# Why Study Actuarial Science - Actuarial Subjects - Career in Actuarial Science - and Actuaries Jobs

Actuaries' Survival Guide: How to Succeed in One of the Most Desirable Professions

## What is an Actuary?

What is an Actuary? An actuary is a person who is an expert in the science of mathematics, probability, statistics, economics, and finance. An actuary is the person who work out how much a business company should charge its clients for making promise to pay them a certain amount in future if certain conditions happen. A good example is insurance companies which will ask you to pay now a certain amount of money with a promise they will pay you a certain amount of money should you get a serious accident in the future.

## Compound Interests

The Mathematics in actuarial science starts with the basic of working with compound interests. Compound interest comes in place when you invest a certain principal of money at a certain interest rate and you want the interest to be reinvested every year back into your original principal. An example: if you invest \$50,000 at a compound interest rate of 10% per year, your money will have earned \$5,000 in the first year. Add that interest to the original principal and your new principal for the second year will become \$55,000 which will earn an interest of \$5,500. At the beginning of the third year, your principal will be \$60,500 which will go on to earn you an interest of \$6,050 at the end of that year. If you want to find how much money you will have earned at the end of twenty years, then there is a formula for calculating compound interest.

## Formula for Calculating Compound Interest

This is the formula: FP = OP( 1 + i )ªۙ

Where FP is the final principal including interest earned

OP is the original principal

“i” is the interest rate

“a” is the number of years your money is invested.

## \$50,000 into \$336,375.00 in 20 Years

If you input the \$50,000 original principal invested at an interest rate of 10% for 20 years in the compound interest formula above, you will get a final principal of \$336,375.00. You can now see what insurance companies do with your money so that they can afford to pay good salaries to actuarial scientists.

## Risks Variables in the Equation

That compound interest formula can become very complex when you start adding other variables in the equation. For example: an insurance company will want to know the risks they stand if they pay their clients full amounts in the event of a client dying before the full period of investment has matured. People will always die but those who are older have higher probability of dying than those who are young. Thus an actuary has a job to do in determining how much money the insurance company should charge different clients for making promise to pay them certain amounts of money in future if certain conditions happen.

Risks Variables in the Equation - Equations becomes very complex when you start adding variables like risks. Image credit: Wikipedia

## Retrospective Reinsurance

It is that variable element of predicting the unknown future that makes a course in actuarial science very rich in mathematics. However, it’s not always that an actuary has to forecast future events but his work may just be determining the cost of financial liabilities that have already occurred. These financial liabilities are called retrospective reinsurance. Often, an actuary will find him/herself working on what has happened to develop new re-pricing of the products and services the company already has.

## Pension Fund Management

Having looked at the example above with the associated 101 variables, you will agree that an actuary can be regarded as a highly trained statistician whose job is mainly in evaluating risks in companies in the field of insurance, banking, and any other institutions that has a need to design and mitigate risks. An actuary scientist also is in great demand in pension fund management where their main job there is in predicting future payouts as well as determining current contributions.

## Career in Actuarial Science

If you would want to start a career in actuarial science, you will need to pass well in mathematics so that you can join a university where you will do a bachelors degree in actuarial science. Whilst at the university, you will study the following subjects that will lead you in acquiring a degree in actuarial science:

