Sometimes bad things happen. Now and then, good things happen, too. And one could make the case that people -- and companies -- spend most of their time trying to avoid the bad and maximize the good. Some people even do that for a living, and in today's complex business environment, actuaries are the masters of identifying, mitigating and minimizing risk.
Once primarily working in the insurance industry, actuaries are now found throughout corporate America, helping executives make intelligent and informed financial decisions. In addition to helping insurers mitigate the chances of losses, actuaries weigh risk in pension funds, stock and bond portfolios and even hedge funds.
And the actuary's role has moved beyond the financial industry. Companies dealing in commodities, such as oil conglomerates or mining concerns, use actuaries to help weigh the risks and rewards of new exploration or current pricing strategies. And nearly any company can now employ an actuary to help determine and alleviate risks for any business venture -- launching a new product, perhaps, or expanding production facilities.
It's inaccurate to say that actuaries hate risk. They'll be the first to tell you that risk is an inherent part of doing business -- an inherent part of life, really -- and that their job isn't to avoid risk. Instead, they face risk head on, weighing the chances of any given eventuality and coming up with solutions to take advantage of the good possible outcomes and minimize the fallout from the bad.
An actuarial career is one of the most creative options a statistician, economist or mathematician can have. "We are the academics in the business world," says Ron Gebhardtsbauer, senior pension fellow at the American Academy of Actuaries. Yes, a strong mathematics background is necessary, but applying those skills to real-life situations is a creative challenge. Actuaries are required to think beyond the narrow constraints of numbers or business plans to ferret out unforeseen risk and plan for it. The combination of out-of-the-box thinking and scientific analysis makes actuarial careers some of the most challenging in the business world.
They're also among the most rewarding jobs out there. Salaries right out of college range from $40,000 to $50,000, and by the time you're finished taking all of the necessary licensing exams and have some experience, $150,000 to $250,000 salaries aren't uncommon.
An actuarial career demands diligence and hard work. In addition to college and university experience, the Society of Actuaries and the Casualty Actuarial Society -- the two main organizations within the profession -- offer a series of exams, which many employers require. There are no less than seven exams for actuaries to become associates of the CAS, and another two for full fellowship. The SOA has a point-based system of courses and exams, but the result is the same. Be prepared to take a lot of tests throughout the early part of your career, even before you receive your bachelor's degree.
As an actuary, you'll be weighing in on major decisions every day, and your analyses will be used by top decision makers in the financial world. To say that the actuary's work can make or break a company isn't the massive overstatement one would think. When companies venture into unknown territory, it's the actuary that helps navigate a path.
That can lead an actuary to greater responsibilities within a company. Actuaries have gone on to numerous C-level positions throughout corporate America, including chief financial officer, chief operating officer and chief executive officer. (The recent creation of the chief risk officer position, despite its seeming relation to actuarial science, is primarily a role for companies' regulatory compliance chiefs.) Who better to manage a company than someone whose career is based in managing and overcoming risk, after all?
There are also roles for actuaries beyond the Fortune 500. Some actuaries join consulting firms, providing risk-management services to small to midsized companies, and even large firms will go outside to a consulting firm for a special project now and then. Actuaries also manage pension funds, one of the oldest and most respected roles of the actuary. And the federal government is making increased use of actuaries in reducing government spending and preparing to manage risk -- financial, social, even military.
In this book, we will discuss the ins and outs of actuarial sciences and its evolution through the 20th century. We'll look at the different ways actuaries are employed in the insurance industry, other parts of the financial services industry and the rest of corporate America. We'll also take a look at actuaries working for government and nonprofits.
We'll also discuss the basic and ongoing education for actuaries, and how you can prepare for a career as an actuary. Finally, we'll tell you about real actuaries throughout the nation and the different roles they play.
Actuarial careers are widely regarded as some of the best in America. This book will show you how to get there.
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