An actuary specializes in evaluating the financial implications of risk and uncertainty, devising solutions to reduce the likelihood of undesirable events and decrease the negative consequences of such events when they occur.
Becoming an actuary is another option. According to the Bureau of Labor Statistics, the profession boasted a median wage of $111,030 in the U.S. in 2020 and a job growth outlook of 24% between 2020 and 2030. Below is an outline of the majors that an actuary typically studies as well as the top five skills needed to be successful in this profession.
What Actuaries Study
To become an actuary, you will need, at minimum, a bachelor’s degree. The most direct route is to major in actuarial science, a course of study that consists of math, statistics, and industry-related topics. However, other quantitative majors can produce well-qualified candidates as well. These majors typically include computer science, economics, mathematics, physics, and statistics, among others.
Essentially, any major that includes substantial coursework in mathematics, statistics, business, management, accounting, economics, finance, and computer programming should be sufficient preparation for an actuarial career. However, an education that also includes the humanities, especially English, would be highly beneficial. Actuaries should also know about topics such as law and government and must be able to communicate effectively in writing and speech.
The median wage of an actuary in 2020.
Top Five Skills of an Actuary
Actuaries need a wide range of skills to be successful. Five of the most important are listed below.
1. Analytical Problem Solving Skills
Actuaries need to be analytical problem solvers as their tasks include examining complex data and identifying patterns and trends to determine which factors are responsible for specific outcomes. After evaluating and weighing the significance of these factors, actuaries look for ways to minimize the likelihood of undesirable outcomes or the cost of the realization of an undesirable outcome.
2. Math and Numeracy Skills
Actuaries deal with numbers, so being able to do basic arithmetic quickly and correctly is a definite requirement. However, the math associated with actuarial science can be more complicated. Knowledge of calculus, statistics, and probability are also essential since actuaries quantify risk and determine the probable likelihood of certain events.
3. Computer Skills
Computers and a variety of statistical modeling software are the tools of the actuary trade. Actuaries frequently use models and tables to evaluate large amounts of data. Not only are basic computer skills and a knowledge of Microsoft Office absolutely essential, but being able to program in a statistical programming language is also a necessity.
4. Knowledge of Business and Finance
Businesses, financial institutions, and insurance companies often employ actuaries. As such, they are responsible for evaluating insurance or pension plans, advising businesses on how to limit exposure to financial risk, and providing banks with expert opinions on maximizing returns for a variety of investment products. This requires a sound understanding of business and financial concepts.
5. Communication and Interpersonal Skills
Actuaries often collaborate with various personnel, including programmers, accountants, and senior management, which makes it imperative that they can communicate and work effectively with others. Strong oral communication skills enable actuaries to explain complex technical and statistical details to a diverse audience, while solid writing skills ensure that findings and solutions are easily understood in memos and written reports.
Actuaries also often lead teams on a variety of projects and thus must be able to handle an assortment of personalities.
The Bottom Line
From the above list, it appears that you need to be good at just about everything to be an actuary. A number of these skills can be learned through on-the-job training or an internship. Given that the number of actuary positions is projected to increase at an above-average rate over the next years, having the right attitude and an aptitude for the skills mentioned above may be just enough to land you that rewarding job.