According to the Society of Actuaries and the Casualty Actuarial Society, there are no education requirements when it comes to becoming an actuary. Instead, both societies provide a list of suggested courses. Below explains what individual courses and programs are best for aspiring actuaries.
Students should have at least three semesters of calculus. A class on pre-calculus will review advanced algebra topics, such as equations, analytic geometry and trigonometric functions. Introductory calculus classes will teach students how to equate rates of change, use limit laws to find functional limitations and determine the operational effects of various graph properties. Students will also learn about basic derivatives, polynomial functions and chain rule rates. One semester of linear algebra is also recommended. This class will cover vector spaces, so students will know how to determine the basis of a subspace and the range of the matrix representation. This class will also teach about vector transformations and how to solve linear system applications.
Statistics and Probability
The actuary societies recommend two semesters of statistics and probability. Statistics courses will emphasize the practical applications of descriptive and inferential statistics. Students will learn the basic principles of collecting, analyzing and interpreting quantitative data. Students will learn about graphing and measures of center through using software to create frequency distributions and graphical displays. Basic competencies include knowing how to classify data, interpret graphs and distinguish between samples and populations. Probability classes will cover standard deviations, normal distributions and classical and relative frequency approaches. After studying probability, graduates will know how to compute and interpret probabilities and binomial experiments.
As many courses in finance are ideal for future actuaries. A basic financial planning course will instruct students how to prepare cash budgets, perform break-even analyses and calculate present and future values of cash flows. Students will learn about the interdependent relationships between strategic management and financial planning. After studying financial analysis, students will know how financial markets work and finance environments function. Classes on business finances will introduce students to the tools and techniques used to make financial decisions. Related to this, classes on capital budgeting and management will cover capital project risk analysis and working capital management techniques.
Any class related to the actuarial sciences is highly recommended. Students who study these courses will be able to demonstrate an impressive knowledge of the math and statistics that form the basis of actuarial calculations. These classes provide rare opportunities for students to master the computer tools and software skills required to successfully understand and analyze complex data. For example, a finance for actuaries class will touch on the basic models of corporate finance. This will include advanced topics such as internal rate of return, net present valuation and profitability index models. A class on actuarial statistics will include empirical, parametric and Bayesian estimations.
Successfully becoming an actuary will also require students to take microeconomics, macroeconomics and communication courses, such as business and technical writing. Business classes related to insurance, banking and marketing are also helpful.
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