How to Become an Actuary

Picture having the ability to look at huge amounts of financial data to find trends. Where many people might only see an endless ocean of data, you're able to see the patterns that help companies make informed financial decisions and manage their risk.

This is the power and responsibility of actuaries. But what exactly does an actuary do, and how can you become one?

What is an Actuary?

An actuary is someone who uses financial theory, math and statistics to help companies assess their financial risk and uncertainty, according to the U.S. Bureau of Labor Statistics (BLS).

For Jerry Tuttle, a mathematics and data analytics adjunct instructor at Southern New Hampshire University (SNHU), actuaries are the “mathematicians of the insurance industry.” In addition to teaching at SNHU, Tuttle is also a retired actuary who worked in insurance for 42 years.

“In some ways, actuarial work is very similar to the work that some data analysts do,” Tuttle said, “and actuaries consider themselves among the first data analysts.”

According to Tuttle, actuaries examine past claims history in order to make predictions about the cost of future claims, taking into account various factors such as economic trends and demographics, to name a few. Actuaries use complex mathematical models to help companies make strategic decisions that protect their financial stability.

In Tuttle’s experience, actuaries tend to specialize in one main category of insurance:

• Life insurance
• Health insurance
• Pensions
• Property and casualty (P&C) insurance

Tuttle’s own specialization as an actuary was in property and casualty insurance, where he worked with individuals, businesses and insurance companies.

“P&C insurance refers to property (things people or businesses own) and casualty (protecting people or businesses from financial loss when they are legally liable for the injuries they cause),” Tuttle said.

While Tuttle worked exclusively for insurance companies, he said that actuaries also work for insurance brokers, consulting firms, accounting firms, government agencies and other organizations that serve the insurance industry — as well as companies that have to manage their own risks, like car rentals for example.

What Does an Actuary Do?

Actuaries have big responsibilities to the companies and people they work for. The recommendations of an actuary can be the basis for a company's decisions.

According to the BLS, some responsibilities of an actuary include:

• Analyzing data and trends to predict financial impact or risk
• Developing strategies to minimize potential losses
• Communicating their findings to stakeholders

"Actuaries do the majority of the math work in private, but then they take it and discuss it with non-math people who make decisions on it," Tuttle said. He noted that after looking at the data and making conclusions, an actuary then often produces a written report where they explain the calculations they've done to other business professionals.

These reports provide insurance companies with valuable insights and recommendations so they can make informed financial decisions — even if they don’t see the results of those decisions until years down the line.

“As an SNHU instructor, I am required to grade assignments within a week,” Tuttle said. “Imagine if I did not grade assignments until a year, or five years or 10 years. That is the nature of actuarial work, where the final amounts of claims settlements are not known until a year, or five years, or more, and so it takes me this much time to get my final grade on the accuracy of my work.”

By utilizing their expertise in statistics and finance, actuaries play a key role in ensuring the long-term success and stability of insurance companies.

How Long Does It Take to Become an Actuary?

In order to become an actuary, you generally will need a bachelor’s degree, according to the BLS. This degree might be in a field like math, data analytics or business.

In addition to a bachelor’s degree, you may also need to pass actuarial exams proctored by either the Casualty Actuarial Society (CAS) or the Society of Actuaries (SOA), depending on what kind of insurance you plan to specialize in.

In Tuttle's experience, it's common to take a few actuarial exams while in college and the rest while working. "Like most professions, an actuarial trainee starts out doing mundane work as they learn about actuarial and insurance concepts," Tuttle said. "With experience and exams, an actuary will perform increasingly complex and interesting work."

Due to the amount of study and preparation needed to take the actuarial exams, according to the BLS, it can take an actuary up to seven years to achieve their associate-level certification, with additional years needed to reach fellowship status.

Are Actuarial Exams Hard?

When it comes to becoming an actuary, you might be concerned about the amount of math involved or how tough the exams might be.

“The actuarial exams are hard,” Tuttle said. To help you prepare, Tuttle said online resources like those from CAS or SOA can be helpful, depending on which organization is proctoring your exams.

Taking these exams are an important step in your actuarial journey, and passing them can open doors to new opportunities in the field.

"Students should take time to learn about the actuarial exam process, especially exams P (probability) and FM (financial mathematics)," Tuttle said. "It is extremely difficult to get a summer internship or a permanent position without one, or preferably two actuarial exams passed."

Are Actuaries in High Demand?

According to the BLS, the expected growth rate for actuaries between 2023 and 2033 is 22% — compared to the national average growth for all jobs, which is 4%.*

These numbers predict a significant demand for actuaries, which can make it an appealing field.* But in addition to the growing need or stability of actuary work, the job itself can be very rewarding.

“The world would function much differently without insurance to protect us," Tuttle said. "Most actuaries consider the work that they do to be intellectually stimulating, and we go home with a sense of contributing to society."

*Cited job growth projections may not reflect local and/or short-term economic or job conditions and do not guarantee actual job growth. Actual salaries and/or earning potential may be the result of a combination of factors including, but not limited to: years of experience, industry of employment, geographic location, and worker skill.

Meg Palmer ’18 is a writer and scholar by trade who loves reading, riding their bike and singing in a barbershop quartet. They earned their bachelor’s degree in English, language and literature at SNHU and their master’s degree in writing, rhetoric and discourse at DePaul University (’20). They are currently attending Northeastern University as a first-year PhD student studying English with a focus in rhetoric and digital humanities. While attending SNHU, Meg served as the editor-in-chief of the campus student newspaper, The Penmen Press, where they deepened their passion for writing. Connect with them on LinkedIn.