Actuarial Science Degree – Guide to Choosing a Program
By Kat Campise, Data Scientist, Ph.D. If you like math, statistics, and finance as they apply to risk management, then earning an actuarial science degree may be the ideal academic program for you. Per the Bureau of Labor and Statistics, the job outlook for actuaries is fantastic: projected growth is at 22% through the year 2026 (much faster than the average of all occupations). Additionally, actuaries can earn a solid six-figure salary, which, as of 2018, is reported to be an annual median of $102,880. However, there are a few more details about the actuarial science realm that you should consider before you traverse this arduous career path.
What is actuarial science?
Actuaries calculate the probability of certain events occurring. The corollary to this is that actuaries also quantify ways in which certain decisions or actions can decrease the likelihood of an unwanted event. Fundamentally, the daily work of an actuary focuses on risk management. Risk assessment is needed in all industries. When new products or services are created, there is a multitude of knowns and unknowns. What’s the likelihood of injury should someone misuse the product? What’s the likelihood of someone misusing the product? What are the relevant actions we can take to avoiding, mitigating, accepting, transferring or exploiting (meaning you’re leveraging the risk) that risk, and what are the likely outcomes of each of these actions? Advanced statistical analysis establishes a quantified answer for optimizing decision making. While it’s impossible to have perfect information regarding every possible factor that contributes to an event or a series of events (daily weather predictions are a prime example of imperfect approximation for predictive purposes), the axioms of probability and mathematical modeling are reliable constructs for risk analysis. Most actuaries work for insurance companies, private corporations, or in government positions. The entire insurance industry is built upon the work of actuaries. Health insurers, car insurers, life insurers, etc. all rely on the intricate quantitative and qualitative analysis of their actuaries.
Actuarial Science vs. Data Science
Actuarial science and data science have several overlapping skills: math, statistics, and industry knowledge. One key differentiator is the expected level of programming competency. Data scientists are much more likely to use Python or R to construct their statistical and mathematical models, which are then deployed into a larger digital production environment. In the past, this hasn’t been the case for actuaries, but that is changing. The insurance industry, for example, bears the responsibility of meeting Federal and state regulatory requirements. Their actions are heavily scrutinized, right down to the mathematical models they use for risk calculations. Thus, for the time being, actuaries don’t have the same relative freedom in terms of research and development (a crucial part of data science). They cannot simply build and test a model. Governance and auditing are required for every step in a data science cycle. Furthermore, data scientists tend to deal with larger volumes of structured and unstructured data (big data) from internal and external resources. Data scientists aren’t just focused on risk management. While they can construct the same statistical models as applicable to risk management, data scientists have a broader scope in terms of statistical model selection, testing, and the purpose of their work. So, there are some gaps between actuarial science and data science, but they are primarily predicated on the purpose of their job function rather than a huge knowledge disparity.
Actuarial Science Jobs
Actuarial jobs usually begin with attaining an internship; this is a vital step as most companies will want you to have at least one year of experience before you’ll be considered a viable candidate for full-time employment. After you pass a requisite number and type of actuarial exams (more on this below), you can then move into an entry-level actuarial position, where you’ll be working under seasoned actuaries. On any given day, depending on the company you work for, you may be conducting a reserve or pricing analysis (likely using Excel), collecting and verifying the data needed for a particular project, and the usual administrative tasks that everyone needs to do, e.g., answering emails, attending meetings, etc. Unless you’re a consultant, it’s unlikely that you’ll do much traveling, and you’ll spend your time within the traditional corporate office, 8 hours per day.
Actuarial Science Major
To be clear, you do not need to major in actuarial science in order to be an actuary. Earning a degree in math, finance, or statistics are alternatives to completing an actuarial science degree. In fact, some actuaries will recommend that you don’t major in actuarial science as it can lock you into that career path; whereas math, finance, or statistics will give you more career pivoting ability. With that stated, the typical courses you’ll find within a Bachelor’s Degree in Actuarial Science are Intro to Actuarial Science, Statistical Theory, Calculus (I, II, and III), Foundations of Accounting, Microeconomics, Macroeconomics, Life Contingencies, Loss Models, and Actuarial Science Practicum. Though the math and stats courses are relatively standard throughout all undergraduate actuarial programs, each university or college will have their own required curriculum with regard to the required actuarial courses.
