What do Actuaries Do


Through their knowledge of statistics, finance, and business, actuaries assess the risk of events occurring and help create policies for businesses and clients that minimize the cost of that risk. For this reason, actuaries are essential to the insurance industry.

Actuaries analyze data to estimate the probability and likely cost to the company of an event such as death, sickness, injury, disability, or loss of property. Actuaries also address financial matters, such as how a company should invest resources to maximize return on investments, or how an individual should invest in order to attain a certain retirement income level. Using their expertise in evaluating various types of risk, actuaries help design insurance policies, pension plans, and other financial strategies in a manner which will help ensure that the plans are maintained on a sound financial basis.

Most actuaries are employed in the insurance industry, specializing in either property and casualty insurance or life and health insurance. They use sophisticated modeling techniques to forecast the likelihood of certain events occurring, and the impact these events will have on claims and potential losses for the company. For example, property and casualty actuaries calculate the expected number of claims resulting from automobile accidents, which varies depending on the insured person's age, sex, driving history, type of car, and other factors. Actuaries ensure that the premium charged for such insurance will enable the company to cover potential claims and other expenses. This premium must be profitable, yet competitive with other insurance companies.

Within the life and health insurance fields, actuaries help companies develop health and long-term-care insurance policies by predicting the likelihood of occurrence of heart disease, diabetes, stroke, cancer, and other chronic ailments among a particular group of people who have something in common, such as living in a certain area or having a family history of illness. Such work of actuaries can be beneficial to both the consumer and the company because the ability to accurately predict the likelihood of a particular health event among a certain group ensures that premiums are assessed fairly based on the risk to the company. Additionally, life insurance actuaries help companies develop annuity and life insurance policies for individuals by estimating how long someone is expected to live.

Actuaries in other financial service industries manage credit and help set a price for corporate security offerings. They also devise new investment tools to help their firms compete with other companies. Pension actuaries work under the provisions of the Employee Retirement Income Security Act (ERISA) of 1974 which sets minimum standards for pension and health plans in private industry. Actuaries working for the government help manage social programs such as Social Security and Medicare.

Actuaries help determine corporate policy on risk, for example, and also help explain complex technical matters to company executives, government officials, shareholders, policyholders, or the general public. They may testify before public agencies on proposed legislation that affects their businesses or explain changes in contract provisions to customers. They also may help companies develop plans to enter new lines of business or new geographic markets by forecasting demand in competitive settings.

Consulting actuaries provide advice to clients on a contract basis. The duties of most consulting actuaries are similar to those of other actuaries. For example, some may evaluate company pension plans by calculating the future value of employee and employer contributions and determining whether the amounts are sufficient to meet the future needs of retirees. Others help companies reduce their insurance costs by offering them advice on how to lessen the risk of injury on the job. Consulting actuaries sometimes testify in court regarding the value of potential lifetime earnings of a person who is disabled or killed in an accident, the current value of future pension benefits (in divorce cases), or other values arrived at by complex calculations. Some actuaries work in reinsurance, a field in which one insurance company arranges to share a large prospective liability policy with another insurance company in exchange for a percentage of the premium.

Work Environment

Actuaries held about 27,700 jobs in 2020. The largest employers of actuaries were as follows:

  • Finance and insurance - 76%
  • Professional, scientific, and technical services - 11%
  • Management of companies and enterprises - 5%
  • Government - 4%
  • Self-employed workers - 2%

Actuaries typically work on teams that often include managers and professionals in other fields, such as accounting, underwriting, and finance.

Although actuaries usually work in an office setting, those who work for consulting firms may need to travel to meet with clients.

Work Schedules

Most actuaries work full time, and some work more than 40 hours per week.

Education & Training Required

Actuaries need a strong foundation in mathematics and general business. Usually, actuaries earn an undergraduate degree in mathematics, statistics, or actuarial science, or a business-related field such as finance, economics, or business. While in college, students should complete coursework in economics, applied statistics, and corporate finance, which is a requirement for professional certification. Furthermore, many students obtain internships to gain experience in the profession prior to graduation. More than 100 colleges and universities offer an actuarial science program, and most offer a degree in mathematics, statistics, economics, or finance.

Increasingly, companies are requiring potential employees to have passed the initial actuarial exam described in the next section, which tests an individual’s proficiency in mathematics—including calculus, probability, and statistics before being hired.

Beginning actuaries often rotate among different jobs in an organization, such as marketing, underwriting, financial reporting and product development, to learn various actuarial operations and phases of insurance work. At first, they prepare data for actuarial projects or perform other simple tasks. As they gain experience, actuaries may supervise clerks, prepare correspondence, draft reports, and conduct research. They may move from one company to another early in their careers as they advance to higher positions.

Certifications Needed

Two professional societies sponsor programs leading to full professional status in their specialty: the Society of Actuaries (SOA) and the Casualty Actuarial Society (CAS). The SOA certifies actuaries in the fields of life insurance, health benefits systems, retirement systems, and finance and investment. The CAS gives a series of examinations in the property and casualty field, which includes automobile, homeowners, medical malpractice, workers compensation, and personal injury liability.

Four of the first seven exams in the SOA and CAS examination series are jointly sponsored by the two societies and cover the same material. For this reason, students do not need to commit themselves to a specialty until they have taken the initial examination, which tests an individual's competence in mathematics and helps evaluate their potential as actuaries. If candidates pass the initial exam, prospects can begin taking the next series of exams with the help of self-study guides and courses. Those who pass two or more examinations have better opportunities for employment at higher starting salaries than those who do not. These initial exams can be taken while the candidate is still in college.

