What is an Actuary?
An actuary is one of the business specialists that is managing the risks and the uncertainties. With their analytical skills, actuaries help organizations and business to plan their future and to protect themselves from any loss. Actuaries play a very important role in the physical, psychological and financial stability of the society through the understanding they have upon the factors and the nature of risks.
The statistics are compiled and analyzed by these professionals and use the information in order to make the necessary calculation of the premiums and insurance risks for various companies and businesses.
In 2015, in the US, the estimated income for Actuaries was $97,072 per year with an hourly wage that was estimated at $46.68 per hour, according the U.S. Bureau of Labor Statistics. The points in the actuary salary increase and decrease are also according to the lower and higher estimated incomes. The lowest points in the earnings of these professionals are estimated at less than $58,291 per year and can have a higher point that climbs up to $180,510 per year and even higher.
The top paying industries for actuaries in 2015 were in Finance and Insurance, where the earnings reach at $97,912 per year, and Government with incomes of around $95,721 per year. The top paying industry that paid really well was in Professional, scientific and technical services that provided an annual salary that used to go up to $98,921 per year.
The earnings of these professionals also varied according to each state. For instance in Texas, an actuary could expect to earn around $101,742 per year, while in Colorado the earnings would have gone up to the highest economic point, reaching at $132,342 per year. Compared with the rest of the states in the US, the lowest income that was granted was registered in Utah, where the actuary salary that was achieved could have reached just $50,912 per year.
The actuary incomes registered by Seniority have also various values. For instance, a starting actuary could expect to earn around $58,292 per year, while a junior professional would have taken home around $73,010 per year. An experienced actuary had total annual earnings that have reached at $97,072 per year while a senior actuary could expect to earn somewhere around $136,132 per year. The top end earnings for these professionals reached usually at $180,510 per year and even higher.
Salary of an Actuary in 2016
For the year 2016, in the United States, the established median income of an actuary is estimated to reach at $81,579 per year, according to the salary data survey provided by PayScale. The starting point in the income of these professionals is estimated at $50,218 per year and climbs up to $134,790 per year. The bonuses that are usually granted can be comprised from $516 and up to $24,846 per year.
The actual profit sharing is estimated somewhere around $15,782 per year. This leads in the end to a total payment that starts from $50,436 per year and goes up to $152,489 per year. The main factors that influence the annual earnings for this group are linked with the years of experience in the field, followed by the geographical location as well as the type of employment.
The vast majority of individuals who work as actuaries are males rather than females. The skills that affect the most the incomes of these professionals are linked with Pricing, Financial Modeling, SAS as well as Financial Analysis.
The compensation of these professionals is influenced mainly by the years of experience in the field. Those with up to five years in the field will get to have an estimated income somewhere around $65,010 per year, while those with 5 and up to 10 years of working experience will gain around $103,010 per year.
The experienced actuaries with 10 and up to 20 years of work in the field and with plenty of experience will earn an income that reaches $128,010 per year, while the veterans in this career field, with over 20 years of knowledge and plenty of experience can expect to gain around $142,010 per year. When it comes to the geographical location, the national estimated average for actuaries is estimated to reach up to $85,312 per year.
The incomes vary according to each state, the level of the economic flux that is mainly influenced by two key factors that affect the earnings. The first one is the costs of living in each state, followed by the living expenses that are to be found in each particular region. Good incomes for actuaries can be found in locations in the US such as Des Moines, where the incomes get to $116,073 per year, followed closely by Hartford that will grant incomes estimated at $108,425 per year. Other locations that provided an above the average median income are to be found in Washington, Chicago, Boston, San Francisco and some others as well.
Actuary Salary in Canada, Australia and UK
- The average median income for actuary in Canada, is estimated to reach around C$78,291 per year, according to the salary data survey provided by PayScale. The starting point in the incomes of these professionals is estimated at C$48,881 per year and climbs up to C$118,362 per year. The granted bonuses tend to be comprised from C$1,004 per year and up to C$18,482 per year, while the profit sharing is between C$10.01 and up to C$4,873. Great incomes that are estimated beyond the national average can be found in Toronto, where the earnings tend to reach up at C$97,381 per year. Montreal also reports earnings that are above the national average, with incomes of C$82,173 per year.
- In Australia the median actuary income rises somewhere around AU$96,598 per year, with a starting point of AU$51,314 per year, rising up to AU$155,105 per year. The bonuses that are granted in this career field can reach up to AU$25,309 while the profit sharing that is obtained can go up to AU$9,827. A median total average in Melbourne for these professionals is estimated to reach at AU$99,056 per year.
- An actuary living and working in the UK can expect at an average granted medium income that falls somewhere around £52,309 per year. The starting point in the earnings of these professionals has an average of £29,587 per year that can go up to £82,246 per year. The bonuses that are received can vary from £1,002 and up to £15,442. The profit sharing can reach up to £6,984. The national average for actuaries is estimated at an average of £57,239 per year, London being one of the regions that offers these professionals salaries that go beyond the national average reaching at £60,249 per year.
Job Description of an Actuary
An actuary, as mentioned before, has a vital part in an insurance company. They are the so called analysts that help the company to figure out if they should issue the insurance policy of the company, if it is the right time and what the premiums of that policy should consist of or be. As one of these professionals, you’ll be required to use a huge amount of statistical analysis since you’ll be the one examining the data associated with costs and trends.
