How to become an actuary ace in 2024

Actuaries may not be able to see into the future, but they can come pretty close to predicting how much it will cost. And many companies are willing to pay 6-digit salaries to math whizzes with this skill. In this article, we provide a step-by-step guide on how to become an actuary.

Actuaries put a price tag on risk, helping companies measure potential losses and plan accordingly. As key professionals in the insurance industry, they calculate the potential financial impact of uncertain events.

Besides insurance companies, actuaries can also work at corporations, banks, consulting firms, investment firms, and government agencies. Some work at reinsurance companies – which insure other insurance companies. Who watches the watchman in the insurance sector? Actuaries, that’s who.

Steps to becoming an actuary

Actuaries need a bachelor’s in math, economics, finance, or a related field. However, to become a fully qualified “actuarial fellow”, you will need to pass 10 different exams.

Step 1 – Get a bachelor’s degree in a mathy subject.

Actuaries need to be good at math, so a number-crunching undergraduate major is a pre-requisite for landing a job. Consider studying finance, math, statistics, accounting, or economics.

While you can major in actuarial science as an undergrad, most experts don’t recommend it. Why? It doesn’t give you a backup plan: if you fail your actuarial exams or you can’t find a job placement, an actuarial science degree – unlike a degree in finance or accounting – isn’t very transferable.

» Read: Discover the most valuable finance degrees

Becoming an actuary does NOT require a master’s degree. You will have access to high-paying jobs without needing to invest time and money in grad school.

Step 2 – Get a summer internship (or 2)

Most aspiring actuaries complete their internship(s) in summer during college. An internship will give you a taste of the day-to-day life of an actuary while allowing you to improve your technical skills (namely Excel) and build your professional network. Actuary internships are usually paid.

Step 3 – Pass 2 actuarial exams

Eventually, you will need to pass 10 exams to become a full-fledged actuarial fellow. But to get your first job in an actuarial department, you only need to pass 2 or 3 exams. It’s best to take them while you’re still in college – optimally during the summer to avoid getting distracted from your normal coursework. Most actuaries recommend starting with the Probability (P) and Financial Mathematics (FM) exams.

Step 4 – Choose what type of actuary you want to become

Actuaries must choose between two paths: life and health insurance and property and casualty. Your choice will largely be based on where you land your first job, and it will determine what further exams you take after you’ve passed your first 2.

Life and health insurance vs property and casualty actuaries: key differences

1. Life and health insurance – Certified by the Society of Actuaries (SOA) and choose between different exam tracks. They are an insurance of people and work on life insurance, health insurance, retirement benefits, finance, investments.
2. Property and casualty insurance  – Certified by the Casulty Actuarial Society (CAS) and a single exam pathway. They are an insurance of things and Work on automobile insurance, medical malpractice, homeowners’ insurance, and workers’ compensation. These actuaries have slightly higher salaries.

Step 5 – Get your first actuary job

Now that you’ve graduated college, passed a few actuarial exams, and completed an internship, you’re ready to look for your first entry-level job. Be sure to showcase your internship experience, GPA, and your technical knowledge on your resume (Excel, relational databases, SQL, R, and SAS).

Step 6 – Pass 7 actuary exams to become an associate

Actuarial associateship is the first level of certification. To become an ASA (Associate of the Society of Actuaries) or an ACAS (Associate of the Casualty Actuarial Society) you will need to pass 7 exams (including the first 2 you took in college). Which exams you take depends on what branch of actuarial science you’ve chosen.

Exam fees, exam prep, and study time are usually paid for by your employer. Your job may organize a study group and give you a raise when you pass an exam.

You will also need to fulfill some additional, easier requirements, like completing some online courses and submitting your college credits.

Step 7 – Pass all 10 actuary exams to become an actuarial fellow

This is your final step to becoming an actuary. Pass 3 fellowship-level exams, and you are now an FCAS (Fellow of the Casualty Actuarial Society) or an FSA (Fellow of the Society of Actuaries). As with the associate-level exams, your employer will probably pay for the associated costs, including yearly membership fees to the CAS or SOA.

What does an actuary do on a daily basis?

An actuary’s responsibilities could include the following:

• Collecting statistical data for analysis
• Estimating the likelihood and potential cost of events that an insurer would have to cover
• Compiling data and results
• Generating illustrated reports
• Explaining findings to clients, government officials, shareholders, and business executives
• Designing, testing, and administering insurance policies, pension plans, investments, and other business strategies to maximize profit and minimize risk

Types of actuaries

Besides the 2 main types of actuaries (life and health and property and casualty), there are many sub-categories of actuarial science.

• Life insurance actuary
• Retirement (pensions) actuary
• Health insurance actuary
• Quantitative finance actuary
• Investment actuary
• Corporate finance actuary
• Enterprise risk management (ERM) actuary
• Property and casualty actuary
• Reinsurance actuary
• Public sector actuary
• Pricing actuary
• Forensic actuary
• Valuation actuary

The average salary of an actuary

The average actuary salary is $105,900 per year according to the Bureau of Labor Statistics.

However, PayScale data reveals that entry-level actuaries with less than 1 year’s worth of experience (who haven’t completed all their exams, and therefore aren’t actuarial fellows) earn $65,569 per year on average. Because the road to being an actuarial fellow is long and fraught, you may not get paid the median actuary wage until 5-9 years after entering the workforce.

Actuary job outlook

With job growth forecast at 21%, actuaries can look forward to a favorable job market.

Final thoughts on how to become an actuary

Becoming an actuary is a long, harrowing process. But an actuarial career is highly lucrative for diligent students who don’t get too nervous about exams. Salaries are reliably high, and the job market shows no signs of slowing down.