Career Education - Learn about all careers, career pay salary, job outlook

What Actuaries Do

Actuaries analyze the financial costs of risk and uncertainty. They use mathematics, statistics, and financial theory to assess the risk that an event will occur and help businesses and clients develop policies that minimize the cost of that risk. Actuaries' work is essential to the insurance industry.


Actuaries typically do the following:

Most actuarial work is done with computers. Actuaries use database software to compile information. They use advanced statistics and modeling software to forecast the cost and probability of an event.

Actuaries typically work on teams that often include managers and professionals in other fields, such as accounting, underwriting, and finance. For example, some actuaries work with accountants and financial analysts to set the price for security offerings or with market research analysts to forecast demand for new products.

With experience, actuaries are often given supervisory roles. They are responsible for delegating tasks and providing advice to senior management. They also may be called on to testify before public agencies on proposed laws that affect their business, such as a law placing caps on auto insurance prices by states.

Most actuaries work at insurance companies, where they help design policies and determine the premiums that should be charged for each policy. They must ensure that the premiums are profitable, yet competitive with other insurance companies. Actuaries in the insurance industry typically specialize in a specific field of insurance, such as one of the following:

Some actuaries apply their expertise to financial matters outside of insurance. For example, they develop investment strategies that manage risks and maximize returns for companies or individuals. Some actuaries help companies develop broad policies and strategies that assess risks across all areas of business, a practice known as enterprise risk management.

Pension and retirement benefits actuaries design, test, and evaluate company pension plans to determine if the expected funds available in the future will be enough to ensure payment of future benefits. They must report the results of their evaluations to the federal government. Pension actuaries also help businesses develop other types of retirement plans, such as 401Ks, and healthcare plans for retirees. In addition, they provide retirement planning advice to individuals.

Consulting actuaries provide advice to clients on a contract basis. Many consulting actuaries audit the work of internal actuaries at insurance companies or handle actuarial duties for insurance companies that are not large enough to keep their own actuaries on staff. Other consulting actuaries work for employee benefits firms. These firms design, analyze, and manage employee benefit programs such as employer-sponsored healthcare and retirement plans for companies.

Some people with an actuarial science background may become professors and teachers. For more information, see the profile on postsecondary teachers.

Source: Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, 2012-13 Edition