Career Spotlight: Inside Actuarial Science
How’s this for an unexpected new-year trend: actuarial science.
Take, for instance, a January 2018 headline from News24, South Africa’s largest digital publisher. Takalani Bambela from Limpopo’s Tshivhase Secondary School near Johannesburg achieved the region’s top score in math and science on his matric exam. Matriculation or matric is a term commonly used in South Africa to refer to the final year of high school and the qualification received on graduating from high school. Bambela told News24 that he plans to study actuarial science at the University of Witwatersrand in Johannesburg, adding, “With actuarial science, I will be able to use the mathematical skills which I would have attained … to help local businesses assess and manage the risks that they will encounter along the journey of their businesses. This will result in local businesses growing … then there will be more inflow of money into our country resulting in our economy growing.”
A world away near Philadelphia, Pennsylvania in the U.S., Michelle McGrath, a senior at Plymouth Whitemarsh High School, is on a similar career track. McGrath, who was recently accepted to the University of Pennsylvania, also plans to study actuarial science. “I discovered my desire to be an actuary when I enrolled in AP Statistics my junior year of high school,” says McGrath, who this year is tackling AP Economics to further explore her interest in business. “I liked that there were a lot of real-world applications that we explored in statistics, which is not common for many math classes. I always knew that I wanted to major in something relating to math in college. Once my teacher mentioned being an actuary to the class, I explored the aspects of the job and thought it’d be the perfect major for me.”
From Johannesburg to Philadelphia and beyond, actuarial science is in demand these days. The U.S. Bureau of Labor Statistics says that employment of actuaries is projected to grow 22% from 2016 to 2026, much faster than the average for all occupations. And actuaries often rank high on lists of top STEM careers, top-paying jobs and even best jobs for women.
With the help of Wharton’s Actuarial Science department and trade groups like the Society of Actuaries (you can find both in the related links section of this article’s toolbar), here are 10 facts about careers in actuarial science:
- Actuaries measure and manage risk. Combining knowledge in math, statistics and business management, actuaries typically work for insurance companies, consulting firms and financial institutions.
- Actuaries often talk about using their math and statistics skills to deal with “real-world” applications. The Society of Actuaries describes it like this: “We determine how much an insurance company should charge for auto insurance, taking into account many factors, such as the car that is being insured and details about the driver.” Or this: “We develop life insurance products so that parents can enjoy adventurous recreational activities such as rock climbing while feeling secure that their children will be cared for in the event of an accident.” Or this: “We assist banks in managing their assets and liabilities and develop ways to manage financial risk.”
- Put another way, actuaries stand at the intersection of risk and money. Undergraduates at Wharton learn, “Actuaries are experts in evaluating the likelihood and financial consequences of future events, designing creative ways to reduce the cost of undesirable events, and decreasing the impact of tragic events that do occur.” Finance is a popular double-concentration for students pursuing an actuarial science degree.
- Numbers are an actuary’s crystal ball. “The main aspect of being an actuary that got me interested in this field is an actuary’s ability to use numbers to predict the future,” says McGrath. “Similar to how English is a language to many, math is also a language to actuaries. The numbers actually represent important information, and I’m excited to be able to figure out what these numbers mean.”
- Although insurance and financial institutions are top of mind for job-seeking actuaries, their skills and talents are transferable to any industry that requires risk modeling and management, including: transportation, such as shipping and air travel; energy, such as utilities, oil and gas; and the environment, including climate change issues. “I would love to pursue using my actuarial knowledge to work in some way with sports analysis or statistics,” adds McGrath. “Although this is an untraditional application of actuarial science, there are actuaries who work in this field, and I believe that I would find this work compelling.”
- Get ready to take some tests. Actuaries must past seven professional exams while in school and during their careers in order to earn a fellowship certification. These tests are administered by the Society of Actuaries and the Casualty Actuarial Society. Upon completion of a Wharton undergrad degree in actuarial science, students are prepared to pass the first four professional exams.
- Though it sounds like a solitary job, actuaries must embrace teamwork and collaboration. Since risk affects entire organizations, they need to be effective communicators with strong business and interpersonal skills.
- Actuaries are immortalized in print and on the big screen. The original Batman comic series included a villainous character called “The Actuary,” a mathematical genius who used formulae to help the Penguin commit crimes. More recently in the 2016 movie Zootopia, the character Jaguar aspires to be an actuary.
- If you want job security…Actuarial science often appears among the ranks of careers with guaranteed employment. When you consider how the job market can shift from freshman to senior year of college, it’s important to think about careers that are consistently in demand. In U.S. News & World Report’s 2017 ranking of 26 Jobs with the Most Job Security, actuaries (with a median annual salary of $97,070) came in at No. 23.
- Risk is a big business that may be getting bigger. Companies like Facebook are hiring risk experts, including actuaries, to figure out how all kinds of factors might impact their businesses, even things like the potential for cyberattacks. According to a recent article in Inc. magazine, “In the era of big-data analysis, flying blind is a gamble you don’t have to take.”
