Good at Math? Actuarial Science may be the Career for You.

An actuary is a business professional who applies mathematics and statistics to the design and management of insurance and retirement systems. Below, we provide a brief introduction to this profession. Your mathematics teachers or guidance counselor may also have more information. Further, visit the web site BeAnActuary - this site is brought to you by the two leading professional actuarial associations in North America, the Society of Actuaries and the Casualty Actuarial Society. We also recommend going to a site sponsored by the Bureau of Labor Statistics on the actuarial profession. They keep the latest national statistics on employment prospects!

• What is an Actuary
• Qualification as an Actuary
• Actuarial Professional Exams

What is an Actuary

Actuarial science is concerned with the random events that affect human life or property and the financial impact that the occurrence of one of those events may have. In the case of human life, those events include birth, death, marriage, sickness, accident, disability, and retirement. In the case of property, events such as fire, windstorm, accident, flood, theft, and fraud may be involved.

An actuary is trained to analyze the risk of occurrence of those events, to estimate their probabilities of occurrence, and to construct financial security programs that alleviate their financial impact. An actuary combines the probabilities of occurrence of those events with the rates of return on investment to determine premiums, reserves, and other financial quantities required in the management and regulation of insurance and pension systems.

An actuary must have sound knowledge of mathematics, especially mathematical probability and statistics, and should be familiar with economics, computer science, and the business environment generally. In particular, the actuary must have a theoretical and practical knowledge of the insurance business.

In addition to a strong foundation in mathematics, an actuary will ideally possess the decision making and persuasive skills required of executives and managers, especially the ability to communicate with others, to understand and work with them.

Many actuaries are employed by insurance companies. Others are in consulting practice, providing actuarial services to smaller insurance companies, banks, labor unions, and a variety of business firms. Still others are employed by governments in regulating the insurance and pension industries and in providing actuarial guidance to social insurance systems.

Through its contributions to the insurance and pension industries, the actuarial profession has and will continue to play a vital role in the nation's economy. Starting salaries for actuaries are attractive and increase substantially as experience is gained and responsibility assumed. Many actuaries reach high level executive positions and command high salaries.

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Qualification as an Actuary

Recognition as an actuary is achieved by qualifying for membership in a professional actuarial organization. The largest organization in the United States and Canada is the Society of Actuaries (SoA) in which membership is achieved by examinations. The members of this organization are concerned primarily with life and health insurance as well as retirement systems.

There are two levels of membership in the Society of Actuaries, Associate (ASA) and Fellow (FSA). Membership as an Associate is achieved upon successful completion of several hours of examination on basic subjects ranging from calculus to option pricing theory. Membership as a Fellow is obtained upon successful completion of additional examinations dealing with the political, legal and economic environments within which the insurance and retirement systems operate, as well as the techniques and procedures of actuarial practice.

A second actuarial organization is the Casualty Actuarial Society (CAS) whose members are concerned primarily with property and liability insurance. Membership in the CAS is also by examination. There are two levels of membership Associate (ACAS) and Fellow (FCAS). Three of the first four examinations are the same in the Casualty Actuarial Society and the Society of Actuaries, and are jointly prepared and administered by the two organizations.

Other actuarial organizations include the American Academy of Actuaries, the Conference of Consulting Actuaries, and the Canadian Institute of Actuaries all of which co-sponsor the examinations of the Society of Actuaries and the American Academy of Pension Actuaries (ASPA), which administers its own examinations for membership qualification.

The first two examinations for the Society of Actuaries and the Casualty Actuarial Society cover calculus, probability, risk management, economics and finance. Preparatory course work on those subjects is available at almost all colleges and universities. Subsequent examinations cover specialized topics for which preparatory course work is available only at a small number of universities that have actuarial science programs. The University of Wisconsin Madison offers courses that specifically covers the first four examinations and indirectly covers many portions of the latter Associateship examinations.

The fellowship examinations of the SoA and the CAS are on topics not ordinarily covered in university courses. Candidates usually prepare for them via programs of self study after taking employment and gaining experience. Students can expect to spend a period of several years after graduation from a university before attaining the Fellowship designation.

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Actuarial Science Curriculum Related Professional Exams