A few years back, I spoke with a gifted student in math. "I'm looking for a job where I actually use math. I love analytics and number-crunching. But there's just one catch, I don't want to deal with a lot of people."
"Anything else?", I asked
"I'd like to get paid good money", the student replied.
Ah yes, wouldn't we all! First, let me ask a few questions:
- Do you love math?
- Do you like to crunch numbers and find the hidden story behind the data?
- Do you prefer to do this while avoiding a bunch of people?
- Do you want to make 6 figures base salary with hefty bonuses?
If you answered Yes to all 4 questions, I have just the career for you. A 2016 Glassdoor study
puts it at one of the top 25 highest paying jobs in America. With a median base salary over 6 figures, math lovers might want to apply to become an actuary.
Risk Manager Behind the Scenes
What exactly is an actuary? Actuaries evaluate risk. Whether it's pensions for retiring employees or insurance premiums, actuaries quantify risk to make sense of the future. Think Doc Brown in the movie Back to the Future. However, actuaries do not have a Delorean. Instead, they use data to forecast potential impact of risky events.
Insurance is protection against risk. Before natural disasters strike, actuaries try to manage the damage impact. Before a person gets in their car, they are required to have insurance. Before they get insurance, actuaries calculate accident probabilities. Using your age, location, car value, and other factors, actuaries price out the amount of premium you pay to manage this risk. Using data on people as well as market data, actuaries assign probabilities of risky events.
School After School
Before you dive in full speed into an actuarial career, it helps your salary and status to get credentialed. Both insurance and pension actuaries need to pass a set of exams to get their fellowship credentials. As an actuarial fellow, you designate yourself an expert in risk management. Passing these exams grants you instant credibility as a risk expert.
Take caution though - the journey to fellowship is difficult. The exams are designed to weed out many candidates. Using a score system with an unforgiving curve, even the most prepared candidates may take multiple times to pass an exam. Employers give you paid time off to prepare for actuarial exams. You'll need it, as it's not uncommon to spend 400 or more hours in 3 months to study for one exam! It's not uncommon for exam takers to eliminate their social life for 3 months just to prepare. You'll need all the help you can get, because the average pass rate
for an exam sitting is 30-40%.
Now why would somebody sign up for a full-time job, and elect to study 1,000 hours on top of their job for the first 6-10 years? The answer is wealth and status. Pass all the exams, and you can expect to earn 150,000 to 200,000 per year
. With each exam you pass, your salary increases. When you complete all your exams and attain fellowship, salary plus bonus plus ancillary benefits flows like gushing water from a fire hydrant.
Perpetual Risk = Perpetual Employment
Life is full of risk. Companies with pensions or insurance need to manage that risk all the time. As the floating rock we live on spins, risk factors change. The good news for actuaries means perpetual employment. Actuarial jobs provide a constant challenge, new developments, and an unemployment rate hovering near 0%.
As new insurance products are created, as people get older, and as laws related to risk change, the need for actuarial minds grows like plants in the rain. If your looking for a challenging and lucrative career using math skills and problem solving, take a look at actuarial science.