Everything You Need to Know About an Actuarial Science Degree
Some of you might be saying, "what in the world is this degree for?" In real life, actuarial professionals work in risk management, using sophisticated mathematics and statistics to analyze investment risks. There are specific requirements for this Bachelor of Science degree, various career opportunities and an optimistic job outlook.
How to Get a Bachelor of Science in Actuarial Science
If this is a degree you are considering while still in high school, the following courses are very useful:
- AP Calculus BC
- Accounting
- AP Macroeconomics
- Computer science
- Business
- AP Statistics
- AP Microeconomics
The full bachelor's degree has core courses in:
- mathematics (including linear algebra, calculus, finance mathematics, probability and actuarial mathematics)
- statistics
- risk modeling (statistical learning, generalized linear models, time series models, principal components analysis, decision trees and cluster analysis)
- risk management (analysis of the risk management process, individual and business property and liability loss exposures, social insurance programs, and the effective use of financial planning products such as pension plans and life, health and disability insurance)
- investments, financial markets, employee benefits and retirement programs (examines individual and group life, health and disability insurance, annuities, employee benefit plans, retirement plans, and social insurance programs).
During the junior and senior years of your actuarial science degree, you will find placement for an internship and prepare for actuarial exams.
Each university will also have its own requirements for general education to fulfill the requirements for a bachelor’s degree. You can expect to take courses in English, natural sciences, social sciences, history, political science, foreign language, fine arts, health and wellness and business writing. These categories vary from school to school, but this is a good, representative list.
Career Opportunities
There are five primary areas that actuarial science degree holders can find employment:
- Insurance
- Consulting
- Government
- Higher Education
- Banking and Investment Offices
In the insurance field, actuarial professionals are called actuaries. Actuary pros use their analysis skills to determine the probability of occurrences that cause financial loss, like death, injuries, disabilities, sickness or property loss. These risk analyses are used primarily in life insurance, health insurance, homeowners or renter’s insurance, and auto insurance applications from potential customers.
Actuarial consultants merge the skills of an economist, statistician and probabilities forecaster into one process to offer good financial advice. These pros spend a lot of time crunching numbers and running "what if" scenarios concerning current trends and probable future changes. They build relationships with their clients to ensure they have enough information to help clients make the right investment choices for their retirement plans. They calculate the probabilities of work-related injuries, accidents and events beyond the company's control, like natural disasters.
Those with an actuarial science degree can also find employment in the government. The federal government uses actuaries to evaluate proposed changes to Social Security, Medicare or other entitlement programs, as well as carry out monetary and demographic studies. Actuaries who work for state governments review and regulate what insurance companies are charging their customers.
Finally, in banking and investment offices, actuaries are highly valued. Investment banking is usually erratic and volatile. Investment banking involves a lot of risk while investing in the stock market or during corporate mergers and acquisitions. An investment banker with actuarial skills is well prepared to assess how much risk is connected to each merger, acquisition or investment.
Job Outlook
According to the Occupational Outlook Handbook from the Bureau of Labor Statistics, "The median annual wage for actuaries was $102,880 in May 2018." There were 25,000 jobs held by actuaries in 2018.
Employment for actuary graduates was expected to rise 20% between 2018 and 2028, which is much faster growth than the average for all occupations. However, because it is a narrow field, the growth will only create about 5,000 new jobs over the 10-year period. Actuaries will be needed in the insurance industry, banking and finance, government and higher education to calculate the costs of new, emerging risks.
Conclusion
Actuarial science is a niche market that is growing at a rapid rate. While there may be only 5,000 new jobs available in the field in the next eight years, there are very few actuarial science majors in universities across the country. Given the high median salary, those thinking about earning an Actuarial Science degree should think carefully about how the job market will look upon graduation and which industry they would like to work in the most.