, it is common for employers to provide support. Many companies will cover the cost of study materials and exams, offer paid time for studying, and even provide bonuses or raises for each passed exam.

Frequently asked questions