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

Updated on March 12, 2015
Actuaries' Survival Guide: How to Succeed in One of the Most Desirable Professions
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.

Buy Actuaries' Survival Guide Online Here - How to Succeed in One of the Most Desirable Professions

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
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.

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    • profile image

      Bett 2 years ago

      i'm also interested.

    • profile image

      ontiretse 3 years ago

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

    • profile image

      VanDS 3 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.

    • profile image

      Baro 4 years ago

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

      in kenya

    • profile image

      kabo.m 4 years ago

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

    • profile image

      cornwell 4 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.

    • profile image

      ndivhadzo 4 years ago

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

    • profile image

      videlma 4 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

    • profile image

      hasan saeed 4 years ago

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

    • profile image

      Boitumelo Ntlhoro 5 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??

    • profile image

      Jeremy Adera 5 years ago

      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.

    • profile image

      Preller 5 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?

    • profile image

      Mary Wangare 5 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.

    • profile image

      Evens 5 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

    • profile image

      Lebo Maks 5 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.

    • profile image

      mbogawillis@yahoo.com 5 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

    • profile image

      Lee 5 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

    • profile image

      Hamza 5 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

    • profile image

      Daniel 5 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.

    • profile image

      vee 5 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

    • profile image

      nyasha 5 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???

    • profile image

      malvin nyahwai 5 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

    • profile image

      letsoara 5 years ago

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

    • profile image

      Acphe 5 years ago

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

    • profile image

      Ronald bargebo 5 years ago

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

    • profile image

      Kamogelo 5 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

    • profile image

      Chico Adams 5 years ago

      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.

    • profile image

      Manase 5 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

    • profile image

      aaaa 5 years ago

      deed

    • profile image

      Tryagain Mukanga 5 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.

    • profile image

      Noluthando 5 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

    • profile image

      Bman 5 years ago

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

    • profile image

      Saad Faizi 5 years ago

      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?

    • profile image

      Warren 5 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).

    • profile image

      abisary 5 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???

    • profile image

      Kholofelo 5 years ago

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

    • profile image

      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

    • profile image

      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..!!

    • profile image

      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)

    • profile image

      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?

    • profile image

      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

    • profile image

      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 :$

    • profile image

      Mbumbi Vutivi 6 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?

    • profile image

      Mnaro 6 years ago

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

    • AlabamaGirl86 profile image

      AlabamaGirl86 6 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..

    • profile image

      hi 6 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?

    • profile image

      patel 6 years ago

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

    • profile image

      TRux 6 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

    • profile image

      anita magodi 6 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.

    • profile image

      una 0529 6 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

    • profile image

      Jason 6 years ago

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

    • profile image

      Jason 6 years ago

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

    • profile image

      kopano 6 years ago

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

    • Hello, hello, profile image

      Hello, hello, 7 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.