The main task inside of an insurance company if you are working for one as an actuary will be to keep the financial health of the company and manage the risks. These professionals are a great aid since they contribute with significant statistical data to the data models for the insurance companies they are working for. Then the next step will be the task of analyzing the associated effects on the insurance policies.
This will mainly include an examination of the incident data such as car accidents that range in auto insurance according to location or age. They will then adjust the terms and the necessary rates. With other words the main task of actuaries is to analyze the statistical data that usually can include mortality, sickness, accidents as well as retirement rates. With this obtained, actuaries usually construct tables of probability in order to predict the risks and liability for future benefits payment.
How to Become an Actuary?
A career in any field starts right out of high school. If you decided that what you want to become is an actuary, make sure that you take the correct educational path. Combining the classes in high school will provide you with a great advantage when starting college. Make sure that you take the preparatory program for college and put a strong emphasis on math, every year. Besides that, enroll in Aps classes or else known as Advanced Placement classes such as calculus and statistics that are very important in an actuary job.
Make sure that you develop computer skills such as SAS, SQL, Excel, as well as C++ and Access, you’ll need them in your future job. To increase your chances, attend to an actuarial school program during summer that will grant you the opportunity to find out more about your future career and will put you into contact with many industry specialists.
For your college applications its’ not necessary to attend one that has an actuarial curriculum, because you can be hired on a position as an actuary if you have a solid and strong background based upon topics such as math, statistics and finances. You might need to pass two exams that are probably exam P and FM that are seen as being the easiest ones.
After college graduation comes, another step that is some professional requirements as well as the E-Learning components and don’t forget about the rest of the actuarial exams. In order to be work as an actuary you’ll need to become certified that is usually provided by the CAS or else known as the Casualty Actuarial Society and by the SOA that is known as the Society of Actuaries. Choosing to become certified through CAS, will involve passing seven examinations while choosing your certification through the second one will require only five examinations. Each exam will require and involve hundreds of hours of study and getting prepared.
You can also choose the path of studying on your own. You can start by signing up for a trial account that is free in the fundamentals of actuarial practice and see on your own what this profession involves. With this free trial program, you can study actuarial science and then take the exams without going to college, or you can do it before you graduate college.
On-the-spot job experience is also a valuable asset and will help you on your future career as an actuary. This kind of experience can be gained through an internship. If you want to become an actuary and this profession wasn’t your first choice, you can change careers and become one.
First of all, make sure to weigh all pros and cons that this job involves. In order to be certified professionally, you’ll need to spend as an actuary at least 7 years of preparation and study or even more depending on the program that you choose to attend to. Since this is a very demanding industry, make sure that you have the stamina and that you can be very committed to the job.
You’ll also need to develop the right skills since actuaries have very good mathematical and analytical skills. You are also required to pass a very difficult exam before you could actually become one of these professionals. To find out what requirements you need to pass the examination, check the details on the website of CAS.
You might be very good at what you are doing in your current field but when changing careers you’ll start all over again. To get to the top have patience for it and learn all that you need for this job, just the way you did it with the other career.
Work Environment and Schedule
The most common working environment for an actuary is at a desk office. Even though on some positions such as being a consulting actuary it will mean traveling to various locations to meet with their clients, this means that their working days vary greatly and none looks the same.
Actuaries tend to have a typical working schedule that involves at least 40 hours per week, while those who work in the field of investment banking including the consulting Actuaries can expect to have a very unpredictable schedule. These kind of positions usually involve more than 40 hours per week. The positions in this career field allow individuals to obtain a good balance between the family life and the working life. The majority of actuaries usually work for insurance companies.
Pros and Cons of Being an Actuary
Any potential or future career has its pros and cons. It depends a lot to be informed about them and be able to carefully weigh them. For instance, a career in actuary provides you with a high salary, but in order to obtain it you’ll need to make sure that you’ve passed the right educational and certification requirements that usually are quite rigorous.
With a high salary you’ll find openings that are very competitive, you really need to be good in what you are doing and possess the required set of skills for this job. This type of job will put you right into the spot of a business environment, this meaning that you are a vital part for many financial companies and not only so any decision that you take can bring good things to the table or you could break a business or a company.
This amount of responsibilities will often lead to a lot of stress. The calculation, the analysis and the interpretation of those calculations need to be exact. By the nature of it, the analysis is subjective and since any number of factors could change the probability of something happening. The work that you are doing is often exhausting.
The educational path is also one that is very rigorous, this involving requirements such as high grade point average to be taken into consideration when searching for a job. This career also involves taking over the years some exams that need to be passed successfully.
Conclusion on Actuary Salary
A career as an actuary will take you to the top working directly with a lot of insurance companies and most of the time being surrounded by other business professionals.
This job requires a set of intensive skills such as math and statistical analysis. On you it depends the good health of an insurance company. The hours of work for this professionals will vary greatly according to the job that you have and the tasks that you are required to handle. An actuary income varies in other countries as well, according to the mentioned factors but also according to the geographical location and the type of employment. The great news for Actuaries is the fact that they can combine the family life with the working life.