90% of actuarial graduates work at insurance companies and consulting firms, enjoying generous compensation.
In 2015, the U.S. job search site CareerCast.com ranked actuary as the best job based on income, career outlook, work environment, stress, and physical demands.
So if you're interested in the actuarial field, you absolutely can't miss today's article—CheersYou（清柚教育） Bro gives you a full breakdown of "What is actuarial science?"!
Basic Introduction
Actuarial Science applies mathematical and statistical methods in the finance and insurance industries, primarily to assess long-term risks.
Actuarial science encompasses several related fields, especially probability theory and statistics from mathematics. Actuaries typically need to pass various professional credentialing exams, such as those offered by the Casualty Actuarial Society or the Society of Actuaries. By analyzing past and present data, actuaries predict future economic trends and help people manage their finances wisely.
The actuarial program at U.S. universities has become quite popular in recent years, but it remains a small and specialized field. Not many schools offer graduate actuarial programs—out of over 1,000 universities, only about a hundred offer undergraduate actuarial programs, around 27 offer master's programs, and fewer than 10 offer doctoral programs.
Related Branches
Because the core content of actuarial studies revolves around risk analysis and insurance, many universities don't call the major "Actuarial Science" but rather Risk Management and Insurance, Risk Analysis, Risk and Insurance, etc.
Related branches of actuarial science:
- Calculus I-IV
- Linear Algebra
- Macroeconomics
- Microeconomics
- Financial Accounting
- Insurance & Risk
- Actuarial Mathematics
- Probability & Statistics
- Theory of Interest
Application Requirements
Applicants to graduate actuarial programs need GRE or GMAT scores and a strong quantitative background. It's advisable to have taken relevant math courses such as business mathematics, calculus, and probability distribution. Additionally, some schools may require work experience in insurance, finance, investment, or related fields, or awards from mathematical modeling competitions.
If the applicant has experience in stock index futures simulation contests or backgrounds in actuary centers like the AIA Actuarial Center or Fudan AIA Actuarial Center, it can also help the application.
Required application materials:
- TOEFL/IELTS scores
- GMAT/GRE scores
- Resume
- 2-3 recommendation letters
- Personal statement, essays
- Transcripts
How to Become an Actuary?
① Have computational talent and excel in advanced mathematics, linear algebra, probability theory, mathematical statistics, etc. Consider majoring in mathematics for your undergraduate degree and obtaining the ASA (Associate of the Society of Actuaries), then pursue a graduate degree in actuarial science;
② Make good use of Excel and simple data tools like FoxBase, Access, FoxPro. Currently, mainstream actuarial modeling software internationally includes: SunGuard's Prophet, Towers Watson's MoSes, Milliman's MG-ALFA, GGY's AXIS;
③ Good English skills, because many models—such as pricing and reserve estimation—mostly use overseas teaching materials. Good English lets you understand and learn them;
④ Pass the North American SOA (Society of Actuaries, first stage: Associate ASA, second stage: Fellow FSA) or the domestic SAA, but SOA is generally more recognized than SAA.
⑤ The industry widely recognizes advanced degrees, so studying up to a master's or even a PhD is very helpful.
School Rankings
No.1 Columbia University
No.2 New York University
No.3 University of Rochester
No.4 University of Wisconsin–Madison
No.5 University of Illinois—Urbana-Champaign
No.6 Pennsylvania State University—Park
No.7 Boston University
No.8 Ohio State University—Columbus
No.9 Purdue University—West Lafayette
No.10 University of Connecticut
Program Recommendations
University of Wisconsin–Madison
Although its overall ranking isn't the highest, the school's actuarial program is first-rate and is one of the 24 universities worldwide with an outstanding actuarial program designated by the SOA. This year, over 50 actuarial companies came to campus for recruitment! The Actuarial Club (UW-Madison Actuarial Club), one of the largest clubs in the Wisconsin School of Business, provides an excellent platform for actuarial students both in the business school and the College of Letters & Science. For a $30 club fee, your actuarial exam fees can be reimbursed for the year (provided you pass the exam).