Related Links
- Penn Undergrad Inside: Actuarial Science
- Society of Actuaries
- News24: Takalani Bambela
- The Actuary Magazine
- Ranking the Actuarial Career
- U.S. News: 26 Careers with the Most Job Security
- American Academy of Actuaries
- Inc: The Surprising Hire that Helps These Founders See the Future
- Wharton’s Actuarial Science Program
Conversation Starters
Michelle McGrath has already figured out her career path to actuarial science. Have you determined yours? Share the career you would like to pursue in the comment section of this article. Why did you choose it? How did you arrive at that decision?
Add to our list of 10 facts. Do you have a parent or friend who works as an actuary, or have you done an internship? What have you learned that you can pass along to other career prospects?
I don’t think I’ve determined mine yet, but actuarial science is one of the careers I am looking into when I get to college. I chose that as one of the careers I’m looking into because of my knowledge of math and finance. I looked for careers relating to math, finance and technology to find a good career for me and that was one of them so I arrived at this career as one of my decisions.
Actuaries can also be very smart because they go through a lot of training and they have to complete a lot of exams in order to maintain their actuarial status.
Michelle McGrath has determined out her career to do actuarial science. I haven’t decided my career path yet. But after reading this, I am interested in Actuarial Science. It combines many different subjects such as math, science, and statistics.
Actuarial scientists have very high intelligence due to the rigorous tests they have to do before attaining their status.
I haven’t decided my career path yet but I am interested in business and science. Perhaps I can put the two together. I arrived at those interests by taking business related classes in high school. I also research topics like astronomy and physics in my free time. I can definitely see myself pursuing a career in one of those subjects.
I don’t think I’ve found mine yet, but I think I’m going to the finance path or trying to become famous. My passion is money. This is why I’m going to one of this two options, I want to be known, or have a to of money, and I think this are ways that I would like to accomplish it.
2. I don’t have any friends that have done internships, but I know what they have told me, and is all about dreaming hard, and working harder.
I don’t think I’ve determined mine yet, but the actuarial science is like one of the careers I am looking into when I get to college. I would chose that as one of the careers I’m looking into because of my knowledge of math and finance. I looked for careers relating to math, finance and technology to find a good career for me and that was one of them so I arrived at this career as one of my decisions.
Actuaries can also be smart because they can go through a lot of training and they have to complete a lot of exams in order to maintain their actuarial status.
I decided that I would like to go into law and/or finance. This is because I know a lot of lawyers who are both successful and good at what they do. Plus, practicing law is a very broad field in which one is able to specialize in many different areas of. Finance is an area that affects the whole of this nation’s constituents and offers solid job security, considering the fact that economics and that handling of money will never be nonexistent in my lifetime.
I don’t know anybody personally who is an actuary, but I have friends who hope to become actuaries as adults. I learned from one of them that it is a job that requires a strong knowledge of math and intelligence. this is because it is essentially a practice involving statistics and probability. Naturally, he is also very mathematically oriented and is very bright. However, he has also voiced concerns regarding the future of actuaries considering that fact that a computer could just as easily calculate statistics in place of a person.
Johann,
My grandfather Bruce Cook founded the largest actuarial firm in Australia, which was later bought out by the American company, Mercer Insurance Group. He was the CEO and Chairman until his retirement. You are quite correct in saying that you need to be mathematically orientated. My grandfather was going to be an engineer based on his strength in mathematics but was led towards actuarial science which is incredibly challenging for those that are mathematically minded. However, more than a mathematician, he was an entrepreneur and a businessman. When you choose a career, be it actuarial science, law, economics, there is a common thread. You are dealing with people – clients, colleagues, bosses etc. Your leadership skills, problem solving skills, people skills are what will allow you to succeed. My grandfather succeeded because he could build relationships with corporates and win accounts for his company, plus attract and retain staff. You suggested that computers will replace actuaries so this may not be a desirable career. A computer can not replace human interaction. They may replace mathematical calculations as you say, but if there is an error or something needs to be changed, you need personal interface. Being technical or mathematically brilliant in your field is not the only measure of success. You have to have excellent relationship building skills. The greatest lesson my grandfather has taught me to succeed in my future career is to listen, use common sense and good judgement and to treat everyone regardless of seniority with respect. As for my career path, whilst actuarial science has appeal for me, I have global interests. A great way to blend mathematics in college is to study both international business and econometrics.
I have determined that I want to pursue a career along computer science, and software engineering. I have always had a passion for computers and their complexity since I was very young, getting more in-depth to how software actually works in the past few years. I simply love creating new programs and discovering new ways to make my program better.
I do not know any Actuary personally, but I’ve heard that you have to work hard and persist.
I have decided that I would like to pursue a career in international finance. I have already found my passion in mathematics, but I have got more in-depth into business applications for finance since entering high school.
No matter your career prospects, mathematics and science are becoming more important to ensure a high-paying career. STEM jobs are becoming more relevant today.
I don’t think I’ve found mine yet, but I think I’m going to be a pilot with a business knowledge. My passion is flying and having money. I want to have a great life and a lot of money.
2. I don’t have any friends that have done internships, I know some told me their friends told then its all about working hard.
I have decided that I would like to pursue a career in economics. Since the moment I got to understand why my country of origin (Venezuela) was suffering economically despite having a huge amount of natural resources available, my curiosity and desire for studying the topic emerged.
I don’t know anyone that works as an actuary, but I’ve heard that it is a very demanding career with many job opportunities.