Actuarial Sciences Programs and Schools

Calculating the odds of certain events, either implicitly or explicitly, is a core element in human decision-making, so some version of actuarial science has been around since the early discovery of complex statistics. It’s an extremely old field with some very curious beginnings.

But in the last few decades actuarial science really came into its own, and is now synonymous with the generous salaries and bonus structures reserved for the biggest brains in the insurance and finance industry.

Today’s actuaries have some serious clout in the business world, sought after and actively recruited even by firms outside the insurance industry. It’s that unique ability to carefully weigh an endless number of factors relative to one another and see through the noise, calculating risk and avoiding liabilities to the tune of billions that makes actuaries so valuable.

 

That means pulling down some big numbers of their own in the process, but that kind of compensation doesn’t come without a first-rate education and passing the all-important examination series it takes to earn credentials through one of the professional actuarial societies.


Attaining Professional Standing as an Actuary

Degrees in Actuarial Science

Working as an Actuary

What Kind of Salary Can Actuaries Expect?


Actuarial science as we know it today came on the scene with the emergence of the marine insurance industry in the 1300’s as global shipping and commerce boomed. Just like today, many businesses at that time found it necessary to calculate the likelihood of different outcomes to avoid gambling too much on too risky a venture.

But the breakthroughs it took to make those kinds of calculations work reliably didn’t come until the 1600s, and when it did, it didn’t come from insurers, but from a couple well-known astronomers with an intense interest in probability theory. That exploration of probability was actually derived from stellar calculations, which they were able to apply to finding mortality rates that proved surprisingly accurate. Their work was among the first that allowed reliable actuarial calculations of risk and the ability to balance assets and liabilities.

Piggy-backing on those methods, generations of number-crunchers disappeared into the back offices at shipping companies, finance and insurance firms, cranking out reliable data that informed everything from pension payouts to car insurance rates. The field was labeled with all the stereotypes typically foisted on people smart enough to perform intricate calculations, but like Gates, Jobs and Wozniak, brilliance transcended labels to elevate the status of skilled actuaries.

Decades on, running in parallel with the advance of high-powered computing, actuarial science established itself further as one of the key forerunners of the modern field of data science. In fact, data science is only known by that name because a statistician, Professor C.F. Jeff Wu, felt the science of statistics was deserving of a name-change to something that better fit its role in the 21st century.

Now that analytical brain power beats simple salesmanship every time, and numbers gurus are out-earning almost everyone else in the office, actuaries have cemented their status as rock stars in a diverse array of industries.

Attaining Professional Standing as an Actuary

Actually becoming an actuary is a serious business. For certain types of actuarial positions, such as those certifying pension fund formulations, you’ll have to actually become professionally licensed by the Joint Board for the Enrollment of Actuaries of the Department of Labor and Department of Treasury.

But for most professional actuaries, achieving the professional status to be able to certify or sign professional opinions in the field is ultimately determined by holding a membership in the American Academy of Actuaries.

To earn that membership, or to get hired in most professional positions, your certification will come through one of two professional organizations:

  • Society of Actuaries – Offers exams in life and health insurance as well as pension, financial, and investing actuarial work.
  • Casualty Actuarial Society – Examinations cover property and casualty insurance and risk calculation, including for fire, accidents, medical malpractice, and personal injury.

In both cases, you progress first to an Associate level, and then become a Fellow, through a series of rigorous tests; as many as five before you can even become an Associate. Both societies deliver highly specific online courses to prepare you for these exams, and the process can take years.

Despite the online coursework that supports your path to those credentials, it has to be built on a strong elemental foundation in mathematics, statistics, and probability. These are the skills that are absolutely fundamental to succeeding at even the most basic level in the field, so it’s that kind of formal college education you’ll be starting with.

Degrees in Actuarial Science

Because it’s a field with a multi-phased credentialing process, it’s not uncommon for the mathematically inclined to choose the path early on and start taking steps in that direction. Anyone with the right kind of mathematical chops and a goal-oriented approach to career and life will love the process of graduating through the ranks to eventually summit the peak that only an elite few get to look out from.

