What is an Actuary?
An actuary is a person who evaluates the likelihood of certain events and creates plans to deal with those events.
How Does an Actuary Work?
Actuaries must understand business, have good analytical skills, and be aware of how human behavior affects risk. In the insurance business, for example, actuaries use an issuer's costs to calculate premiums for policyholders. They also make estimates of damage after big events, such as hurricanes or earthquakes. Additionally, they may use medical records, geological information, or other data to predict things such as how long a customer will live or where the next big earthquake will occur. Comfort with statistics is key.
Actuarial work typically requires a bachelor's degree, and actuaries must also pass a series of exams to earn a professional designation through the Casualty Actuarial Society or the Society of Actuaries. It can take six to 10 years to pass all the tests. In 2010, the median pay for actuaries was $87,650 per year.
Why Does an Actuary Matter?
Because actuaries manage risk, many work in the insurance industry, but many also work in private industry, as consultants, at accounting firms, in banks and in other organizations.