Actuarial science and the insurance industry owe their existence to each other, and the industry remains the top employer of actuaries in the business world. Insurance provides some of the best training and best salaries for actuaries. It's a demanding business, but can be rewarding in a variety of ways.
The life and health insurance industries are the foremost employers of actuaries. On the surface, the demands are very simple -- make sure policyholders are paying enough to cover the payouts necessary every day. Naturally, it's far more complicated than that. Changing demographics and a steady stream of medical breakthroughs require insurance actuaries to question their assumptions on an almost daily basis. "They just recently published a piece on hormone therapy, saying that women who stopped taking it had a sharply decreased breast cancer risk," says a top-level actuary at a major health insurance group. "So we have to go in and change the models in so many different ways. Our breast cancer model, our menopausal models, our drug cost models, everything. That one finding had us adjusting nearly everything we do."
As the baby-boomer generation continues to age, there will be a continued call for actuaries in the insurance industry to help develop strong policies and insurance funds. This generation, in particular, is active like no other. They're living longer, for example, but they're also out playing sports, exploring, traveling, etc., and their potential for other kinds of injuries, diseases and mishaps is higher. Actuaries will remain busy in these fields for decades.
The property insurance industry is also hunkering down for change. The onslaught of Hurricanes Katrina and Rita were a wake-up call for most insurers, and the industry is now carefully modeling a much broader array of potential disasters. "Katrina was the big 'what-if' scenario come to life," says an actuary working on post-Katrina disaster models. "It made us all look at what we were doing. It wasn't enough."
Immense change, of course, brings opportunity. Insurance actuaries are being challenged to think more broadly, to mitigate a wider variety of risk and to help maximize company profits in a time of great uncertainty. There's perhaps more pressure in the insurance industry than there was just 20 years ago & but with it comes greater rewards. Not only are good actuaries in higher demand, but the work will help save money, property and lives.
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