Actuaries apply mathematics, statistics, and field-specific knowledge to anticipate financial risk and predict the outcome of uncertain situations. While they use many of the same base skills and make similar considerations as accountants, actuaries adopt a slightly different perspective and strategy for gauging potential financial situations. Even though the profession doesn’t have strict formal educational requirements, significant on-the-job training and independent credentialing are often necessary for career advancement. While the occupation is still relatively small in total size, demand is expected to increase notably in the years ahead.
Job Functions and Responsibilities
Professional actuaries tend to specialize as they gain experience in a certain industry or practice. However, most of them still apply the same set of basic skills and knowledge to deliver value for their employers. Essentially, actuaries try to gauge the likelihood of certain outcomes based on data from past events. This practice follows the principles of actuarial science, which is primarily used in the insurance and finance industries. These jobs often incorporate elements of computer science to aid in complex calculations and render models based on the results.
Roles for Different Employers
A large portion of actuaries is employed in the insurance industry. These companies and organizations rely on their calculations to develop cost and coverage numbers that allow them to avoid unmanageable loss. Essentially, actuaries allow their employers to take calculated risks instead of just guessing and hoping for the best. Some large corporations and other businesses also employ actuaries to provide advice to leaders and decision-makers. They also serve vital roles in crafting workable retirement and pension plans, as well as dealing with issues related to health care costs.
Working as a Professional Actuary
The demand for actuaries is expected to increase much faster than the job average through 2026, but the total number of jobs is expected to remain below 30,000 across the United States, according to the U.S. Bureau of Labor Statistics. This means there are plenty of career options for qualified professionals, but taking advantage of them may require flexibility on location or field. Lifelong actuaries tend to find a specific niche or industry to specialize in, which can open up new career-building opportunities not available to a new practitioner. Actuaries are generally technology-driven office workers but have a bit more leverage and influence in their employer’s decision-making process than a typical corporate role.
Education and Professional Development
Since much of the skills and knowledge needed to be an actuary are learned on the job, applicants typically only have a bachelor’s degree to get started. An academic background in math or statistics is preferred, but not usually required. As actuaries gain professional experience, they often pursue official designations and certifications that prove their ability in a given niche or specialization. For example, enrolled actuaries are recognized by the Joint Board for the Enrollment of Actuaries to perform actuarial services related to the US Employee Retirement Income Security Act.
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Risk assessment and mitigation is an incredibly valuable service in many industries, but is particularly vital in insurance and finance. As this need is expected to grow in the years ahead, qualified actuaries can expect to retain their status as valuable and sought-after commodities on the job market.