I have recently been interested in finance. Through some research, I’ve become interested in risk management/actuary work but it seems to be more math than business. Is actuary work related to business at all? Because most people say to major in math or statistics to become one. I know there are exams to pass to become one too which are math heavy. My main question is is the actuary career path worth it? While many seem to only have a bachelors, the exams can take hundreds of hours each and a decade of your life to pass while you can only be an assistant until you pass enough exams. This path seems risky and honestly I don’t even know if this is considered to be in the business field. I have been looking into majoring in finance in college, and would consider double majoring with stats or math if it helps me be an actuary. The process to become an actuary has gotten me so confused. Is this purely all math or is there actual business in this?
It is heavily utilized in insurance (determining rates, etc.). I consider that business. Can’t speak to the value of the career, tests, etc. Are looking for business application outside of the insurance industry?
No question it’s business related, helping companies deal with risk, but the math is not to be taken lightly. The path to being an actuary is like nothing you can imagine.
@Chardo Yeah its crazy how much time it takes to get the highest level certification. I’ve heard people generally study 100 hours for every hour a test is. Now obviously this is a huge commitment, and I’m not sure how set I am on that. Would it be ok to try to double major math/finance or finance/math minor? I know actuary is heavy math but I don’t want to major in just math.
It is a business job, but one with extremely proscribed training and responsibilities. I don’t think it trains you to do much else in business – it is very specific.
While it’s true that it takes lots of studying and lots of exams to become a full fledged actuary, it’s not like they make minimum wage while they’re working on all of that.
I know some people who work at insurance companies, and according to them, the actuarial students are very well paid while they’re working on their exams and learning the business. Also, you don’t have to be an actuary to get a management position, but the actuarial students and actuaries tend to climb the ladder more quickly and be over-represented at the top of the organization.
I personally know actuaries who are working as bank auditor, Wall Street quant, big data analyst, management consultant, software developer, and CEO. There’s a whole world of “non-traditional” actuaries out there. Their analytical skills and business knowledge are highly desirable.
You will study several hundred hours for each exam. The first few exams are given twice a year, May and November. For 3-4 months prior, you will typically study several hours every Sat and Sun. Several weeks before the test, you will study full time all week instead of work. Pass or fail, you’ll take a little time off before you start all over again. The higher exams are given only once a year. Fail and you wait a year to retake. And make no mistake, you will fail some. The pass rate on these tests is well under 50%, no one completes them all without failing any. And these are some of the smartest people in the world, who never came close to failing a test in school.
You don’t have to major in math, but you do have to major in something math intensive. Most finance majors are probably a little light. Your school might have a quantitative finance or financial engineering major that might be better. Some econ programs (BS, not BA) can also work.
@Chardo Is it possible to double major in math+econ and take some finance classes on the side? Would that have me prepared for a career as an actuary while leaving finance jobs open? Is finance+math even possible at most universities or do you generally have to double major within a college right?
@WalknOnEggShells Do you have an idea of the salary for an assistant until they pass all of the exams and how much it increases per exam? I searched up actuarial assistant salaries but it varied from 60k to 90k which is a pretty big range. I thought 90k was what an actual actuary made.
A more unique opportunity I’ve looked into is Computer Science+Business at Lehigh which is one degree but you complete the core classes in both fields. I feel like thats a perfect combination of business and math, while also giving me another useful skill in software. I’ve heard being tech saavy is a plus for this career too. Would something similar be possible at other colleges?
Also, I wouldn’t mind leaving not majoring in finance if I could atleast take a few courses. Would I be at a disadvantage for business jobs if I major in econ/math at schools with a business school? I have looked into Penn which is a crazy reach but if I majored in econ/math there but decided on finance, would I have a hard time getting a job since I didn’t go to Wharton? I also don’t want to look like I’m trying to backdoor my way into Penn business.
Sorry, Penn was a bad example since they have a specific actuarial science concentration within Wharton. How about in general if a school has a business school but you major in math/econ?
