A career in actuarial science can be a low-stress, high-paying career, and actuaries often help business leaders make crucial business decisions. But what is actuarial science? It’s the art of predicting the future using math and statistics. Ready to learn more about this growing career field? In this guide, we cover:
- Actuarial Science Overview
- Actuarial Science Careers
- Pros of Working in Actuarial Science
- Cons of Working in Actuarial Science
Actuarial Science Overview
Actuarial science is the study, analysis, and prediction of risk using statistics and other mathematical models. These predictions help determine financial risk and allow companies to make mission-critical decisions on mitigating or avoiding an event. An actuary is an individual that performs the computations and analyses that predict the risk.
For example, an actuary might be asked to determine the risks of issuing a life insurance policy. The actuary uses their skills to analyze the data (like how many men and women the company wants to insure and how old everyone is) and run models to predict who might get sick or live a long time. Using those insights, the company sets rates and issues policies that consider all the likely possibilities.
Actuarial Science Careers
Actuaries use math, statistics, and other kinds of data analysis to assess and determine risk in a variety of areas. While many industries use actuaries to inform their decisions, in 2021, the Bureau of Labor Statistics (BLS) reported that people in actuarial sciences worked mainly in the following fields:
- Finance and insurance 74%
- Professional, scientific, and technical services: 13%
- Management 4%
- Government 3%
>>MORE: What Is Accounting?
Within these fields, actuaries may focus on a specialty. For example, while many actuarial science careers are in the insurance industry, actuaries may focus their work on life, health, or property insurance.
Other specialties could include:
- Employee benefits
Pros of Working in Actuarial Sciences
Not only is there a positive projected employment growth for actuaries over the next several years, they also stand to make excellent salaries. The BLS projects the actuarial science field will grow faster than average — 21% between 2021 and 2031. The BLS also reports that in May 2021, the median annual wage for all actuaries was $105,900, with median pay in top industries breaking down as follows:
- Government $110,590
- Finance and insurance: $110,000
- Professional, scientific, and technical: $101,600
- Management: $101,510
Also on the positive side, working in actuarial sciences often means having a significant impact on the company. The actuary’s analysis often helps solve complex problems that impact everyone in the company as well as the clients they serve. Decision-makers often set rates, goals, and make other crucial decisions based on the predictions.
Finally, actuarial sciences is often considered a low-stress job. While an actuary makes predictions that are critical to business functions, the job usually doesn’t require a lot of overtime, long work days, or travel.
Cons of Working in Actuarial Sciences
Like many jobs, working as an actuary requires a bachelor’s degree. However, in addition to completing your degree, you’ll also have to pass a series of exams. While you can work as an entry-level actuary after passing one or two exams, you eventually need to pass all of them, and that can take up to 10 years.
Another possible con (depending on your perspective) is that much of the work is completed independently. While actuaries collaborate with others to get data or present their findings, a majority of the analysis and day-to-day of the job is done alone.
Finally, because leaders use the predictions to make significant decisions for the entire company, this career field may not be for everyone. Though an actuary uses scientific rigor, math, and statistics to analyze and predict the most likely outcome, sometimes the prediction is wrong. Despite the fact that the actuarial science field is often described as “low-stress,” for some people, the idea of predicting incorrectly could be too stressful for them.
Get noticed by top recruiters
Image credit: thodonal / Depositphotos.com