What type of a degree does an actuary need?

Answer 1

Actuaries need a strong foundation in mathematics, statistics, and general business. They generally have a bachelor's degree and are required to pass a series of exams in order to become certified. Education and training. Actuaries need a strong background in mathematics and general business. Usually, actuaries earn an undergraduate degree in mathematics, statistics or actuarial science, or a business-related field such as finance, economics or business. While in college, students should complete coursework in economics, applied statistics and corporate finance, which is a requirement for professional certification. Furthermore, many students obtain internships to gain experience in the profession prior to graduation. About 100 colleges and universities offer an actuarial science program, and most offer a degree in mathematics, statistics, economics, or finance. Some companies hire applicants without specifying a major, provided that the applicant has a working knowledge of mathematics-including calculus, probability, and statistics-and has demonstrated this knowledge by passing one or two actuarial exams required for professional designation. Companies increasingly prefer well-rounded individuals who, in addition to having acquired a strong technical background, have some training in business and liberal arts and possess strong communication skills. Beginning actuaries often rotate among different jobs in an organization, such as marketing, underwriting, financial reporting and product development, to learn various actuarial operations and phases of insurance work. At first, they prepare data for actuarial projects or perform other simple tasks. As they gain experience, actuaries may supervise clerks, prepare correspondence, draft reports, and conduct research. They may move from one company to another early in their careers as they advance to higher positions. Licensure. Two professional societies sponsor programs leading to full professional status in their specialty: the Society of Actuaries (SOA) and the Casualty Actuarial Society (CAS). The SOA certifies actuaries in the fields of life insurance, health benefits systems, retirement systems, and finance and investment. The CAS gives a series of examinations in the property and casualty field, which includes car, homeowners, medical malpractice, workers compensation, and personal injury liability. Three of the first four exams in the SOA and CAS examination series are jointly sponsored by the two societies and cover the same material. For this reason, students do not need to commit themselves to a specialty until they have taken the initial examinations, which test an individual's competence in probability, statistics, and other branches of mathematics and finance. The first few examinations help students evaluate their potential as actuaries. Many prospective actuaries begin taking the exams in college with the help of self-study guides and courses. Those who pass one or more examinations have better opportunities for employment at higher starting salaries than those who do not. Many candidates find work as an actuary immediately after graduation and work through the certification process while gaining some experience in the field. In fact, many employers pay the examination fees and provide their employees time to study. As actuaries pass exams, they are often rewarded with a pay increase. Despite the fact that employers are supportive during the exam process, home study is necessary and many actuaries study for months to prepare for each exam. The process for gaining certification in the Casualty Actuarial Society is predominantly exam based. To reach the first level of certification, the Associate or ACAS level, a candidate must complete seven exams, attend one course on professionalism and complete the coursework in applied statistics, corporate finance, and economics required by both the SOA and CAS. This process generally takes from 4 to 6 years. The next level, the Fellowship or FCAS level, requires passing two additional exams in advanced topics, including investment and assets and dynamic financial analysis and the valuation of insurance. Most actuaries reach the fellowship level 2 to 3 years after attaining Associate status. The certification process of the Society of Actuaries blends exams with computer learning modules and coursework. After taking the initial exams, candidates must choose a specialty: group and health benefits, individual life and annuities, retirement benefits, pensions, investments or finance/enterprise risk management. To reach the Associate or ASA level, a candidate must complete the initial four exams, the coursework in applied statistics, corporate finance and economics required by the SOA and CAS, eight computer modules with two corresponding assessments and a course in professionalism. This process generally takes from 4 to 6 years. To attain the Fellowship or FSA level, a candidate must pass two additional exams within a chosen specialty and must complete three computer modules and a professionalism course. Attaining Fellowship status usually takes an additional 2 to 3 years after becoming an Associate. Specific requirements apply to pension actuaries, who verify the financial status of defined benefit pension plans for the Federal Government. These actuaries must be enrolled by the Joint Board of the U.S. Treasury Department and the U.S. Department of Labor for the Enrollment of Actuaries. To qualify for enrollment, applicants must meet certain experience and examination requirements, as stipulated by the Board. Other qualifications. In addition to knowledge of mathematics, computer skills are becoming increasingly important. Actuaries should be able to develop and use spreadsheets and databases, as well as standard statistical analysis software. Knowledge of computer programming languages, such as Visual Basic for Applications, SAS, or SQL, is also useful. To perform their duties effectively, actuaries must keep up with current economic and social trends and legislation, as well as with developments in health, business, and finance that could affect insurance or investment practices. Good communication and interpersonal skills also are important, particularly for prospective consulting actuaries. Advancement. Advancement depends largely on job performance and the number of actuarial examinations passed. Actuaries with a broad knowledge of the insurance, pension, investment, or employee benefits fields can rise to administrative and executive positions in their companies. Actuaries with supervisory ability may advance to management positions in other areas, such as underwriting, accounting, data processing, marketing, and advertising. Increasingly, actuaries with knowledge of business are beginning to rise to high-level positions within their companies, such as Chief Risk Officer, Chief Financial Officer, or other executive level positions. These generally require that actuaries use their abilities for assessing risk and apply it to the entire company as a whole. Furthermore, some experienced actuaries move into consulting, often by opening their own consulting firm. Some actuaries transfer to college and university faculty positions.

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