There are no associate’s level degrees in actuarial science specifically, but if for some reason you are not in a position to start off with a full-scale bachelor’s program, it is still possible to take your first step toward becoming an actuary with an associate’s degree. Most commonly, an AA or AS in accounting, math, or statistics would find favor with future bachelor’s programs. You’ll want to check ahead to ensure that the credits from your associate’s college are transferrable to the college where you intend to continue your studies, however.

It is extremely common to begin the certification process after earning a bachelor’s degree, working up to an Associate status in one of the societies, before proceeding on to a master’s-level education. In fact, some master’s programs prefer to see applicants who have passed one or more of the professional exams in the field prior to applying for advanced studies.

Bachelor and higher degrees are commonly offered as degrees in science (BS/MS) although you may occasionally find a Bachelor of Arts version. They are multidisciplinary programs that range across departments from mathematics to statistics to business. No matter which department a school ends up housing the program in, coursework will include:

  • Calculus and linear algebra
  • Economics and finance
  • Accounting
  • Probability and statistics
  • Actuarial mathematics
  • Computer science

Internships are a standard part of these degree programs, allowing you to participate in actual actuarial calculations and work in the field with professionals in a variety of industries.

And, of course, it’s your internship that would very often lead to your first job in the field. With firms actively recruiting talent straight out of college to get the most promising students to sign on even before graduating, they use this time to identify the best and brightest and begin fostering relationships early on. It’s kind of like being a star collegiate athlete. If you’ve got what they want, those firms will go to great lengths to court you and make you part of the team. The biggest names in insurance are known for sponsoring orientations in the lead-up to internships as a way to build a sense of loyalty and comradery, often putting prospects up in high-end hotels during these multi-day events.

You will also find increasing numbers of these programs, like every other college degree, available online. Online coursework can have a lot of advantages for individuals who value flexibility, from allowing you to complete your coursework at any hour of the day or night through asynchronous classes, to letting you stay in your town instead of having to relocate to attend a top-ranked program.

Bachelors Degrees in Actuarial Science

A bachelor’s degree is the minimum education that you need for a career in actuarial science. Many reputable schools offer interdisciplinary programs in actuarial science specifically; you may also find that a degree in statistics or mathematics, with suitable elective choices, gets the job done.

A BA will differ from a BS in that you will find a heavier concentration on general studies and liberal arts coursework in a BA, while a BS has more strictly science-focused courses. In both cases, however, you will receive both specialty training in actuarial and mathematics subjects alongside the general requirements for a bachelor’s degree.

Masters and Doctoral Degrees in Actuarial Science

At the master’s level and higher, you will be exposed to more advanced analytical and mathematical training for actuarial science. This will include a more in-depth study of quantitative risk analysis, statistics, and econometrics as well as advanced theoretical studies in predictive risk modeling and insurance ratemaking. Master’s programs often include more advanced computational studies, using big data and machine learning techniques in specific actuarial scenarios.

Master’s and doctoral programs also often offer considerably more customization of your studies, so you can focus on applications in the particular industry you hope to practice in, whether finance, insurance, or something else.

Admissions can be competitive, with professional experience in the field and your bachelor’s program GPA carefully considered. Although many master’s programs do not formally require a four-year degree in a quantitative or statistical field, you will generally have to prove in some way you have the quantitative and mathematical foundations to succeed in advanced studies before you will be accepted.

As with many fields, doctoral degrees are primarily considered a path for research and academic pursuits more so than for active employment in the field.

The Importance of Accreditation in Actuarial Science Degree Programs

Accreditation is the process that schools go through to obtain assurance from independent third parties that their programs and processes are fully in accordance with modern American business when it comes to academic quality and rigor. As someone going into an accounting-related field, you could consider it a sort of external audit. It also helps ensure you get the best possible student experience, since everything from facilities to professors are considered in the accreditation process.

The major regional accreditors in the U.S. recognized by the Department of Education and the Council on Higher Education Accreditation evaluate schools in a particular part of the country and offer institution-level accreditation. This kind of basic accreditation is pretty much a given in the highly regulated world of higher education where schools have to meet basic standards to be eligible to receive Title IV funded tuition reimbursements to cover students eligible for aid. Any school serious about the business of education and operating in the U.S. is more than likely to have this basic form of accreditation.

Aside from that, you have specialty accreditation that can be granted to individual business schools and programs. These specialty accreditors take an intensive look at every aspect of a school’s operations, from the establishment of curriculum, to funding mechanisms, to the hiring and review of instructors.

