Studying Actuarial Science: Degrees and Training at a Glance
Actuaries estimate financial consequences of risk, using math, applied statistics and financial theory to determine probabilities of accidents, sickness and loss of property from theft or natural disasters. They are employed by insurance companies, financial services firms, employee benefit departments and consulting organizations. The U.S. Bureau of Labor Statistics (BLS) projected a 27% growth in actuarial opportunities from 2010-2020, compared to 14% growth in jobs overall.
Income growth and professional progression may require passing subject area examinations of the Society of Actuaries (SOA) or the Casualty Actuarial Society (CAS). CAS addresses property and casualty losses and SOA covers life insurance, health and financial management. You might get an intermediate actuarial position by passing at least one examination and earning a master's degree. With experience and Associate or Fellow status with these organizations, you could have higher-level specialist or consulting opportunities. Ph.D. holders could work as consultants, college teachers and researchers in actuarial science, math, operations research or applied statistics.
| Master's | Ph.D. | |
|---|---|---|
| Who is this degree for? | Individuals who want an entry-level to intermediate position in an actuarial science field | Individuals interested in research, postsecondary teaching or management of research functions |
| Common Career Paths (with approximate salary) | - Actuary ($70,000 - with 2-4 years of experience)* - Actuarial specialist, SOA or CAS Associate ($122,000 - advanced experience may be required for this salary)* - Actuarial services director ($180,000 - advanced experience may be required for this salary)* | - Professor of quantitative methods, operations research or statistics ($137,000)** - Actuarial consultant, SOA or CAS Fellow ($149,000 - advanced experience may be required for this salary - Actuarial executive ($267,000 - advanced experience may be required for this salary)* |
| Time to Completion | 1-2 years, full-time | 4-7 years, full-time |
| Common Graduation Requirements | - Typically 35-45 credits - Internship - Thesis or project | - Approximately 70-80 credits - Internship or experiential consulting project - Teaching responsibilities - Production of academic papers - Dissertation |
| Prerequisites | Bachelor's degree, quantitative discipline preferred with coursework in calculus, economics, accounting | Bachelor's degree, preferably in a quantitative discipline |
| Online Availability | Online coursework may be available; some online MBA and master's programs could include courses addressing actuarial science topics | Fully online programs may be rare to non-existent; courses may be available |
Source: *Salary.com (2012 median figures), **The Association to Advance Collegiate Schools of Business (2010 mean figures).
Master's Degree in Actuarial Science
You may study actuarial science in a dedicated program or as a concentration within a math or MBA degree program. Master's study in actuarial science might also be offered through a math department, a business school or a risk management or insurance department. Programs may have requirements outside of a typical graduate actuarial curriculum. For example, an MBA program with a concentration in actuarial science may require meeting MBA admission requirements and completing standard foundations courses in business disciplines along with mathematical statistics specific to actuarial science. You'll typically develop quantitative skills to model financial impacts of risk factors and to design solutions to manage them.
A master's candidate in actuarial science can expect 4-6 semesters of full-time study. Programs may require a summer internship, a thesis or other culminating project. You may have some elective options that permit you to specialize. Your school may offer dual degree options that will allow you to also graduate with risk-management credentials.
Pros and Cons
Pros
- Opportunity to enter a well-paid, stable field with multiple career tracks and income growth with experience and professional certifications
- Schools may offer courses aligned with SOA and CAS examination topics so you'll have a chance to pass one or more exams before you graduate
- Electives may permit development of a specialization
- Flexible career options
Cons
- Career requires substantial commitment to ongoing learning
- Intense study may be required for examinations
- Jobs may be more available in geographic areas with substantial financial service organization activity
- Depending on your academic background, you may be required to complete foundational quantitative or business subject courses before beginning the master's program
Courses and Requirements
For this field, you'll study mathematical modeling, valuation of financial assets and applied statistics. Schools may encourage you to pass one or more SOA or CAS examinations during your studies. Some programs may require a thesis or a real-life capstone project. You might take courses like these:
- Life contingencies
- Loss distribution and credibility theory
- Principles of property and casualty ratemaking
- Quantitative financial risk models
- Valuation of financial assets
- Applied statistics and econometrics
- Advanced survival models
Online Courses
Actuarial science degree candidates should probably expect to complete their degrees on campus, since necessary courses may not available online. Depending on your school, some courses may be available online, or you may be able to complete some online courses at another school for transfer credit. You may be able to take courses as an independent enrollee or your company may provide various forms of on-the-job training. SOA and CAS offer online educational opportunities ranging from webinars and courses eligible for continuing education units to self-study products.
