Life is full of risks, so it makes sense there are people who need to mitigate those risks. That’s the role of actuarial science, which uses mathematics and statistics to examine numbers and data in a particular industry—typically some form of insurance industry—and tries to predict how likely future events are, as well as how to prevent unwelcome events (or at least how to absorb the impact and effects if those unwelcome events do occur). Taking on an actuarial science major, and the requisite tests to become a professional actuary, is definitely a challenge, but if you have an aptitude for math and enjoy figuring out puzzles, this major can lead to great earnings potential and a job you love.
What do actuarial science majors study?
Besides your general-education courses, prepare to be immersed in more numbers than John Nash in A Beautiful Mind. You’ll take various math (e.g., calculus, probability, linear algebra, and statistics), microeconomics and macroeconomics, financial, insurance, and operations research courses.
In addition to attaining your bachelor’s degree in actuarial science, you’ll also need to take a series of exams if you want to use your degree to go the certified actuary route. Some employers want graduates who’ve already taken at least one or two of these exams before they’re hired as actuary trainees. There are two forms of professional certification: associate (which can take between four to seven years to complete) and fellow, which will likely require you to put in another couple of years.
It’s also possible to become an actuary with a related undergrad major, such as math or statistics, along with the required exams, but an actuarial science degree will likely offer you the best positioning for this career.
So where can you expect an actuarial science major to lead you?
Insurance may sound boring—but you can likely find a field that interests you.
Although an actuary most often heads into the insurance arena, there are a variety of types of insurance you can choose to specialize in, including auto, homeowners, workers’ comp, health, or life. Or you can use your numbers skills to benefit employers in the investments, finance, or medical malpractice industries, which also need risk assessment.
Besides becoming an actuary, you can also apply the math and stats skills you attain with your actuarial sciences major to other jobs (some of which require further education beyond the undergraduate level), including economist, budget analyst, or statistician.
Employers will often assist actuary trainees in becoming full-fledged actuaries.
Unless you’re a whiz who passes all necessary certification exams before graduation (let’s be honest: that’s not likely, though we’ll give you a virtual high-five if you pull it off), you’ll start out as an actuary trainee under more experienced mentors. But many firms will help you along in your quest for a higher-level job, offering incentives for passing exams, setting aside time to allow you to study, and even paying for the exams and study materials.
You won’t have to crunch many numbers to figure out job prospects are quite good.
Salary potential with an actuarial science degree is promising. Median salary for an actuary in 2016 was just over $100,000, with pay within $10,000 or so of that mark for economists and personal financial advisers as well. If you rise up to become a chief financial officer or chief risk officer for a corporation, prospects could prove even more lucrative down the road. And job growth sees similarly optimistic news, with the rate between 2016 and 2026 expected to grow 22%—much faster than the average for all careers.
It’s probably not the type of job that will give you an ulcer.
It can pay to be a math geek, both for your paycheck and your well-being. “Actuary” often pops up on lists of jobs that pay well but generate little stress, despite the rigorous exam schedule. This is due to the often-quiet working conditions, the balance between work and personal life (especially when your employer is helping you achieve your goals), and usually reasonable work hours, though certain industries may have seasonal peaks, such as the end of each financial quarter. That doesn’t mean there’s no stress—after all, you’re still helping guide companies to make major financial decisions—but your work environment will likely offer you a pleasant place in which to work your numbers magic.