Introduction to Actuarial Science
overview
What is an actuary?
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Actuaries put a price tag on future risks. They have been called financial architects and social mathematicians, because their unique combination of analytical and business skills is helping to solve a growing variety of financial and social problems.
Actuaries make financial sense of the future. How? An actuary applies mathematical models to problems of insurance and finance. To be more specific, actuaries improve financial decision making by developing models to evaluate the current financial implications of uncertain future events. If you've never met an actuary, that's not unusual. The actuarial profession numbers only about 19,000 people in North America. But don't let that small number fool you. Actuaries put their special problem-solving skills to work in many different business situations, and their work has had an influence on people's lives for more than a century. Actuaries make a difference. Their calculations and projections are the backbone of the insurance and financial security industries. Actuarial work involves lots of math, but actuaries must also be up-to-date on business issues and trends, social science, law, and economics. In other words, actuaries have a well-rounded business approach to problem solving. And they must be good communicators to explain things to non-actuaries. Actuaries are key players on a company's management team. They are well paid, and they like what they do for a living. (From www.beanactuary.org/what) |
The Actuarial Career Path
The Actuarial Profession and the Future
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Is being an actuary a good career?
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The Wall Street Journal did the math to "find good jobs" and ranked being an Actuary the second best job for 2018.
Click here to learn more. The Jobs Rated Almanac has published previous editions. In two editions, "Actuary" was frequently rated second best. The editors compile statistics on 250 occupations, from accountant to zoologist. The occupations are ranked on the basis of six key criteria: environment, income, employment outlook, physical demands, security and stress. The data comes from government sources, such as the U.S. Bureau of Labor Statistics and the U.S. Census Bureau, as well as studies from trade associations and industry groups. |
The Ten Best Jobs:
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where do actuaries work?
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Actuaries work for a variety of employers, including:
Percentage by Type of Employer Check out our list of Penn State Actuarial Science Club members with full-time jobs or internships to get an idea of which companies love to hire future actuaries at Penn State!
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The insurance industry can't function without actuaries, and that's where most of them work. They calculate the costs to assume risk - how much to charge policyholders for life or health insurance premiums or how much an insurance company can expect to pay in claims when the next hurricane hits Florida.
Actuaries provide a financial evaluation of risk for their companies to be used for strategic management decisions. Because their judgment is heavily relied upon, actuaries' career paths often lead to upper management and executive positions. When other business that do not have actuaries on staff need certain financial advice, they hire actuarial consultants. A consultant can be self-employed in a one-person practice or work for a nationwide consulting firm. Consultant help companies design pension and benefit plans and evaluate assets and liabilities. By delving into the financial complexities of corporations, they help companies calculate the cost of a variety of business risks. Consulting actuaries rub elbows with chief financial officers, operating and human resource executives, and often chief executive officers. Actuaries work for the government too, helping manage such programs as the Social Security system and Medicare. Since the government regulates the insurance industry and administers laws on pensions and financial liabilities, it also needs actuaries to determine whether companies are complying with the law. (From www.beanactuary.org) |
am i suited for actuarial science?
If you excel in Mathematics and/or Statistics, consider Actuarial Science. Actuarial Science is often found in a university's Mathematics Department, but some schools offer it under their Statistics Department or Business School. Penn State is unique, as we offer the major under all three. It can help to place out of Calc I by getting a 5 on your AP Exam. See this Math Dept website on whether to place out of Calc I and II.
Find out if you are suited for Actuarial Science by taking this Quiz!
- Actuarial Courses (after Calculus I, II, III, and Matrices):
- Probability Theory - P Exam
- Financial Math (Interest Theory & Introduction to Derivatives Markets) - FM Exam
- Actuarial Math (Financial Math & Probability Theory combined to price Insurance & Annuities) - MLC Exam
- Financial Economics (Advanced Finance & Derivatives Markets) - MFE Exam
- Loss Models & Credibility Theory (for pricing Health and Casualty Insurance & reserving) - C Exam
- Exams
- Our courses cover all the material in the first 5 actuarial exams. Penn State has more students passing actuarial exams each year (over 150) than any other school in the U.S.
- Two exams will help you acquire an internship (Pay is typically $25/hour, plus housing)
- Three exams will help you get a job
- Jobs
- In major cities like Boston, Hartford, NYC, Philly, Baltimore, Washington DC, Richmond, Cincinnati , or Louisville
- In smaller cities like Harrisburg, Pittsburgh, Erie, Princeton, Buffalo, or Danville
- Actuaries work for:
- Insurance Companies - life insurance, annuities, health insurance, liability insurance, property & casualty insurance
- Consulting firms - help companies set up pensions or health plans; also advise insurers
- U.S. Government - Social Security, Medicare, IRS, Pension Benefit Guaranty Corporation
- Other - Wall Street investment banking firms, risk management positions in industry, and more...
- Actuaries typically start doing the math & computer programming work at their employer. With time and experience, actuaries often become officers, leaders, and even company presidents
- How to describe actuaries in a few simple words
- Actuaries make projections of the future to help people manage their financial risks
Find out if you are suited for Actuarial Science by taking this Quiz!
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