@class0f2017, I don’t know off the top of my head, but I can ask. I would think that 90K would be the salary of someone with 3 - 5 years experience, and no people under them, in n high salary city, but that’s a total guess. I’ll see if I can find out.
I think in general, insurance companies have a reputation for being cheap with salaries, but actuaries seem to be the exception. The one guy who I know who is a manager and a full blown actuary at an insurance company, gave me some salaries once, and I was surprised how high they were.
These were for management level positions, though. I can’t remember what level of management we were talking about, but I remember him telling me that the woman he was thinking of promoting would go from a total compensation(salary plus bonus, plus stock options or deferred comp maybe) of around 150K to around 230K - something like that. I could be off a little on the numbers. And I’m almost positive she was still working on her exams, because she was pretty young, if I remember correctly.
But keep in mind, these could be super high pressure jobs, managing a bunch of people. That’s a real pain in the butt, if it’s not something you’re naturally drawn to.
These are probably typical numbers for management jobs anyway, but my point is that the actuaries at insurance companies seem to do much better than the other people.
I would try to focus on what you might want to do when you get out. I know it’s hard to figure out when you’re in college. Unless you know that you want to go into corporate finance or investments, I wouldn’t be so concerned with getting a Finance degree. It seems like you might think that you need some kind of business degree to get a job at a business, but all companies are businesses, and they all hire lots of people who don’t study business.
It really depends on what you want to do. I would focus on that. Do you like solving really hard problems? Do you like brain teasers? If you do, then Math or Computer Science might be a good fit. Can you see yourself working on analyzing data at a company, and looking for patterns in it? Does that sound like fun, or like torture?
Would you rather interact with people than solve problems on a computer? These are the types of questions I would think about. If you like problem solving and dealing with really difficult problems, I would take as much Math, Computer Science and Probability and Statistics as you can, and don’t worry so much about which major you choose. If that all sounds exhausting, then maybe consider Finance or Accounting, or something completely different.
Double major math/econ with some finance classes on the side might prepare you for actuary career or finance. I say that, cautioning that it’s a pretty difficult course load. People on these boards, especially unknowing teenagers, throw around these double major intentions like they’re a piece of cake. In reality, they’re usually ill-advised or unnecessary. In general, double majors should only be attempted when there is lots of overlap and few additional courses needed. Ideally, student should have lots of AP credits so it can be accomplished without overloaded schedules, still leaving room for enjoyable electives.
A major in math, with or without econ/finance/computer, will be desirable for any “finance” job. I use quotes, because finance is such a broad subject. The math/computer combo is highly desirable for actuarial or finance, and reasonably attainable thanks to good amount of overlap.
The term “actual actuary” doesn’t exist. There are three levels of actuary–Fellow, Associate, and “other” (for lack of a better term). Fellows have completed all the exams and other requirements. Associates have completed half the exams. There are many “Career Associates” working in the field who stop half way and never attain fellowship. They are still credentialed actuaries, can still sign documents, still highly paid. There are also some who quit after a few exams, never even become associates, but still do actuarial work. Obviously the further you go with exams, the higher the jobs available to you.
Entry level salaries are at least 60-80k depending on location. You will need to pass at least one or two exams on your own, and usually have internship experience, before you get one of those jobs. If you are an “actuarial student” in a formal “student program” at a company, you will earn bonuses and raises for each exam passed. You also get lots of paid study time, essentially days off for studying. Again, these tests are unbelievably difficult. Fail one more than once or twice, and you will usually fail off the student program. You’re basically fired. Obtain fellowship, either graduating the program or elsewhere, and you’ll be above six figures. There are no experienced fellows under six figures. Career associates are also earning six figures. That said, you can’t get in it for the money. They are all very highly paid, but the barrier to entry is insanely high. You need to be committed to a life of studying like you’ve never studied before, and of working with higher math on a day to day basis. I suggest checking out beanactuary dot org and soa dot org to get a feel for what’s involved and if it’s for you.
@Chardo, are most of the jobs in the Midwest and Northeast? How about Texas?
Jobs are all over the country, everywhere insurance and bank headquarters are located. Texas has quite a few home offices.
Thank you @Chardo