Ohio State University
Ohio State’s Master in Actuarial and Quantitative Risk Management is under the Department of Mathematics, a new master's program launched in 2016. The 2-year program requires applicants to have a bachelor's degree, a GPA of at least 3.0 (or 75 on a 100-point scale), and a background in mathematics, statistics, engineering, computer science, economics, finance, or other related fields (an actuarial science background is favored), along with basic programming skills.
GRE scores are required, and the GRE Subject Math test is not mandatory but strongly recommended; no specific score cutoff is set. Additionally, applicants are expected to have taken courses in: Multivariable Calculus, Theory of Interest, Probability, Micro- and Macroeconomics, and Intro to Computer Programming.
Tips: Unlike the other two programs in the Math Department—MMS and PhD—this program offers no Graduate Associateships to international students.
Michigan State University
TOEFL requirement: 79, IELTS requirement: 7, GPA requirement: 3. Founded in 1855, Michigan State University is the first land-grant university in the U.S. and a renowned public university. It offers over 200 academic programs, many ranking among the best nationwide. The student body exceeds 45,000, with over 500 student organizations and clubs.
As a historically prominent institution, MSU draws students from all 50 states and 125 countries. It has long placed high importance on attracting international students, making it one of the U.S. universities with the largest international student populations. Currently, there are about 700 Chinese students on campus.
Michigan State University was ranked among the Global 100 by Newsweek magazine, among the top 100 U.S. universities by U.S. News & World Report, and in 2006 was named one of the top 100 best value public universities by Kiplinger magazine.
Stony Brook University (SUNY)
Founded in 1957, The State University of New York at Stony Brook (SB) is part of the State University of New York system. The university excels in undergraduate education, with strengths in mathematics and engineering. It is designated as a top-tier research university by the Carnegie Foundation (fewer than 2% of U.S. universities receive this distinction) and is a member of the Association of American Universities along with Harvard, Yale, Stanford, and 63 others.
In recent decades, Stony Brook University has gained increasing recognition for its expansive campus and excellent faculty, establishing itself as a vital hub for academic research in the U.S.
Stony Brook University currently offers more than a hundred undergraduate and master's programs, as well as dozens of doctoral programs for students from across the U.S. and around the world.
Career Directions
Actuaries are core positions in insurance companies. Actuarial techniques are widely applied in annuity markets, life insurance operations, financial operations, and forecasting. Job responsibilities include but aren't limited to insurance product design, premium rate calculation, reserve and policy cash value calculation, and liability reserve accounting.
In the U.S., starting salaries for property & casualty actuarial graduates are around $60,000/year. Those with full actuarial credentials and years of experience can earn anywhere from $170,000 to $400,000 annually. So, the future is bright and the income is substantial.
Career directions:
First, traditional life insurance companies' actuarial departments;
Second, insurance companies and non-life insurance firms;
Third, certain positions in commercial banks, such as credit floating design for credit cards;
Fourth, HR consulting and actuarial consulting firms;
Fifth, research departments in investment banks.
The first is the traditional actuarial market demand, which is gradually becoming saturated and highly competitive. The latter sectors are still developing and will form a large market in the future.
Actuaries are professionals who manage financial risk; therefore, they mainly work in insurance companies. Recently, more and more actuaries have entered consulting firms, government agencies, commercial banks, and investment banks to engage in risk management.
Compensation:
Actuarial salaries are good. Generally, senior associates with 10 years of experience can earn over $150,000 per year, and those with 20 years of experience commonly earn over $500,000. Statistics show that among actuaries with 15-20 years of experience who become senior executives or CFOs, about 10% earn over $1 million annually.
Experienced practitioners can earn $150,000 to $250,000. Of course, income can vary greatly depending on years of experience, industry, region, and position.
Suitable Students
Application difficulty: Moderate
Program practicality: Very high; ideally, pass SOA actuarial exams before graduation.
The final stage of SOA allows you to choose your career direction.
A strong academic background in the field is required; undergraduate majors should preferably be mathematics or statistics. GPA should be at least 3.0, but if your overall profile is strong, the GPA and GRE requirements may be relaxed.