Many candidates find work as an actuary immediately after graduation and work through the certification process while gaining some experience in the field. In fact, many employers pay the examination fees and provide their employees time to study. As actuaries pass exams, they are often rewarded with a pay increase. Despite the fact that employers are supportive during the exam process, home study is necessary and many actuaries study for months to prepare for each exam.

The process for gaining certification in the Casualty Actuarial Society is predominantly exam-based. To reach the first level of certification, the Associate or ACAS level, a candidate must complete seven exams, attend one course on professionalism and complete the coursework in applied statistics, corporate finance, and economics required by both the SOA and CAS. This process generally takes from 4 to 8 years. The next level, the Fellowship, or FCAS level, requires passing two additional exams in advanced topics, including investment and assets and dynamic financial analysis and the valuation of insurance. Most actuaries reach the fellowship level 2 to 3 years after attaining Associate status.

The certification process of the Society of Actuaries blends exams with computer learning modules and coursework. After taking the initial exams, candidates must choose a specialty—group and health benefits, individual life and annuities, retirement benefits, investments or finance/enterprise risk management. To reach the Associate or ASA level, a candidate must complete the initial five exams, the coursework in applied statistics, corporate finance, and economics required by the SOA and CAS, eight computer modules with two subsequent essays, and a seminar in professionalism. This process generally takes from 4 to 8 years. To attain the Fellowship or FSA level, a candidate must pass two additional exams within a chosen specialty and must complete three computer modules, a seminar in professionalism, and a course in fellowship admissions. Attaining Fellowship status usually takes an additional 2 to 3 years after becoming an Associate.

Specific requirements apply to pension actuaries, who verify the financial status of defined benefit pension plans for the Federal Government. These actuaries must be enrolled by the Joint Board of the U.S. Treasury Department and the U.S. Department of Labor for the Enrollment of Actuaries. To qualify for enrollment, applicants must meet certain experience requirements and pass two exams administered by the SOA, as stipulated by the Board.

Other Skills Required

Actuaries should have strong computer skills and be able to develop and use spreadsheets and databases, as well as standard statistical analysis software. Knowledge of programming languages, such as Visual Basic for Applications, SAS, or SQL, is also useful. Companies also increasingly prefer well-rounded individuals who, in addition to having acquired a strong technical background, have some training in business and possess strong communication skills. Good interpersonal skills also are important, particularly for consulting actuaries.

To perform their duties effectively, actuaries must keep up with current economic and social trends and legislation, as well as developments in health, business, and finance that could affect insurance or investment practices.

How to Advance

Advancement depends largely on job performance and the number of actuarial examinations passed. Actuaries with a broad knowledge of the insurance, pension, investment, or employee benefits fields can rise to executive positions in their companies, such as Chief Risk Officer or Chief Financial Officer. These generally require that actuaries use their abilities for assessing risk and apply it to the entire company as a whole. Actuaries with supervisory ability may advance to management positions in other areas, such as underwriting, accounting, data processing, marketing, and advertising. Some experienced actuaries move into consulting, often by opening their own consulting firm. A few actuaries transfer to college and university faculty positions.

Job Outlook

Employment of actuaries is projected to grow 24 percent from 2020 to 2030, much faster than the average for all occupations.

About 2,400 openings for actuaries are projected each year, on average, over the decade. Many of those openings are expected to result from the need to replace workers who transfer to different occupations or exit the labor force, such as to retire.


Actuaries will be needed to develop, price, and evaluate a variety of insurance products and calculate the costs of new risks.

More actuaries also will be needed to help companies manage their own risk, a practice known as enterprise risk management. These actuaries help companies adjust their business or investment strategies across all areas of operation.

Insurance companies will need actuaries to analyze the large amount of information, such as medical or property data, collected from consumers. These data will allow insurance companies to develop new products, set competitive prices, predict consumer behavior, and improve projections of future risks and costs.

In addition, health insurance companies will require more actuaries to help evaluate the effects of changing healthcare regulations and guidelines, expand into new insurance markets, and offer products to new customers.


The median annual wage for actuaries was $105,900 in May 2021. The median wage is the wage at which half the workers in an occupation earned more than that amount and half earned less. The lowest 10 percent earned less than $63,260, and the highest 10 percent earned more than $206,820.

In May 2021, the median annual wages for actuaries in the top industries in which they worked were as follows:

  • Government - $110,590
  • Finance and insurance - $110,000
  • Professional, scientific, and technical services - $101,600
  • Management of companies and enterprises - $101,510

Most actuaries work full time, and some work more than 40 hours per week.

Academic Programs of Interest

Actuarial Science
Students who major in Actuarial Science will receive rigorous training in the mathematics and statistics needed for the design, financing, and operation of all types of insurance plans, pension plans and benefit plans. Students will acquire a broad background in economics, finance, and risk management as well as technical aspects of actuarial science. They will be expected to communicate fluently, both orally and in writing,... more
Applied Mathematics
At some schools, there is a single mathematics department, whereas others have separate departments for Applied Mathematics and Pure Mathematics. It is very common for Statistics departments to be separate at schools with graduate programs, but many undergraduate-only institutions include statistics under the mathematics department. If you are thinking about a career in Applied Mathematics, you might want to consider the following emerging fields: Computational... more
The major disciplines within mathematics first arose out of the need to do calculations in commerce, to understand the relationships between numbers, to measure land, and to predict astronomical events. These four needs can be roughly related to the broad subdivision of mathematics into the study of quantity, structure, space, and change (i.e., arithmetic, algebra, geometry, and analysis). In addition to these main concerns, there... more
Statistics encompasses the collection, analysis and interpretation of data. Statisticians work with theoretical and applied statistics in both the private and public sectors. The core of that work is to measure, interpret, and describe the world and human activity patterns within it. It is common to combine statistical knowledge with expertise in other subjects. The applications are varied. Statisticians apply their knowledge to production, research,... more