Getting Ahead with This Degree
Schools designated as Centers of Actuarial Excellence by SOA often encourage or require students to take one or more SOA or CAS exams before they graduate. CAS encourages students to contribute services to the field through volunteerism. You may land an internship that leads to a full-time position. Some schools have chapters of Gamma Iota Sigma, the actuarial science fraternity. Related research centers may provide opportunities to work on real-world consulting problems posed by financial services companies.
Ph.D. Covering Actuarial Science
Ph.D. programs specifically in actuarial science may be somewhat less common than those in risk management and insurance, which incorporate actuarial science topics. Risk management programs require study of economics, finance, statistics and applied math to analyze risks of alternate management decisions. If you're pursuing a Ph.D. in actuarial science or closely-related disciplines, you're likely headed for a research and teaching career, advanced consulting opportunities or senior management of a research-oriented actuarial or risk management function in an organization.
You may apply for a Ph.D. program in math, actuarial science or risk management with an appropriate bachelor's or master's degree. If you enter with a master's degree, you'll probably complete 20-30 additional credits. Exact requirements may be modified, depending on your background. Prerequisites might include courses in linear algebra, mathematical statistics or undergraduate calculus.
Pros and Cons
Pros
- Programs can lead to high-security, lucrative careers
- Can be a great fit for students with high-level math and analytical aptitudes
- The Association to Advance Collegiate Schools of Business projects shortages of professors in business schools due to retirements and increased enrollment worldwide *
- Career based on objective criteria like experience, knowledge and passage of actuarial association examinations may be less subject to organizational politics
Cons
- May not be the career for those who prefer high social contact environments; career extended periods of working alone with a computer
- Requires lifelong commitment to continuing education
- Field requires extremely high levels of thoroughness and accuracy
Source: *The Association to Advance Collegiate Schools of Business
Courses and Requirements
For this degree program, you'll need a broad math background and aptitude for math research. Students should expect a highly quantitative course sequence. Schools may also have second language requirements. Like other doctoral candidates, you'll need to maintain a high GPA and pass preliminary and oral examinations prior to defending your dissertation.
Candidates will typically take courses outside their department, often in economics and finance. Your school may expect you to pass SOA or CAS exams and produce publishable papers. You may also be expected to teach and contribute to research initiatives and the publication of research findings.
These courses may be typical:
- Seminar in actuarial science, risk management and insurance
- Insurance theory
- Macro and microeconomics
- Advanced financial econometrics
- Computational risk methods
- Advanced stochastic process
- Asset pricing
Online Courses
Students should probably not expect that advanced courses will be available online, though individual courses may be available. If they are, they may not be offered every semester. If you want to pursue a specific research topic, you may be able to work with a professor on an independent study that you could pursue online. Supplemental courses and workshops may be offered by professional associations, but your school may not accept these for credit.
Stand Out with This Degree
Recommendations for master's candidates, like passing SOA and CAS examinations, may also apply to Ph.D. students. Potential employers may be looking for contributions to published research, conference presentations and teaching ability. Your school and organizations like SOA may offer awards, research grants and scholarships.
You could get points for service to the field through volunteerism. You might contribute to background work for textbooks through The Actuarial Foundation sponsored by SOA or by winning a prize or individual research grant. The Actuarial Foundation supports initiatives for consumer education math education in grades 4-12 that may welcome voluntary participation by advanced students.
