Skills and Abilities needed by an Actuary

The skill required to become a successful actuary are as given below.

• Has to have advanced skills in maths and statistics.
• Must be able to interpret and analyse data.
• Must have good communication skills both written and oral.
• Must have sound judgement and good business skills.
• Must have a logical approach to solve problems.
• Must have excellent computer skills required for assimilating and analysing data.
• Not only must they have an eye for detail but also should have the ability to see the bigger picture.
• Must have the ability to work individually as well as with a team.

Educational requirements of an actuary

To become an actuary a person requires being very strong in mathematics, statistics and general business.

A bachelor’s degree is the minimum along with other certifications to work as an actuary.

• Actuaries obtain an undergraduate degree with subjects such as mathematics, statistics and actuarial science along with courses in business related fields such as economics, corporate finance and applied statistics.
• To gain professional experience prior to their graduation, many prospective actuaries take on internships.
• The actuarial science program is offered by more than 100 colleges and universities and they also grant degrees in mathematics, economics, statistics or finance.
• A high level of computer literacy is required to manoeuvre around statistical data and analysis.
• Some employers also want their prospective candidates to also have an MBA.

Duties and Responsibilities of an Actuary

The duties and responsibilities of an actuary vary with the industry that they are working in.

If they are working in insurance they would have a different set of duties, if they work for a pension fund then their duties are different, if they work in a financial institution then they would have another set of duties.

Duties and responsibilities also differ according to their employer type.

The general duties and responsibilities of an actuary working in any sector or industry have been enumerated below.

• In the life insurance and health fields the duty of an actuary is to develop long-term care insurance policies by analysing data and forecasting the likelihood of the incidence of diabetes, heart disease, cancer, stroke and any other chronic ailments.
• It is their duty to study a particular group of people who have certain common factors such as living in a particular area or family history of such diseases and then come out with the necessary statistics.
• In the financial sector whenever corporates intend to come out with security offerings, actuaries manage credit and helping set a price for these securities.
• They also help the firms they are working with to develop and formulate new investment tools to help those financial corporate to compete with others in the industry.
• The Employees Retirement Income Security Act (ERISA) 1974 is the agency which sets the minimum standards for pension and health plans in private industry and the pension actuaries’ work under these provisions set by them.
• Social Security and Medicare programs are run by the government and actuaries help in managing such social programs.

About Actuaries

An actuary is a very essential employee as they are the ones who assess future risks, make price decision and devise investment strategy. They have excellent knowledge of finance, statistics and business and based on that knowledge they determine the risk of an event happening and help to create policies for clients and businesses that would reduce the cost of that risk. These are the qualities required in the insurance industry, and are also necessary to formulate financial and pension plans and see that these plans are maintained on sound financial foundation.

In the insurance field most actuaries specialize in health, life or property and casualty insurance, while others work in employee benefits or finance. Because they have a widened knowledge of business and mathematics they use those skills in risk classification, investment or pension planning. Irrespective of the area of their work their basic job is to collate and analyze data for estimating the likelihood of an event taking place such as death sickness, disability, injury or loss of property.

Financial questions such as the level of pension contribution to result in a certain retirement income plan and how a company should invest in view of the potential risk whereby maximising profit on investments, are attended by them. They advice on the determination of company policies and also explain complex technical matters in an easily understandable manner to company executives, shareholders, government officials, policy holders or the people in general. They are asked to testify in front of government agencies of the likelihood of a proposed legislation and the effect it would have on businesses and even explain the changes in contract provision to their clients or customers.

Salary and Earnings of an Actuary

The salary of an actuary is dependent on various factors such as the years of experience they have gained, the industry that they work in, the employer type that they work for or the city that they work in.

• Years of Experience

• Experience of less than one year the salary range is between $ 39,323 and $ 64,852 and the hourly wage range is between $ 8.56 and $ 49.66.
• Experience between one to four years the salary range is between $ 44,897 and $ 88,726 and the hourly wage range is between $ 13.50 and $ 23.12.
• Experience between five to nine years the salary range is between $ 60,054 and $ 123,402.
• Experience between ten to nineteen years the salary range is between $ 79,813 and $ 160,908.
• Experience of more than twenty years the salary range is between $ 82,168 and $ 201,273.