## Actuarial Subjects at University

1. Actuarial Mathematics

2. Actuarial Mathematics - Life

3. Actuarial Methods in Finance

4. Actuarial Theory of Pension Funds

5. Analysis of Variance

6. Applied statistics

7. Computational Methods and

8. Data Analysis

9. Economics

10. Elements of Accounting and Finance

11. Elements of Linear Algebra

12. Financial Actuarial Investigations

13. Information systems

14. Law in society

15. Life Contingencies

16. Mathematical Methods

17. Mathematics of Demography and Graduation

18. Methods in Calculus

19. Ordinary Differential Equations

20. Partial differential equations

21. Principles of Financial Management

22. Probability Modeling

23. Probability, Distribution Theory and Inference

24. Programming Methodology

25. Psychology

26. Regression analysis

27. Risk Mathematics

28. Sociology

29. Statistical Theory

30. Stochastic Processes

31. Survival Methods

32. Time Series analysis and Forecasting

## Salaries for Actuaries

A day will come when you will pass you university examinations and graduate in Bachelor of Science in actuarial science. You will then proceed and look for a job. Chances are as high as 65% that the job you will get will be in an insurance company. On average, a newly employed graduate from university in actuary science may earn about \$50,000 to \$60,000 per year. There are certifications needed once you start working which lead to series of exams – as many as nine different exams.

Whenever you pass an exam, your salary is adjusted accordingly by your employer. If you are an actuary in life insurance, retirement plans and investments, you will have to deal with the Society of Actuaries (SOA), and those in insurance dealing with property, casualty and liability, you will have to be certified by the Casualty Actuarial Society (CAS. To reach the highest level of certification may be a lengthy process that may take a minimum of six years but upon reaching there, then you will be a top decision maker in your organization and in most cases your final decision is what the company has to follow. At this stage you should expect to earn in the range of \$120,000 to 150,000 per year.

## The Future for Actuaries’ Jobs

As things stand now, career in actuarial science is very promising throughout the world. The salaries for actuaries are among the highest of all professions. On the other hand, the demand is currently very high. Like any other market, whenever the demand is high, the price is high, but at the same time, the supply is currently adjusting itself to take on the demand and sooner the equilibrium will be established. The demand for actuaries will not last forever especially with the development of superior computer’s softwares. You just need to look at the historical demands for accountants, doctors, computer scientists, nurses and extrapolate to what we have today and then get a factor and apply that factor to predict what the future careers of actuary scientists may look like.

## Buy Yourself a Book on Actuarial Science at Amazon

If you would be interested in studying actuarial science, then there are good books on actuarial science at the trusted Amazon store. By comparing prices at the listing shown below, you should be able to get yourself a book to lead on actuarial science

## More by this Author

Hello, hello, 6 years ago from London, UK

That was an eye-opener about a field I have never heard off. Thank you for such a comprehensive hub.

kopano 5 years ago

i would like to study acturial science but i don't know at which university please help.i live in south africa

Jason 5 years ago

@Kopano, you can study Acturial Science at Wits University,University of Pretoria and also University of Cape Town.

Jason 5 years ago

@Kopano, you can study Acturial Science at Wits University,University of Pretoria and also University of Cape Town.

una 0529 5 years ago

hi i really want to do actuarial science. but i'm not sure with university choosing. i'm in uk . could you please give me some suggestions

anita magodi 5 years ago

my daughter wants to study acturial science ta wits or uct.we googled about wits and entry requirement is NSC. what is NSC.We are in Botswana.

TRux 5 years ago

Hi, I am contacting you from Romania. I want to study actuarial science but I'm not sure what is my best option regarding the best University. Currently there is a master in Bucharest on actuarial science at the Academy of Economic Studies but I didn't receive a good feedback. So I have heard of a british university in Salonic and an american university in Bulgaria but I'm not sure if they are ok. Can you please enlighten me regading these universities or other similar in this area?

Thanks

patel 5 years ago

is acturial science in demand? and will it be in demand in the next 10 years?

hi 5 years ago

i'm in malaysia. i thought of studying actuarial science as i'm interested in maths. what other subjects are important to study actuarial science and which is the best university in uk to study actuarial science?

AlabamaGirl86 5 years ago

Interesting stuff, I studied this in college, after looking at your tables, I realized I do not miss it all. But you have written an awesome hub..

Mnaro 5 years ago

hi, am a kenyan taking a degree in Actuaria science in Kisii University College. Your article is so encouraging. Thanks

Mbumbi Vutivi 5 years ago

Well,its impressive.,i'm realy interested in being an actuary..still in grade11 bt coming soom...watch me!...anyway hw many years wil i do da bachelor'sdegree?

