Have you ever wondered how to quantify risk? Or know how insurance companies figure out how much to charge you every month?
Most of the time, it isn’t all based on innate intuition; it’s instead powered by a lesser-known science called actuarial science.
The field combines mathematics, statistics, and business modeling in strategic decision-making. Actuarial science turns risk into calculated risk—helping businesses make decisions based on the highest probability of reaching goals.
If that sounds complicated—you’re right, it is, which is why actuaries are a high-paying occupation that is growing significantly. According to the U.S. Bureau of Labor Statistics, actuaries earn median pay of $120,000 per year—with a projected growth rate of 22% over the next decade.
Prospective actuaries should acquaint themselves with both the Society of Actuaries (SOA) and the Casualty Actuarial Society (CAS). Both organizations have thousands of members who have undergone an extensive training and examination process to become fellows of their respective organizations. While the process takes many years and costs extensive time and money, it can be very lucrative.
Albert Beer, assistant professor at St. John's University's School of Risk Management and Actuarial Science, says becoming an actuarial fellow can essentially lead to “guaranteed income for the rest of your career.”
While becoming an actuary is not a walk in the park, it can be certainly be rewarding. Here are 4 steps you need to take to land an actuary career:
1. Find your calling
Actuary science is closely related to many fields at the intersection of statistics and business, such as data scientists, data analysts, and financial analysts, so it is important that before you get started on the process, you do some exploration.
One of the best ways to do that is to speak directly to an actuary living and breathing in the field. Using LinkedIn or other network resources, try to find one and ask if they would take a few minutes to have a conversation and allow you the opportunity to ask any questions. If they live in your community, you could even ask to shadow them for a day. Alternatively, YouTube has content where individuals have posted day-in-the-life videos that you could check out alongside the r/actuary subReddit.
Keep in mind that the number of actuaries in the job market is relatively small. The BLS reports that there are only about 30,200 actuaries—most of which work at insurance companies. Compare that to 202,900 data scientists and 404,800 financial analysts.
Actuaries tend to be well-rounded individuals with skills in mathematics and statistics paired with finance, economics, and law, Beer shares.
2. Complete a bachelor’s degree
At a minimum, all actuaries need a bachelor’s degree. Ideally, individuals should major in subjects related to mathematics, statistics, economics, finance, or accounting. Some universities even have bachelor’s degrees in actuarial science.
In the U.S., there are about two dozen universities that SOA has designated as “Centers of Actuarial Excellence”—meaning they meet specific criteria pertaining to the curriculum, faculty, industry connection, and more. These programs largely prepare students for a career as actuaries by setting them up to complete the first requirements toward an actuary designation, like completing coursework and taking examinations. The centers are:
- Brigham Young University*
- Drake University*
- Georgia State University*
- Illinois State University*
- Pennsylvania State University*
- Purdue University*
- Robert Morris University*
- St. John's University*
- Temple University*
- University of Iowa*
- University of Illinois–Urbana-Champaign*
- University of Nebraska–Lincoln*
- University of St. Thomas*
- University of Wisconsin–Madison*
- University of Wisconsin–Milwaukee*
- Arizona State University
- Middle Tennessee State University
- Towson University
- University of California–Santa Barbara
- University of Connecticut
- University of Michigan
- University of Texas–Dallas
*These universities also have University-Earned Credit status, meaning students are eligible for SOA exam credit for certain courses.
During one's undergraduate years, internships are a large part of one’s journey to becoming an actuary, Beer says. Not only does it help students determine which direction they may want to take their actuarial career, but it also heavily helps in networking for an eventual full-time job and whether individuals will pursue a fellowship at SOA or CAS.
By the end of a student's years at St. John’s University, Beer says most will have already completed the first two exams—both of which can be used for either SOA or CAS pathway. Graduates typically land jobs with starting salaries of about $85,000.
“I've been teaching 18 years now. I've never had an actuarial student with two exams and two internships not get a job,” he says.
3. Obtain actuary designation
To land most actuary jobs, it is required for you to have been designated—or on the pathway to—an associate or fellow of either SOA or CAS. To start, obtaining validations by education experience (VEEs) is necessary, most commonly obtained through college coursework. Then, about 10 competitive examinations must be passed, a process that can take many years and cost thousands of dollars.
However, candidates don’t have to do it alone. It is a common practice for an employer to assist employees in receiving the full designation in terms of financial assistance, time off to study, and career guidance. Specifically, Beer says some companies tend to give individuals two weeks off from work to study—and if they pass, they are typically rewarded with a promotion and $5,000 raise. Plus, the employer will pay for the exam itself.
Keep in mind though, that passing an actuarial exam is not easy; the pass rates for many of the exams is less than 50%.
