The exciting and dynamic future of actuarial science
Have you ever wondered how catastrophes such as the stock market crash of 1929 could have been prevented? What about the Great Recession of the early 2000s? Did these disasters build over time, or were they surprising to the people most affected? Could they have been averted?
Imagine having the knowledge and the skills needed to steer large entities away from these types of financial disasters. On a smaller scale, imagine being in a position to help your aging aunt or uncle avoid making a tragic investment or helping a small business owner avoid bankruptcy.
If you pursue your bachelor's degree in actuarial science, you could find yourself in these pivotal roles. You could be the expert who predicts financial risk and keeps companies from experiencing catastrophic financial losses.
With a degree from Central Michigan University, the steps you take today can add up to a successful and fulfilling career in the future.Apply now
What is actuarial science?
Actuarial science is the study of risk factors, usually as they pertain to the financial industry. It uses mathematical and statistical data to predict financial risk and scrutinize uncertainty levels. Many industries employ the service of actuaries, including the insurance industry. In this role, they assist insurance companies as they underwrite policies by analyzing existing data, making predictions, and forecasting the probability of events.
But actuarial science is not only about finance. For example, the criminal justice system is another industry that makes good use of the service of actuaries. In this capacity, actuaries predict the odds that a criminal will re-offend. They do so by considering various factors, including a criminal's age, the type of crime they committed, and their educational background. Using predictive data, they assist in criminal sentencing, deciding what type of punishment will be most rehabilitative and how long the ideal sentence should be.
Other industries that employ actuaries include:
- Health care.
However, when most people hear the term "actuary," they picture the insurance industry or pension programs. And they're not wrong.
What do actuaries do?
Actuaries manage risk. They use statistics and data to research past trends and then use that knowledge to help corporations and individuals avoid major financial losses. In the course of a day, an actuary might perform research, communicate with clients, attend a training session, or create a spreadsheet for a client to help them make a responsible decision. In many instances, the actuary’s job is to help people and organizations make sound financial decisions that strengthen their corporations or portfolios.
Other jobs that actuaries may routinely perform on a given day include:
- Reviewing financial data.
- Modeling catastrophes.
- Setting rates.
- Handling state filing requirements.
- Pricing a new product.
The job of an actuary can vary quite a bit depending upon the industry they're in and the position they hold. If you pursue this in-demand career, you may have a range of jobs to choose from, and your everyday routine may look far different from your fellow graduates’, though you may have the same job title.
How to become an actuary
The traditional route to becoming an actuary includes earning your bachelor's degree in actuarial science or a related field, such as mathematics, finance, statistics, or economics, and then passing two separate actuarial exams:
Exam P focuses on probability. To take the exam, you must register with the Society of Actuaries by the deadline and schedule your testing appointment at the Prometric website. Your test will be computer-based with a three-hour, multiple-choice format.
Exam FM refers to Financial Mathematics. It's also a computer-based test that's multiple choice and takes three hours to complete. The registration for Exam FM is the same as it is for Exam P, meaning you must go through the Society of Actuaries and the Prometric website to secure your seat.
Once you've passed your actuarial exams and worked for a time in your first actuarial position, you may want to pursue your associateship. You'll need to pass several more exams and decide whether you want to work in property and casualty insurance, life and health insurance, or some other aspect of the job.
It's worth noting that a lot of testing and dedication is involved in becoming an actuarial scientist. Still, for those who love mathematics and problem-solving, it's a highly gratifying and dynamic field.
Why you should consider studying actuarial science
Actuaries pursue this career for diverse reasons, and if you have a good grasp of mathematical concepts and finance, you can build a lucrative career as an actuary. This job offers plenty of benefits. We've listed a few of the most popular below.
- Actuaries are in demand - According to the Bureau of Labor Statistics, the demand for actuaries is expected to grow much faster than average between 2021 and 2031. It's projected that at least 2,400 jobs will open up for actuaries each year between now and then. For you, this means solid job security and a super-marketable resume. Because the job of an actuary requires highly refined skills, testing, and training, there are fewer suitable candidates for available openings than in some other professions.
- You'll gain valuable, marketable skills - The skills you'll master as you pursue your education and training in actuarial science will benefit you across your career. You'll have specialized knowledge of math and keen skills in analysis, technology, problem-solving, critical thinking, and business economics. If you ever decide to leave the field of actuarial science, everything you've learned will transfer easily to other industries.
- It's a challenging but fulfilling field - Do you love a good challenge? Actuarial science is a challenging field to pursue and requires dedication. However, it's highly rewarding for those who genuinely enjoy testing limits and have a passion for math and finance.
- It makes good use of a passion for math - There's more to do in the field of mathematics than teaching at the elementary or high school level. Actuarial science allows you to apply your mathematical abilities to real-world scenarios, helping real people and organizations prosper.
- There's good salary potential - You can earn a good salary as an actuary, too. Because this job is currently in demand and is only expected to become more in demand over the next decade, earning your bachelor's degree is a sound investment. Due to the unique skills this profession entails, this degree may pay for itself much faster than comparable degrees, allowing you to earn a higher starting salary and progress through the ranks more quickly.