Insure Your Future With A Career As An Actuary
Most of us are not aware of what an actuary does and the importance of the role in an insurance company. Undoubtedly, an actuarial job may seem quite boring, but it is one of the most challenging and high-paying jobs. If you are a math or statistics genius, then this may be the perfect career for you. The actuary's main responsibility is assessing/quantifying risk and developing means of mitigating risks. Actuaries are largely known for their work in the insurance and pension fields, where they design financially secure benefit programs to protect customers. Let's take a look at the role, certification process and career advancement of an actuary.
What is an Actuary?
Actuaries are the financial engineers of the insurance industry, specializing in either life and health insurance or property and casualty insurance. Basically, they formulate probability tables or employ highly advanced dynamic modeling methods that predict the probability that a potential event will generate a claim. From these tables, they ascertain the amount of money needed for claims payouts.
Different actuaries have different roles, so they either work for insurance companies or consulting firms. They may be involved with devising a new retirement program for a company or even calculating the impact of cell phone ban laws in automobile losses and determining suitable rate discounts. For instance, in property insurance, property and casualty actuaries compute the number of claims likely to result from natural catastrophes. The actuaries take into account the property's location, construction and several other factors before determining the premium.
Similarly, the figures calculated by actuaries ensure that insurance companies charge sufficiently
enough for premiums in order to cover predicted costs. Above all, actuaries have to make sure that the premium charged for that insurance is affordable by the public as compared to other insurance companies. (For more on insurance, see Extended Warranties: Should You Take The Bait? )
If you are interested in becoming an actuary, you are required to earn an undergraduate degree in statistics, mathematics, finance or actuarial science. There are many schools and colleges that offer programs in actuarial science.
Before becoming a fully qualified actuary, individuals must pass examinations given by either the Society Of Actuaries (SOA) or the Casualty Actuarial Society (CAS) over a period of five to ten years. Students are normally allowed to take the first two examinations while they are still in college. After graduation, students often obtain jobs as entry-level actuaries and work through the certification process while simultaneously gaining some experience in the field. In return, several employers may pay the examination fees and provide extra study time to their employees. As actuaries pass exams, they get compensated with pay raises.
The two actuarial societies provide basic education in the fundamental principles of actuarial science, professional development and continuing education for practicing actuaries. The SOA provides professional certification in life insurance. retirement systems, investment and finance and health benefits systems. The CAS is related to specialization in the property and casualty field. Generally, three of the first four exams in the SOA and CAS examination series are jointly administered by the two societies and, thus, include the same material.
CAS Certification ProcessSource: www.investopedia.com