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actuary noun Definition, pictures, pronunciation and usage notes

actuary noun Definition, pictures, pronunciation and usage notes

For the next hour and a half, the consultant might discuss his company’s interpretation of an IRS pension regulation with other consultants and write a memo to document it so they are consistent whenever it applies in the future. “The ‘where’ is usually in the office, because we’re so much more productive face-to-face,” he said, but his consulting firm’s employees are not in the office on the weekends. “We take all our planned vacations, but we might keep up on email while we’re out or do some work on a plane,” he added.

These examples are programmatically compiled from various online sources to illustrate current usage of the word ‘actuary.’ Any opinions expressed in the examples do not represent those of Merriam-Webster or its editors. The Society of Actuaries promotes several different actuarial exams to demonstrate competency https://1investing.in/ in the field. Actuarial science is also applied to property, casualty, liability, and general insurance–instances in which coverage is generally provided on a renewable period, (such as yearly). For example, disability rates are determined for veterans that may have been wounded in the line of duty.

  1. They contribute to the company’s financial stability and long-term success by ensuring that insurance premiums align with risks and that pension funds are adequately funded.
  2. The median annual salary for an actuary in the United States in 2021 was about $105,900, according to the BLS.
  3. Many tax accountants work six or more days a week and 10-plus hours a day during tax season, which stretches from January through April.
  4. Her work varies considerably from day to day, depending on the projects she’s tackling.
  5. Actuary ranked second in best business jobs and third in best jobs for STEM.
  6. ActuaryActuaries are specialists who assess and manage financial risks, particularly in the insurance and pension industries.

According to the Bureau of Labor Statistics, the number of actuaries employed is expected to grow 23% from 2022 to 2032. For this reason, many universities offer educational degrees and courses on actuarial science. In addition, there are professional designations for those interested in pursuing the field. A bachelor’s degree in accounting or mathematics is a huge plus for anyone considering a career as either an accountant or an actuary. Perhaps more than any other profession, actuaries deal with tons of data.

“Pricing actuaries estimate future losses and expenses so that we can charge an adequate price for insurance,” Ford said. Actuaries tend to work for a specific area within the company, such as personal lines (auto and homeowners), specialty lines (boat, motorcycle, etc.), or business insurance. Before joining the company full-time, she worked as an intern for Allstate for two summers. She is currently a pricing actuary for property and casualty insurance. To qualify for certification, an aspiring actuary must complete coursework in economics, applied statistics, and corporate finance. In fact, actuaries may work for any company or government agency that needs to analyze risk.

Short-term and long-term bond rates greatly influence pension plans and their investment strategies. Bonds are debt instruments issued by governments and corporations that typically pay a periodic interest rate. For example, in a low-interest-rate environment, a pension plan might have difficulty earning income from the bonds that it has invested in, which increases the probability that the pension plan could run out of money. Both professions allow for a very balanced work-life schedule, especially compared to that of many of their peers in the financial industry. Most surveys and studies, such as Glassdoor, consistently rate accountants and actuaries highly in terms of work stress, hours on the job, job security, and work-life balance. Most accountants and actuaries start out as entry-level employees at accounting firms or insurance companies, where they work while preparing for the litany of exams that will move their careers farther along.

What Is an Actuary?

Other meetings deal with Medicare and Medicaid issues such as rate development, financial reporting, or encounter data. He has been working with individual, group, and government health insurance programs for 20 years and is an expert in many areas, including Medicare, Medicaid, and consumer-directed health products. He is a fellow of the Society of Actuaries and a member of the American Academy of Actuaries. A mathematician who uses statistics to calculate insurance premiums. While the workplace is primarily indoors and office-based, actuaries may occasionally attend meetings with clients, regulators, or attend industry conferences and seminars to stay updated on the latest developments in their field. The work environment for actuaries tends to be intellectually stimulating, requiring a strong focus on analytical thinking, problem-solving, and attention to detail.

Historically, actuarial science used deterministic models in the construction of tables and premiums. In the last 30 years, science has undergone revolutionary changes due to the proliferation of high-speed computers and the union of stochastic actuarial models with modern financial theory. Actuarial science attempts to quantify the risk of an event occurring using probability analysis so that its financial impact can be determined. Actuarial science is typically used in the insurance industry by actuaries. Actuaries analyze mathematical models to predict or forecast the reasonableness of an event occurring so that an insurance company can allocate funds to pay out any claims that might result from the event. For example, studying the mortality rates of individuals of a certain age would help insurance companies understand the likelihood or timeframe of paying out a life insurance policy.

How Long Does It Take To Become an Actuary?

An actuary uses math and statistics to estimate the financial impact of uncertainty and help clients minimize risk. An actuary can assess and manage the risks of financial investments, insurance policies, and other potentially risky ventures. With a median salary of more than $100,000, the profession has a strong employment outlook and projected job growth, according to the U.S. We take a look at the typical workday of three actuaries who work for different types of companies and who are at different stages in their careers. By analyzing data and using mathematical and statistical models, actuaries can identify potential risks and assess the likelihood of future events.

Life insurance, pensions and healthcare

In the pension industry, actuarial science compares the costs of alternative strategies with regard to the design, funding, accounting, administration, and maintenance or redesign of pension plans. A pension plan is a defined-benefit plan, which is a type of retirement plan involving contributions from the employer to be set aside and paid out to the employees upon retirement. Such skills make them critical to the operations of insurance companies and lending institutions. Both base the rates for their services on an actuary’s analysis of the risks involved in the transaction. Her work varies considerably from day to day, depending on the projects she’s tackling.

Wherever there is risk-and a desire to manage it-there is opportunity for actuaries to apply analytical skills and business knowledge to solve problems. The median annual salary for an actuary in the United States in 2021 was about $105,900, according to the BLS. Actuaries are paid so well in part because few people have the patience or ability to spend five years or more passing all the exams. Ford says she spends an hour or two per day on administrative tasks such as scheduling meetings and responding to inquiries. As an actuarial student, she spends part of her day preparing for her actuarial exams, which she is halfway through. Actuaries often work closely with other professionals, such as underwriters, finance managers, risk analysts, and business executives.

Alex M. Tava, Managing Actuary, Cirdan

Actuaries are involved in diverse areas, including life insurance, health insurance, property and casualty insurance, and retirement planning. They employ complex mathematical models and actuarial techniques to develop financial forecasts, assess risk exposures, and provide strategic recommendations to mitigate potential losses. Their work is essential for ensuring that insurance companies can meet their financial obligations to policyholders and regulators while maintaining a profitable and sustainable operation. Actuaries are also valuable assets in non-insurance industries, where they contribute their skills to analyze financial risks, assess investment decisions, and design employee benefit plans. Actuarial science became a formal mathematical discipline in the late 17th century with the increased demand for long-term insurance coverage. Actuarial science spans several interrelated subjects, including mathematics, probability theory, statistics, finance, economics, and computer science.

Actuary ranked second in best business jobs and third in best jobs for STEM. According to the latest BLS wage data, the median annual wage for actuary meaning actuaries in 2021 was $113,990. Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia.

Lauren Ford, Actuarial Assistant, Allstate Insurance

AccountantAccountants are responsible for recording, organizing, and analyzing financial transactions for businesses and individuals. They prepare financial statements, such as balance sheets, income statements, and cash flow statements, to provide an overview of an organization’s financial performance. Accountants may also handle tasks like tax preparation, bookkeeping, budgeting, and financial reporting. They ensure compliance with accounting principles and regulations, helping businesses maintain accurate financial records and make informed financial decisions. Actuaries have a deep understanding of mathematics, statistics and business management.