• Industry
  • An actuary working in an insurance company gets an annual salary range between $ 47,638 and $ 139,963 and an hourly wage rate between $ 21.55and $ 49.13.
  • An actuary working in health insurance gets an annual salary range between $ 49,466 and $ 132,894.
  • An actuary working in an consultancy gets an annual salary range between $ 54,198 and $ 141,622.
  • An actuary working in human resources consulting services gets an annual salary range between $ 57,673 and $ 139,284.
  • An actuary working in business consulting gets an annual salary range between $ 43,328 and $ 154,742.
  • An actuary working in financial services gets an annual salary range between $ 41,612 and $ 151,521.
  • An actuary working in healthcare gets an annual salary range between $ 44,042 and $ 127,661.

• Employer Type

• An actuary working for a company gets an annual salary range between $ 48,286 and $ 141,678 and an hourly wage rate between $ 12.08 and $ 51.06.
• An actuary working for a private practice or firm gets an annual salary range between $ 46,340 and $ 145,770.
• An actuary working for a government – state and local gets an annual salary range between $ 35,230 and $ 123,533.
• An actuary working for a non – profit organization gets an annual salary range between $ 39,672 and $ 128,822.
• An actuary working for other organization gets an annual salary range between $ 41,217 and $ 150,285.
• An actuary working for a government – federal gets an annual salary range between $ 52,852 and $ 158,927.
• An actuary working for a college or university gets an annual salary range between $ 40,000 and $ 61,145.

• City

• An actuary working in New York, New York gets an annual salary range between $ 49,147 and $ 147,373.
• An actuary working in Chicago, Illinois gets an annual salary range between $ 51,792 and $ 152,971.
• An actuary working in Hartford, Connecticut gets an annual salary range between $ 49,492 and $ 147,650.
• An actuary working in Boston, Massachusetts gets an annual salary range between $ 48,479 and $ 142,431.
• An actuary working in Atlanta, Georgia gets an annual salary range between $ 41,018 and $ 137,050.
• An actuary working in Minneapolis, Minnesota gets an annual salary range between $ 49,329 and $ 154,637.
• An actuary working in Philadelphia, Pennsylvania gets an annual salary range between $ 50,111and $ 129,128.

Certification and Licensure needed for the Actuary Professional

Society of Actuaries (SOA) and Casualty Actuarial Society (CAS) are the two professional societies which give full professional status in their profession.

• SOA or Society of Actuaries certifies an actuary in health benefits system, life insurance, finance and investments, and retirement systems.
• CSA or Casualty Actuarial Society offers certificates in the property and casualty field including homeowners, automobiles, medical practice, personal injury liability and workers compensation.
• The first four exams from the first seven initial that are required are common for both the certificates which test the skills of an actuary in mathematics and helps to judge their worth as an actuary.
• This is advantageous as candidates can decide later which certificate they want to opt for.
• These initial exams can be taken while still in college and those who pass two or more exams have a better opportunity at a higher salary than those who do not.
• The Casualty Actuarial Society is predominantly an exam based certification and the first level of certification is of an Associate or ACAS level for which seven exams have to be completed and attend a course on professionalism.
• The course work includes corporate finance, applied statistics and economics which is required by both Society of Actuaries and Casualty Actuarial Society.
• This process takes four to eight years.
• The next step is for the Fellowship FCAS which additionally requires two more exams to be passed in advanced topics and includes valuation of insurance, investment and assets and dynamic financial analysis.
• This stage takes between two to three years after passing the Associate stage.
• The Society of Actuaries program has a blend of exams and computer learning modules along with coursework.
• After completing the initial exam the candidates must choose which slot they want to opt for viz. group and health benefits, benefits pertaining to retirement, whether they want to work in annuities and individual life or in risk management of investments or business and finance.
• To gain credential as an Associate in Society of Actuaries the courses necessary to be done are as follows. Pass the first five exams.
• Completion of coursework in subjects such as corporate finance, applied statistics and economics.
• Write a couple of essays along with a seminar in professionalism after the completion of eight computer modules.
• One would have to devote four to eight years of their life to complete this process.
• To achieve the Fellowship or FSA level one must pass more exams of the specialty chosen by them, three of the computer modules to be finished followed by a seminar in professionalism and lastly finishing a course which encompasses fellowship admissions.
• After becoming an Associate a candidate would have to spend another two to three years to achieve a Fellowship.