Today’s students are encouraged to acquire skills in science, technology, engineering and mathematics (STEM) related disciplines, and the employment outlook for actuaries may be just the incentive that some students need to challenge themselves in their STEM studies.
Actuaries evaluate the likelihood that certain significant events will occur, and they seek to reduce the negative impacts that those events tend to cause for their employers or clients.
Any organization whose products or services involve risk must employ actuary science skills to stay in business. The best example of the work done by actuaries is the pricing, terms and conditions for home owners insurance. Actuaries help insurance companies to set prices for these insurance products that garner nice corporate profits and cover repair costs to homes when negative events like hurricanes and hail storms occur. Banks and investment firms use the services of actuaries to help establish pricing strategies for their financial products and to conduct quantitative risk analysis. Actuaries also work as consultants who help companies to generate employee pensions.
Here are some of the details about projected job growth, career development and compensation for actuaries.
Projected Job Growth for Actuaries
According to the Bureau of Labor Statistics (BLS), the estimated job growth rate for actuaries is much faster than the average rate for all jobs that the agency surveyed in 2014. The total number of actuary jobs in the United States (U.S.) that the BLS recorded in 2014 was 24,600, and this modest figure gives a good indication of the select nature of this group of mathematicians. A greater than average percentage rate of job growth for the actuary role is expected partially because the current number of actuary jobs within the U.S. is relatively limited. The states where actuaries can find the highest number of jobs are New York, Pennsylvania, California, Illinois and Texas.
Professional Development for Actuaries
Besides gaining an undergraduate degree in business, mathematics or actuarial science, an aspiring actuary must pass a group of finance related tests that are administered by private, professional associations for actuaries. The Casualty Actuarial Society encourages membership of actuaries who specialize in performing quantitative risk analysis for casualty and property insurance, and their nine competency exams are tailored for the insurance industry. The Society of Actuaries offers membership to actuaries who work in all types of industries, and their five examinations focus on financial mathematics and statistical modeling of risk events.
Salary Information for Actuaries
According to the BLS, the mean annual wage that actuaries earned in 2015 was $110,560. The BLS data indicated that most actuaries were employed with insurance carriers, but these actuaries made slightly less than the mean wage; their mean salaries were $105,880 annually. The actuaries who commanded the highest salaries worked for financial services, mortgage lenders and brokerage firms. Their mean annual salaries reached above $152,000. Successful completion of actuarial exams are prerequisites for employment, and entry level actuaries usually have passed one or two of the exams to gain initial employment. Once these actuaries are hired, employers often agree to pay for subsequent exams. Passing scores on the exams result in greater job security, raises and bonuses.
The field of actuary science incorporates the fundamentals of the business environment, deep statistical knowledge and insight into human behavior. Besides developing pricing strategies for existing financial products, many actuaries are encouraged to design innovative products that satisfy consumers’ desires for varying levels of financial security and that support the profitability goals of the organizations for which the actuaries work. As new risks emerge, it is likely that the employment outlook for actuaries will continue to improve.