ACTUARIES California Occupational Guide Number 318 Interest Area 11 1995
THE JOB
ACTUARIES are responsible for designing and evaluating insurance, annuity and pension plans that meet people's needs and are financially sound. Actuaries forecast the probabilities of insured loss based on analyses of past occurrences. They assemble and analyze statistical data and construct tables calculating the probability of death, disability, injury, unemployment, retirement and property loss. They use the information to develop insurance plans and calculate profitable, competitive insurance premium levels. They determine policy contract provisions for each type of insurance.
The number of Actuaries will grow thirty percent by the year 2005
After developing plans, Actuaries monitor the claims activity to see if premiums are adequate to cover losses. They must also determine the amount of cash reserves needed to assure payment of benefits. They work closely with programmers, underwriters, accountants, claims experts, and senior management. They rely more and more on computers to assist them in their work. Actuaries typically specialize in either life and health insurance, or in property and casualty insurance. More than half of them work in the insurance industry, especially for the industry giants. Consulting actuaries contract to insurance agents, small insurance firms and brokers, or they may design employee welfare and pension plans for private firms and unions. Other Actuaries work for government agencies and are usually concerned with a particular insurance or pension program - such as Social Security for federal, or employee retirement pensions or workers' compensation insurance for the State.
Actuaries must keep up with legislative, economic, social, medical and other trends that affect insurance practices.
WORKING CONDITIONS
Most actuaries are based in headquarter offices and work in conditions common to financial institutions. Consulting actuaries work in their own offices, but are likely to spend much of their time in the field with clients. All do some traveling to visit branch offices and to attend actuarial society and other professional meetings.
EMPLOYMENT OUTLOOK
The following information is from the California Projections of Employment published by the Labor Market Information Division.
Estimated number of workers in 1990 1,050 Estimated number of workers in 2005 1,360 New Jobs 310 Percent Change 1990-2005 29.5%
An additional 250 openings will occur as workers retire or leave the job for other reasons.
While this occupation is growing faster than the average for all occupations, actual gains will be just over 300 workers in this small occupational group. The need to replace workers who leave the labor force should provide continual job opportunities for qualified job seekers throughout the projection period.
Job opportunities will be best for new college graduates who have passed at least one of the actuarial examinations given by professional actuarial societies while in school.
WAGES, HOURS, AND FRINGE BENEFITS
Salaries vary with educational levels and experience. Actuaries are typically given merit increases as they gain experience and pass successive examinations.
The national average for entry level is $31,800 per year. Pay for Associates (successful on three or more exams) averages $46,000 per year. Fellows, who have completed a series of ten exams and have considerable experience, earn an average of $65,500 yearly. Job security and retirement benefits in the insurance industry are generally above average.
Actuaries in federal government jobs are paid at GS-5 to GS-15 levels. The starting salary for GS-5 is $18,340 annually. To start at the GS-7 level of $22,717, new hires must have 60 credits of Society of Actuaries (SOA) coursework or successful completion of two exams. The GS-15 level starts at $66,609 and advances to a mid-point of $77,709. Only a few Actuaries are paid at the top federal level of $86,589.
State agency monthly salaries for Actuaries begin at $4,415; with experience and additional training, they go up to $6,450.
Actuaries work a five-day week, averaging 35 to 40 hours. Benefits they commonly get are paid sick leave, vacation and holidays; medical, dental and vision insurance; and retirement plans.
ENTRANCE REQUIREMENTS AND TRAINING
Most employers require job candidates to have a bachelor's degree in mathematics or statistics, preferably with a specialty in actuarial science. Some companies will accept a major in economics or business administration if the applicant has a strong background in calculus and statistics. Courses in insurance law, economics, accounting, computer science, speech, and effective writing are also helpful.
High school students should take math and computer science courses.
It usually takes five to ten years to complete the series of ten exams required for full professional status as an Actuary. Actuarial students should take the first two exams while still in college to qualify for higher starting salaries. Candidates for careers in pension planning need to pass a separate actuarial exam to become an Enrolled Actuary. To become associates, Actuaries must pass the first five exams given by the Society of Actuaries or the first seven given by the Casualty Actuarial Society. After passing a series of ten exams, they receive full membership and the title of fellow of their society. The first three exams are common to both societies.
ADVANCEMENT
Advancement to higher level positions depends largely on job performance and the number of actuary examinations passed. Because of their broad knowledge of the insurance field, many Actuaries advance to executive positions in underwriting, accounting, and data processing departments. Many top executives in the insurance business started as Actuaries.
FINDING THE JOB
Actuaries find jobs by networking, especially through their professional associations. They also find job leads in college placement offices and by sending resumes directly to insurance companies, actuarial and employee benefit consulting firms, health service organizations, casualty insurance rating bureaus, large industrial corporations, labor unions, universities and colleges. Information about government agencies recruitment is available from the federal Office of Personnel Management, State Personnel Board and county and city personnel departments.
ADDITIONAL SOURCES OF INFORMATION
Society of Actuaries 475 North Martingale Road, Suite 800 Schaumberg IL 60173 (708) 706-3500
Casualty Actuarial Society 1100 North Glebe Road, Suite 600 Arlington, VA 22201 (703) 276-3100
RELATED OCCUPATIONAL GUIDES
Mathematician No. 66 Statistician No. 300
OCCUPATIONAL CODE REFERENCES
DOT (Dictionary of Occupational Titles, 4th ed.Rev 1) Actuary 020-167-010
OES (Occupational Employment Statistics) System Actuaries 253130
Source: State of California, Employment Development Department
Labor Market Information Division, Information Services Group,
(916) 262-2162.
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