Kheshav 5 years ago

I will be doing actuarial science either in WITS university or university of Pretoria. Which is best and which offers most exemptions. Ty :\$

Nokuthula 5 years ago

Hi my name is Nokuthula i`m interested in doing actuary science and i know its requirement for University entry but the problem is i live in Soweto and my University choice is University Of Cape Town

evodia 5 years ago

hi my name is evodia. i'm interested to study proffessionals exams inorder to become an actuary,i have a bachelor of business administration (accounting) and currently i am taking a masters of international business..I have always wanted to study acturial but the course isn't available in all the universities in my country so i wish to study it in south africa but its too expensive to study it so i wish i could get a scholarship so what do i do?

kevin 5 years ago

This what i need and i have gotten it...this article its so encouraging,i was thinking where am i going to fall with my mathematical subject.Thanks to God i have found it...just looking forward to join you GUYZ in this field of Actuary.(Kenyan)

Tebo 5 years ago

Hi im a Motswana man (23 yrs), having a strong desire to be an Actuary, I have Bachelors degree in Economics and Statistics..Where can i Secure a Schoolarship to study Actural Science..Please help..!!

Niaz Hussain Ghumro 5 years ago

Hi I am niaz Hussain ghumro Iam bachlor in statistics , master in mathematics and master in economics and finance. Where i can get scholarship for phd in actuarial science. I am lecturer in mathematics and statistics at sukkur institute of business administration sukkur pakistan. my mailing adreaa is niaz_ghumro@iba-suk.edu.pk

Kholofelo 4 years ago

Which university in south africa...has a greater number of actuarial graduates

abisary 4 years ago

halo the article is very encouraging!i would like to study actuarial science in united kingdom,bt am not sure which is the best university i can go to...help???

Warren 4 years ago

Look guys, if you are still in school and in South Africa and are considering Actuarial, then I recommend doing some maths to see what part of the subject is like. I recommend Stewert: Calculus Concepts and Contexts, Anton: Linear Algebra with Applications and Elementary Differential Equations and Boundary value problems by Boyce. Those textbooks teach more that I learnt at UCT (except Stewert as that is the prescribed text). Also, if you have friends at UCT, try getting the notes for STA2004F and see if you can understand them. The board exams are what counts in the end. Try buying CT1 - Financial Mathematics from ACTed and learn it to see if you have the potential (basic integration required).

I am an olevel student. I don't have computer studies as my subject. Is it a problem, if i want to be an actuary?

Bman 4 years ago

AC Sc, i think its a heavy study with relations to almost all mathematics(ie. stats,economics,etc.)

Noluthando 4 years ago

Love this article, its so relevant and encouraging. Im currently in matric and also interested in doing the course bt im nt sure what marks should i obtain in Maths to be accepted in universities. I also do maths P3 is it useful? Plz help

Tryagain Mukanga 4 years ago

Actuarial Science is a profession. I am currently studying it in Botswana. Whoever wants advice on how to start and what it takes is free to call me on 00267 7173 9294. On attainment you are assured of very high income and recognition. That's what inspires me.

aaaa 4 years ago

deed

Manase 4 years ago

Im manase kiptoo (kenyan) l lv to share with u guys.i like mathematics with passion now i hv got the right way to go.thanks

Am 2 join university to study actuarial an i don knw which univsty is the best in kenya...AM realy encouraged by the article and i can see light at the end of the tunnel.