Though there are no specialty accrediting bodies for degrees in actuarial science specifically, since the field is heavily related to accounting and business practices, it may be worth checking to see if the broader business department or school holds a specialty business accreditation from one of these three accreditors:

In addition to accrediting business schools and departments, ACBSP is the one specialty accreditor that also offers a separate accreditation to cover accounting curriculum included in programs housed at accredited schools.Getting your degree from a school or program that holds any of these specialty accreditations isn’t required to become a fellow, and it’s not an expectation that all employers have, but it is something worth paying attention to. If the schools you’re looking at have this kind of accreditation, consider it a major plus.

Finally, the SOA maintains a list of Centers of Actuarial Excellence, which includes rankings of many American schools according to their course coverage of SOA exam subjects, graduate quality, industry connections, and overall scholarship in the field. Although this does not have any bearing on your eligibility to take SOA or CAS exams, it serves as another indicator of program quality and rigor.

Working as an Actuary

Although actuaries are traditionally associated with the insurance industry—and, according to 2019 Bureau of Labor Statistics (BLS) data, 71% of them are employed in that field—there are actually a wide range of industries constantly in search of actuarial talent. Actuaries can find lucrative positions at:

  • Consulting firms
  • Human resources and employee benefits organizations in any industry
  • Hospitals
  • Investment firms and banks
  • Federal and state government agencies

Any company or organization that deals in risk needs actuaries on the payroll. Like so many things, this demand can be clearly seen in the numbers. BLS job growth projections show the actuarial field expanding by 20% between 2018 and 2028, a lightning-fast rate of growth that far out-paces similar professions and the overall job market over that period.

The projects that actuaries work on every day are fascinating, taking you through diverse data sets that can go back hundreds of years, before you then begin devising methods of weighing that data and using high-performance computing systems to calculate the odds of calamity. Actuaries are kept busy evaluating flood risks, the outcome of improved automotive safety standards in reducing accident mortality rates, and the effects of global climate change on forest-fire outbreaks. It’s all very practical work despite the theoretical basis, boiling scientific concepts down into hard numbers that translate into things like life insurance payouts and car insurance rates.

Of course, actuaries are well-equipped to slide over into just about any numbers-heavy accounting-related field. And a close relationship with the quantitative field of data science offers a path into high tech and predictive calculations in many new industries that are suddenly discovering the magic of using big data to forecast risk and demand… something actuaries have been doing for hundreds of years. Data scientist jobs are listed as two out of the top three fastest growing professions in the technology industry for 2020 according to tech job search engine Dice, and positions are opening up all around the country.

What Kind of Salary Can Actuaries Expect?

No one knows their own value as well as an actuary. If you ever need to negotiate for a higher salary, you can always run the numbers on the financial components of risk your company would take on if not for your well-paid services to help avoid them. Of course, you don’t want to come across as cocky, no matter how confident you are that your calculations pencil out. Maybe just try asking nicely first.

You shouldn’t have much trouble getting that raise, though.

Even with related career options to explore in analytics and data science, becoming an actuary in the conventional sense is the primary path for most graduates of actuarial science degree programs, and it’s probably the best choice when you take a look at what they’re earning. According to the BLS, in 2019 the median pay for an actuary was $108,350 per year, and then went literally off the charts as you follow the salaries up the range to the 90thpercentile, where it exceeds the BLS maximum reporting threshold of $193,600. This makes salaries in the field easily the highest of any of the professions you are likely to get into with actuarial skills.

For comparison, the Robert Half 2021 Salary Guide for careers in accounting and finance showed market risk analysts with a few years of experience commanding starting salary offers of around $129,000.

An actuarial science degree can also take you into statistical work, which is a more broadly applicable field that came in at number six on U.S. News & World Report’s list of 100 best jobs in America. They cite strong job growth and a median salary of $87,780 as being among the reasons for the high ranking, which beat out perennial favorites like doctors and veterinarians.

With a near bottomless demand for actuarial talent, deeply fascinating work that very few of even the best minds in mathematics are capable of doing, all backed up by the kind of high salaries only reserved for that sort of talent, a degree in actuarial science is one of the best bets out there for a career in an accounting-related field.