Is an Actuarial Science Degree Worth It?

actuarial science

Key Takeaways 

  • An actuarial science degree is a gateway to a lucrative, in-demand career for those with strong math and analytical skills.
  • The path to becoming an actuary is rigorous, with a heavy emphasis on passing specialized exams for career advancement.
  • Actuarial science degrees are specialized, and students should be prepared for a career focused on risk assessment and management.

    Understanding an Actuarial Science Degree

    Actuarial science is a discipline used in the assessment of financial risks. Actuaries use mathematical and statistical methods in their risk assessments. The process includes defining, analyzing, and solving the financial implications of future events. 

    Most actuarial science degree jobs are in the insurance and finance industries. These industries feature uncertain environments that put their financial investments at risk. This is where actuaries use their skills in risk management.   

    Actuaries perform the following roles and responsibilities in risk management: 

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    • Identify and assess the present and potential organizational risks
    • Estimate the financial implications of  these organizational risks 
    • Recommend risk mitigation strategies in the reduction of an organization’s risk exposure 
    • Ensure compliance with risk-related government-mandated rules and regulations 

    In the insurance industry,  actuaries aid in setting premiums and calculating claims amounts. Insurance plans cover cyberattacks, natural and manmade disasters, and health issues. When clients file claims, insurance companies must estimate the financial costs.   

    Actuarial science also plays a vital role in the finance industry. Pension management is among the finance sectors where actuaries use their specialist skills. 

    But it isn’t only the insurance and finance industries where actuaries work either. Actuaries work in government agencies and corporations, too. 

    Actuarial science is valuable in determining the sustainability and stability of government programs. Corporations use actuarial science to meet their corporate social responsibility goals. 

    Why earn an actuarial science degree in the first place? The best reason is its value in building a strong foundation for a successful career. With an actuarial degree, more job opportunities in the actuarial field are accessible. 

    To be more specific, earning an actuarial degree brings many benefits. 

    • Gain specialized technical knowledge and skills.

    Actuarial science is a specialized discipline with an emphasis on quantitative skills. If you’re interested in it, you must engage in formal education. While you can engage in self-study, employers prefer a bachelor’s degree, at least. A bachelor’s degree shows your comprehensive understanding of actuarial science.

    Students develop proficient technical skills during their studies, too. These include skillful use of spreadsheet applications, statistical software, and programming languages. These applications are vital in complex data analysis, risk assessment, and model development. 

    • Prepare for professional examinations. 

    Actuaries are also certified professionals with a bachelor’s degree. No bachelor’s degree, no professional exam. Think of the courses as effective actuarial exam preparation. 

    • Develop soft skills.

    Actuarial science isn’t only about hard skills. Successful actuaries have strong critical and analytical thinking skills, too. Their rigorous formal education and training contributed to their soft skills development. 

    • Gain industry-relevant work experience. 

    The best actuarial science programs offer hands-on learning opportunities. Students take part in cooperative education and internships in diverse industries. These workplace experiences boost their competence and confidence and build their network. 

    The bottom line: Between formal study and self-study, the former is best. 

    Degree Levels in Actuarial Science and Their Educational Scope

    If you’re interested in an actuarial science career, consider these degree levels.

    Bachelor’s Degree

    Students gain a comprehensive understanding of actuarial science. General education courses are vital for a well-rounded education. Core courses are in math, statistics, business, and finance. Actuarial science-specific courses cover risk assessment and management topics. Computer science courses discuss software tools and programming languages.

    The courses prepare students for success in the SOA and CAS certification exams. The courses include financial math, probability statistics, and models for financial economics.

    Master’s Degree

    Students focus on advanced courses in actuarial models, statistical methods, and predictive modeling. Professional development courses emphasize professionalism, ethics, and soft skills development. 

    Students focus on advanced courses in actuarial models, statistical methods, and predictive modeling. Professional development courses emphasize professionalism, ethics, and soft skills development. 

    The rigorous curriculum prepares students for upper-level exams, including: 

    • Exam C (Actuarial models assessment) 
    • Exam MFE (Financial Economics) 
    • Exam MLC (Life contingencies) 

    Students also complete research and capstone projects. Internships are typical, too. 

    Professional Certifications

    The field of actuarial science has two professional organizations:

    • The Society of Actuaries (SOA) certifies actuaries specializing in life and health insurance. Actuaries working in the investments, finance, and retirement sectors also seek SOA certification.
    • The Casualty Actuarial Society (CAS)  certifies actuaries in the property and casualty sector. These include commercial, homeowners, automobile, and workers’ compensation insurance.