Kamogelo 4 years ago

I am doing my third year completing my bsc in applied mathematics, so is possible for me to do honours in actuarial science? I want to be an actuarist

Ronald bargebo 4 years ago

I have loved this i am starting on acturial science at JOMO KENYATTA UNIVERSITY IN KENYA

Acphe 4 years ago

I am interested in actuarial science but da problem is i dnt do commercial subjects so what cn i do help plz

letsoara 4 years ago

i realy want to study actuarial science.but the problem is,i don't study commens.what can i do?

malvin nyahwai 4 years ago

i'm currently doing my a level sciences and i need to know if i'm making the right choice to be an actuary infact is there a better science degree than an actuary, help ! malvinnyahwai@gmail.com

nyasha 4 years ago

im doin maths,economics,accounts and business studies at A level in zimbabwe......what are my chances of doing actuarial science without further maths???

vee 4 years ago

I am currently a maths teacher teaching grade 12 in South Afrca and i am getting bored with this department actualy i don't see myself teaching in 10 years time but m so much inlove with maths and i want to do Actuarial science and again i see its kind of impossible to do it part time that makes me wonder will i not be making a mistake if i quit my Job and study full time? I am in my late 20s

Daniel 4 years ago

am a 3rd year Actuarial Science student in Kenya, what i would like to add is that this is a hard course and so far i cant wait to get done with my final year, graduate and take a moment to just take a breath. As for the professional CT exams am not looking forward to them i might just do a couple of them and see how life pans.

Hamza 4 years ago

Hey! I am an O'level student and have studied sciences and maths. Should I study computer studies to become an Actuary? PLEASE HELP ME!!! :D

Lee 4 years ago

I hve an A of maths bt d of english i dnt if the universty wil accept me,wil they?help i wnt 2 do acturail science elekanyaniliphadzi@gmail.com

mbogawillis@yahoo.com 4 years ago

Hi i am a second year student in kimathi university college in kenya pursuing bachelor of science in actuarial science and i like your article as it is encouraging .I really want to become an actuary please advise me on what to do so as to be one.after my degree i will choose to do the professional papers also advice me between the U.S.A and the U.K PAPERS which are the best among the two please help am confused.mbogawillis@yahoo.com

Lebo Maks 4 years ago

I'm really grateful for this hub as I had an interest in actuarial science but was not sure of what is required.I love chalanges and I'm up for it.

Evens 4 years ago

Hi,im willing to study at any varsity but de problem is my maths n science,i got level 3 in both subjects during my matric year,i really love to study clinical engineering n they require level 4 for both subjects for admission

Mary Wangare 4 years ago

Hi,am a student at Mama ngina girls High school and i would love to pursue actural science after school,can you kindly send for me the subjects required and their respective grades.

Preller 4 years ago

I would like to study actuarial science at Wits University, and i know i would have to get an exemption from the SA matriculation board. Can anyone advise me on how many A levels i would need to get that exemption?

I fail to understand why ASSA(Actuarial Society of South Africa) doesn't have an exam center in KENYA. I am interested with their exams.

Boitumelo Ntlhoro 4 years ago

Hello, I'm in grade 9 and I want to do actuarial science at a university when I finish high school. What subjects do I need choose now in

high school??

hasan saeed 4 years ago

it is agreat department i like actuatial science and it comes from my love ti math thnks a lot

videlma 3 years ago

am a student in form four and wana da course u a article is encouraging and am in kenya inspired by our princpal daughter who is now a third year

im gng 2 study actuarial science at wits but i dnt knw wich books 2 buy...plz help

cornwell 3 years ago

guys I'm so confused... I surely need your help . I want to be an actuary and on the other side I want to be a chattered accountant.

kabo.m 3 years ago

Im in botswana nd wish to be an actuary but i can't find a scholarship

Baro 3 years ago

Hi I would love to studl y actuaral science buh I don't which university am

in kenya

VanDS 2 years ago

Firstly, language skills are of utmost importance as the examination questions can be quite complicated. I would suggest that all of your results be of a high standing as the field requires a superior intellectual ability. Don't let this discourage you, however, from improving before the time to apply to your respective universities.

ontiretse 2 years ago

What kind of job do u do and what's interesting you to become an actuarial science

Bett 21 months ago

i'm also interested.