Becoming an Actuary: Salary, Outlook, and More

Actuaries are professionals who formulate risk assessments based on past and present data. The role involves mathematics, data analysis, statistics, and the ability to communicate information clearly. This information is used for insurance purposes as well as solving business problems to avoid losing money.

Actuaries are now in demand more than ever. Over the next ten years, demand is expected to grow by as much as 24% making the role of an actuary a great career move.

The role of an actuary

Actuaries will typically work for banks, consultancies, pension companies, and other financial institutions as well as insurance companies. An actuary can also find employment in the public sector through government offices and hospitals.

The job itself involves using software, mathematics, and theory to analyze data and advise customers or businesses on financial decisions. The main function of the role is to clarify the risks and benefits involved in certain business decisions or life events.

The typical sectors actuaries operate within include:

• Insurance
• Investment
• Pensions
• Consultancy

Skills needed to be an actuary

Good actuaries are natural problem-solvers that have logical minds. They will demonstrate strong analytical skills that are useful for identifying trends and patterns within data.

Skills that actuaries should have include:

• Mathematically-minded: being an actuary involves dealing with a lot of numbers. Those who feel comfortable with mathematics will find actuarial work a lot easier than those who don’t.
  

• Analytical: actuaries tend to be people who can pick apart data and identify important elements intuitively. With the help of software and scientific modeling, this analytical mindset can be turned into actionable information.
  

• Collaborative skills: actuaries will typically work as part of a larger team or as a dedicated branch within a company. This means being able to work well alongside others is a must.
  

• Ability to communicate clearly: data can be confusing and it’s an actuary's role to turn the science of risk assessment and analysis into something non-actuaries can understand.
  

• Excel: as actuarial work involves large data sets, the ability to use Excel or other spreadsheet software is a must. Actuaries will perform complex functions using spreadsheets to help make data usable.
  

• Organized: actuaries will typically have multiple tasks on the go at once meaning they should possess good time-management skills and the ability to meet deadlines without fail.

Typical actuary activities

The average workday of an actuary will involve some of the following:

• Research: one of the main activities of an actuary is to collect and sort data for the creation of reports. The data collected will depend on the sector they work in. For example, an actuary for a car insurance company might look at a range of data points in different areas such as the length of car ownership, seatbelt use, average crime rate, mileage, and ages.
  

• Create models and reports: this data can then be collated and turned into useful information using modeling software. This is used to turn data into human-readable charts and graphs. These can then be used to predict future trends and identify patterns within the data.
  

• Advise: using these models and reports, actuaries will advise companies and clients on decisions such as policy pricing. Actuaries, then, can help companies to price effectively while not exposing themselves to too much risk.
  

• De-risk: actuaries are also employed to help companies de-risk by predicting the likelihood of events, and the impact this would have. For example, how a home insurance company can best prepare for a natural disaster such as flooding or worse.

Becoming an actuary

While there are some apprenticeship roles available, most actuaries will have a degree in a related field. The most common route into becoming an actuary is through a university course, obtaining a relevant degree at a 2:1 grade or higher. Becoming a fully-certified actuary involves sitting several exams set by the IFoA (Institute and Faculty of Actuaries).

Companies looking to train actuaries  will typically be looking for the following degrees:

• Actuarial science
• Actuarial mathematics
• Economics
• Mathematics
• Statistics
• Risk management
• Business/Finance
• Science-based degrees
  

If you have decided actuarial work is for you, look for a degree accredited by the IFoA, an organisation that represents professional actuaries.

There are also a number of post-graduate diplomas that can be taken such as actuarial science. These courses can sometimes skip some of the core technical subjects with knowledge pre-assumed.

Salary and working hours

Actuaries typically earn above the average wage with a good starting salary.

New actuaries can expect to earn around £28,000 per year. With some experience, this moves to an average salary of £62,000 per year. Senior risk assessment actuaries can earn upwards of £100,000 per year.

Actuary work is typically office-based. This means working between 37-39 hours per week between the hours of 8 am and 6 pm.

Actuary career prospects

The career path of an actuary will typically involve taking on more responsibilities and managing teams within an organisation. As actuaries have a firm grasp of the impact of big decisions, they can often find themselves popular choices for senior roles in a company.

Higher-paid actuaries will be those who specialise in a certain field and excel within it. Technical analysis, for example, is a highly sought-after skill that can lead to the best actuaries being headhunted by various firms.

One area that actuaries are finding success is within the finance and banking sectors. Here, where capital can be at risk, the analytical skills of actuaries are highly-valued with many businesses paying highly-lucrative salaries to better understand the risks involved with financial dealings.

Conclusion

Becoming an actuary is a well-paid career choice that is becoming increasingly in demand. Actuaries will take data, identify patterns, trends, and key facts and turn this into actionable information for clients and employers. The role has great prospects and is considered a challenging but rewarding path.