    Candidates for either credential must meet academic standards and pass certification exams. Attendance in professionalism-related seminars is also a must.

    Both SOA and CAS offer two levels of certification – associate and fellow. Note that it can take up to seven years to earn associate-level certification. Then, several more years for the fellow-level certification.

    Career Prospects for Actuarial Science Graduates

    The actuary salary potential ranges between $75,380 and $209,310+ per year (May 2023). The median annual wage of $120,000 is among the highest among all occupations. 

    So, is an online actuarial science degree worth it? Yes, it is. With these annual salaries, you can recoup your investment and enjoy good ROI in a few years. 

    As mentioned above, actuaries are experts in risk analysis, reduction, and management. The roles and responsibilities vary depending on their actuarial science career path. 

    Actuaries can choose from several specializations, including: 

    • Health insurance 
    • Life insurance 
    • Property and casualty insurance 
    • Enterprise risk management 
    • Retirement benefits and pension 
    • Public sector 

    Their most popular workplaces are the insurance and finance industries. Many also work in professional, scientific, and technical services companies. Government agencies and consulting firms also hire actuaries. Being able to work as a consultant is also a popular path. 

    If you have an actuarial science degree, you can consider these alternative careers: 

    • Auditors 
    • Data analysts
    • Financial planners 
    • Business analysts 
    • Risk analysts 
    • Underwriters 

    What are the best places for actuaries? The states with the highest employment levels are: 

    • New York
    • Pennsylvania
    • Illinois
    • New Jersey
    • Ohio

    But you can establish a successful career wherever you like. The trick is to leverage your bachelor’s degree and practical experience. You must also earn a professional certification, preferably before graduation. 

    Be sure to take advantage of internship opportunities. You will have opportunities to: 

    • Apply your knowledge and develop your hard skills 
    • Strengthen your soft skills 
    • Get insider insights and industry exposure 
    • Expand your network 

    With both internship and certification, your employment prospects improve. 

    Weighing the Benefits and Drawbacks of an Actuarial Science Degree

    Of course, actuarial science isn’t for everybody, especially since it’s a STEM field. You must consider the pros and cons of earning an actuarial science degree.

    Benefits

    • High demand 

    The projected employment growth for actuaries is 23% (2022-2032). Actuaries are in high demand in diverse industries, too, in the public and private sectors. The need among businesses for effective risk management also drives demand. High demand means a stable job market and low unemployment risk. 

    • High earning potential 

    With six-figure salaries, actuaries enjoy a good quality of life. As they gain more work experience and credentials, their earning potential increases. Actuaries also receive bonuses, health insurance benefits, and profit-sharing benefits. 

    • Clear-cut career path 

    Actuarial science students usually have a clear vision of their career path. While alternative careers are possible, being an actuary is the primary goal. There’s a clear progression, too, from college to career. You start by earning a bachelor’s degree and taking part in a training program. Then, you obtain a professional certification and engage in continuing education. 

    Drawbacks

    • Rigorous STEM-based curriculum 

    You must have strong STEM skills, particularly in math and statistics. 

    • Challenging certification exams 

    Low pass rates are common in actuarial certification exams. Plus, it can take several years to earn the first certification level. 

    • Limited career flexibility 

    The specialized nature of actuarial science can limit your career options. Actuaries are also subject to high-stress work environments. 

    So, yes, an actuarial degree is worth it. But you must prepare for the challenges ahead and set realistic expectations. 

    Making an Informed Decision: Is Actuarial Science the Right Fit for You?

    Start by engaging in a self-assessment of your strengths and weaknesses. 

    • Are you proficient in math and statistics? 
    • Do you like solving math problems? 
    • Are you a strong analytical thinker? 

    If you are, then actuarial science may be a good choice. 

    Consider taking college-level math and statistics classes in your senior year in high school. Probability and calculus are great options. If you perform well, an actuarial science degree may be a good fit. You can also discuss your STEM skills with your teachers and advisors. 

    Talk to current students and actuaries, if possible. Ask for information from actuarial science degree programs. Read the course descriptions and learning outcomes. You’ll have a better understanding of the challenges of actuarial science. 

    What if actuarial science isn’t for you? Don’t despair. You can pursue alternative careers in economics, finance, and data science. These are rewarding careers that deal with STEM topics, too. 

    Whatever your choice, remember that earning a bachelor’s degree brings many benefits. That alone should be enough reason.