So you think you might want to be an actuary, eh? Or maybe you’re not sure what an actuary is… or maybe you just found your way here by mistake. Read on, my friend, and learn what it means to be an actuary and what Washington and Lee can do to help you become one.
Actuaries combine strong analytical skills (in mathematics and statistics) with their knowledge of business and economics (and some psychology too) to try to predict the likelihood of various future events and to try to prepare for them. For example, an actuary could determine the probability of a hurricane striking Florida, and then figure out how much money an insurance company should put aside to cover that risk. Or, he/she could try to predict when people are going to choose to start taking Social Security benefits. Or, an actuary might be asked to determine how much to charge a twenty-year-old male driver for car insurance, given the likelihood of his getting into an accident. Usually, actuaries specialize in one of the major areas of risk analysis (life insurance, pensions, casualty, health insurance), but they can also be found in many other fields.
Actuaries are paid very well. Right out of college, starting salaries are in the 50 to 65,000 range. After 10 years, most earn between 130 and 250 thousand dollars. Salaries are dependent on how quickly you progress through the exams (see below for more information on these exams).
The following external links will tell you a bit more about being an actuary.
- BeAnActuary.org gives plenty of information about the career.
- This salary chart from an actuarial recruiting firm tells you how much, on average, actuaries can earn.
- One of the main actuarial professional societies is the Society of Actuaries. (Others include the Casualty Actuarial Society and the American Academy of Actuaries.)
- A very lively and independent forum for American and Canadian actuaries is the Actuary Outpost (click on “Discussion Forum”).
For more information, or to sign up for classes, talk to me or to Professor McRae (also in the math department).
Actuaries take a series of exams to advance in their career. You can start these while still in school, and continue them while working for an actuarial firm. (Most companies will pay you to study!) The exams do not need to be taken in any order.
It’s best to have passed at least one exam, and hopefully two, before you graduate. This will increase your chances of getting a good job (and also give you an idea if the career is for you). The Mathematics Department here at W&L gives exam prep courses for Exam P and Exam FM (and others if time and resources permit). Study notes and sample exams can also be found at the SOA Exam Information Site (click on ASA, CERA, or FSA for details).
- Exam P covers probability. We recommend you take Mathematics 101 and then either Mathematics 118 or Mathematics 309 before preparing for this exam. We now offer Math 309 and 310 every year! A very good (and completely free!) textbook for this material is the OpenStax Statistics book by Illowski, Dean, et. al.
- Exam FM is on Financial Mathematics (mostly interest theory, present value, bonds, coupons, and stuff like that). You’ll definitely want Mathematics 102 and Mathematics 270 for this exam; the Math 270 textbook is Mathematical Interest Theory by Vaaler and Daniel.
- Be sure to ask us if we’re offering a one-credit exam prep course, which we occasionally do, depending on faculty availability.
Coursework and VEE (Validation by Educational Experience)
In addition to the exams, you’ll also need to show experience in three topics: Economics, Corporate Finance, and Applied Statistical Methods. To quote the SOA’s Q&A file on their website, “It was determined that validation by educational experience is appropriate for topics that are either best learned in a classroom environment (applied statistics) or are considered important, but not core to actuarial work (economics and corporate finance).” You may be able to do this simply by taking the appropriate coursework here at Washington and Lee! Full information about VEE credit can be found on the SOA website right here (and you can look up which W&L courses can be used for each requirement).