SOA versus CAS (according to Beer)
Requirements to become an associate of the Society of Actuaries (ASA)
- VEE: Economics ($85)
- VEE: Accounting and Finance ($85)
- VEE: Mathematical Statistics ($85)
- Exam: Probability ($260)
- Exam: Financial Mathematics ($260)
- Module: Pre-Actuarial Foundations ($210)
- Exam: Fundamentals of Actuarial Mathematics ($390)
- Exam: Advanced Short- or Long-term Actuarial Mathematics ($475)
- Exam: Statistics for Risk Modeling ($340)
- Module: Actuarial Science Foundations ($210)
- Exam: Predictive Analytics ($1,170)
- Module and assessment: Advanced Topics in Predictive analytics ($1,195)
- Course and assessment: Fundamental of Actuarial Practice ($1,770)
- Course: Associateship Professionalism ($625–$805)
To then become a fellow (FSA), there are eight to nine additional modules, exams, and courses individuals must complete via six different track options:
- Corporate Finance and ERM
- Quantitative Finance and Investment
- Individual Life and Annuities
- Retirement Benefits
- Group and Health
- General Insurance
Requirements to become an associate of the Casualty Actuary Society (ACAS):
- VEE: Economics ($75)
- VEE: Accounting and Finance ($75)
- Exam: Probability (must take through other organization, such as SOA)
- Exam: Financial Mathematics (must take through other organization, such as SOA)
- Courses: Data and Insurance Series
- Exam: Modern Actuarial Statistics-I ($550)
- Exam: Modern Actuarial Statistics-II ($550)
- Course: Professionalism (~$1,375)
- Exam: Basic Ratemaking and Estimating Claim Liabilies ($850)
- Exam: Regulation and Financial Reporting ($850)
To then become a fellow at the Casualty Actuary Society (FCAS) three additional examinations are required:
- Exam: Advanced Estimation of Claims Liabilities ($850)
- Exam: Advanced Ratemaking ($850)
- Exam: Risk Management for Actuaries ($850)
Both the SOA and CAS are similar in prestige, and many individuals go down a specific pathway based on their first job. While the requirements for CAS are less extensive and will cost you less money, the SOA is more popular. Both organizations also offer discounts on select requirements for full-time students.
4. Engage with the actuarial community
The actuarial community is tight-knit. While one is learning and working there will be in-person networking experiences to connect with fellow actuaries.
Also, don’t forget to keep up to date with trends in the industry. In order to maintain professional membership, continuing education may also be required. Actuarial science is not averse to the need for lifelong learning; technology, legal requirements, and regulations are always changing, so it is best to stay ahead of the game.
The takeaway
Becoming an actuary takes patience. Individuals must be dedicated to learning the craft and not be easily deterred by examinations—or even failing one.
Despite the large barrier to entry, the actuary career can be very rewarding in terms of job security, high salaries, and growth opportunities. The key to success is being highly motivated, but do not just let it be led by career perspectives; find something that strikes you as interesting, every single day.
“You're never going to be good at something you don't like. So you better find a passion. If you want to succeed in life and in business, find a passion,” Beer encourages.
Frequently asked questions
Is becoming an actuary hard?
Yes, becoming an actuary is not easy. It takes many years of studying for about 10 competitive examinations to become a full-fledged actuary. However, many top companies that hire actuaries have built-in support for individuals, like time off to study as well as promotions for exam passage.
Check out all of Fortune’s rankings of degree programs, and learn more about specific career paths.
Do actuaries make a lot of money?
Yes, actuaries tend to make six figures just a few years after obtaining their undergraduate degree. Those who get on a pathway to becoming an actuarial fellow should expect to experience high-paying salaries for most of their life. And if a management position is in your future, pay can be especially high.
Is becoming an actuary hard?
Yes, becoming an actuary is not easy. It takes many years of studying for about 10 competitive examinations to become a full-fledged actuary. However, many top companies that hire actuaries have built-in support for individuals, like time off to study as well as promotions for exam passage.
Check out all of Fortune’s rankings of degree programs, and learn more about specific career paths.
How many years does it take to become an actuary?
It can take over a decade to become an actuary fellow, but the exact timeline depends on one’s preparation habits. While continuing to balance work and life, one may expect to take an examination every few months to achieve associate and then fellow status.
Do actuaries make a lot of money?
Yes, actuaries tend to make six figures just a few years after obtaining their undergraduate degree. Those who get on a pathway to becoming an actuarial fellow should expect to experience high-paying salaries for most of their life. And if a management position is in your future, pay can be especially high.
Is becoming an actuary hard?
Yes, becoming an actuary is not easy. It takes many years of studying for about 10 competitive examinations to become a full-fledged actuary. However, many top companies that hire actuaries have built-in support for individuals, like time off to study as well as promotions for exam passage.
Check out all of Fortune’s rankings of degree programs, and learn more about specific career paths.
