When Liberty Mutual Group, one of the largest employers of actuaries in the United States, visited the University of Vermont eight years ago to recruit students, only four or five showed up.
Around 2005, many undergraduates may not have ever heard of actuaries – highly trained professionals who use statistical formulas to calculate risk for insurance policies and pension funds.
Soon after, however, actuaries began topping the “hot job” lists. Over the past five years, USA Today and CareerCast.com have ranked actuary as No. 1 or close to that; CNNMoney claims actuary as “one of the best jobs in America (that) often flies under the radar.”
As a result, “the second time Liberty Mutual came to campus, around 2010, the room was overflowing,” says Joseph Kudrle, a senior mathematics lecturer who helped develop UVM’s Actuarial Science Sequence. “There had been a lot of talk about actuaries in the media, about how they are well-paid, how there’s a lot of job satisfaction, and a lot of esteem, like a doctor or lawyer or professor. That aspect of being an actuary attracts a lot of people – those who are in school and those who are out of school and are working professionals wanting to switch careers.”
Trends in the Actuarial Science Industry
If you asked an actuary to analyze the profession, you might hear something like this:
- The likelihood of a future job loss in the actuarial field: extremely low, if at all. The job outlook for actuaries over the next decade is over 26 percent, much faster than average, according to the U.S. Bureau of Labor Statistics.
- How to reduce the likelihood of job loss: keep working, studying for and passing actuarial exams, and moving up the ladder. Students prepared in the UVM program, for instance, have a 75 percent exam success rate, compared with 50 percent nationally. Even if students don’t pass any exams beyond the first two, they still can continue to work as actuarial analysts or consultants and make a decent living, Kudrle points out.
- How to increase the likelihood of finding a job: Not all actuaries have followed a highly structured path, graduating with actuarial science degrees from big state schools. In fact, many firms prefer to hire liberal arts majors.“For sure, you need to have quantitative skills, but a National Life representative told me they’re also looking for individuals who are dynamic and who can communicate, who can think critically and who can do the work,” Kudrle recalls. “One company mentioned their head guy was a philosophy major and that they don’t like getting candidates from the big farm-factory schools. They feel those students are pigeon-holed.”
Entry Level Actuary Job Types
The UVM program prepares students to take the actuarial exams. After passing two exams, students can be recruited into jobs as actuarial analysts.
“If you can pass the first couple of exams, that shows you have the wherewithal and you have the drive,” Kudrle says.
It’s standard practice for companies to support their employees in taking the exams: by paying exam fees and by providing paid study time.
“They’ll pay for you to take the actuary exams, usually with time on the clock. You have so many hours a week, and those are study hours for you,” Kudrle explains. “But there also is time off the clock. If you pass an exam, there is a pay jump and more responsibility.”
However, he notes, some people don’t fully understand how much they have to study for the exams until they fail them. It can take six to eight years to pass all the exams. “The exams are tough,” he says. “You almost have to immerse yourself in it.”
Beanactuary.com suggests 100 hours of study for each hour of an exam; the P/1 three-hour exam, for example, requires 300 hours.
“A lot of people burn out on taking all the exams,” Kudrle says. “If you get into a company and get into their actuarial department, you might decide the exams aren’t for you. But once you get your foot in the door, then you can find the job that best fits you. Some people become actuarial analysts; others become consultants.”
Companies groom promising entry-level employees for advancement, training them in project management, leadership, computer application, communication and other key areas.
Because such skills are transferable to any number of highly paid business jobs, starting out in an entry-level actuarial job can lead to any number of career paths. Consider project management, for instance. Project managers are also in high demand and command top-level salaries similar to actuaries’.
Companies and Organizations That Employ Actuaries
Since UVM’s Actuarial Science Sequence began several years ago, Kudrle has seen students land actuarial jobs across the United States, including Vermont.
“The big metro areas are where a lot of them go,” he says. Places like Boston, New York, Washington, Los Angeles and insurance-heavy Hartford, Conn.
Figures from both of the leading professional organizations for actuaries — Casualty Actuarial Society and Society of Actuaries – show that the majority of actuaries work in the Northeast and Midwest.
Vermont also has its share of actuarial jobs with employers like National Life, Marsh USA and Milliman. “There are a lot of opportunities for mid-career changers who want to live in Vermont but need a profession where they can find work,” Kudrle says.
The bulk of actuaries across the U.S. – 48 percent, according to the Society of Actuaries – work for insurance companies. These actuaries use statistics and theory to analyze the financial impact of risks for life, home and auto insurance. They may consider how likely it might be for a 25-year-old male to be involved in an auto accident. Or how much fire risk there is in a 100-year-old owner-occupied house located far from a fire hydrant. Or whether to grant insurance to a family with a trampoline in the back yard.
Actuaries also work as consultants at large private or small independent firms, helping companies design pension and benefit plans.
Besides Liberty Mutual, top private employers of actuaries – both in insurance and pensions/benefits – include The Travelers, Towers Watson, Milliman, The Hartford, CNA, Allstate, Nationwide, Pricewaterhouse Coopers, Towers Watson, Mercer, Aon Hewitt, Prudential, Metlife and ING.
But you also can find actuaries working in government, assisting with regulations; as consultants, helping develop strategic change initiatives for private corporations; and teaching at colleges and universities. Other organizations employing actuaries include bank and investment firms, public accounting firms, labor unions, rating bureaus and fraternal organizations.
Actuarial Salary Range
If you pass all the necessary exams and become an actuary, then you may eventually be looking at a six-figure salary. The U.S. Bureau of Labor Statistics puts the annual median pay for actuaries in 2012 at over $93,000. Beanactuary.com says that experienced fellows can make $150,000 to $200,000 or more a year. Vermont is one of the top five states for actuary salaries, at $121,000, according the BLS. Beanactuary.com also lists various sources for additional salary data.