Actuarial Science Master’s
Just about all universities house their actuarial science degrees within the mathematics department. So, essentially, when you earn a Master’s Degree in Actuarial Science, you’re completing a highly specialized math degree. The main benefit of earning an actuarial science master’s degree is that it can help prepare you for the imposing actuarial exams that you will need to complete to officiate your status as an actuary. But, the master’s degree is not a necessity. On average, a Master’s Degree in Actuarial science will take you two to three years, and the curriculum is comprised of advanced courses in Financial Theory, Probability Theory, Statistical Inference, Actuarial Methods, Actuarial Models, and Predictive Modeling in Finance and Insurance. Some schools offer more specific coursework in predictive modeling for life and health insurance along with data science.
Actuarial Science PhD
Earning a Ph.D. is a whole other level of analytical acumen and focused research. The end result, other than having a Ph.D., will be an extension of the discipline through an extensive exegesis on a highly specific research area. If you peruse through one of the actuarial science journals, you’ll gain a solid idea of what is expected throughout your Ph.D. studies. Add to this that you’ll be doing a deep oceanic dive into math and statistics, relevant to actuarial science, and it may become even more evident that you’ll pretty much finish a Ph.D. in Mathematics (for actuarial science) after four to seven years of formidable mental labor. Programs will differ as every university has comprised their own curriculum, but you can expect to complete courses similar to Applied Stochastic Processes, Mathematical Statistics, Life Insurance Mathematics, Actuarial Risk Management, and Data Science for Actuaries. Certainly, the courses may have names similar to those within the master’s in actuarial science. But, you’ll be pushing down into the theoretical constructs and then reconstructing your own verifiable and rigorously analyzed theories based on those constructs. As such, before you launch yourself into the frequently torrential waters of a Ph.D. program, you should consider the time and financial commitment carefully.
Actuarial Science Degrees Online
The convenience of online degree programs is undeniable. No need to battle with traffic (or public transport), no need for trying to find a place to park, or spend money on gas (or, again, the cost of public transport); and you can complete the work on your own time schedule while also meeting the requisite coursework deadlines. Online actuarial science degrees aren’t well represented amongst the available online programs. Lock Haven University, located in Pennsylvania, does offer a fully online Professional Science Master’s in Actuarial Science (one of very few that we found). Their program helps prepare you for the three of the Society of Actuaries exams, and you’ll fulfill two of the Validation by Educational Experience (VEE) requirements for the Casualty Actuarial Society. The one downside of online actuarial science degrees is the lack of availability. You’ll find far more on-campus programs at all academic levels. However, if you prefer to undertake a degree in finance or business (applicable alternatives for actuarial science), then you’ll have a wider selection of online programs to choose from.
Actuarial Science Exam
At first sight, the number and types of actuarial exams are daunting. In the U.S., two organizations reign supreme for substantiating your qualifications as an actuary: The Society of Actuaries (SOA) and the Casualty Actuarial Society (CAS). SOA has three credentialing levels: Associate, Chartered, and Fellow. Also keep in mind that the SOA exams are for actuaries within the life insurance, health insurance, and pension sectors. Many employers will require that you pass at least two of the SOA exams, but ultimately, to become an SOA Associate, you’ll need to successfully pass a total of seven exams. These are, by no means, easy exams. Expect to study at least 100 hours for every hour of the exam (e.g., if the exam is three hours, then there’s a high probability that you’ll invest 300 hours just for that one exam). CAS membership has two levels: Associate and Fellow. The exams are centered on the property and casualty sectors, and similar to the SOA, you must pass seven exams (along with several other educational requirements) to earn the Associate credential. The exams aren’t inexpensive. As of 2019, the first two SOA exams are $225 — this does not include your study materials — and the subsequent exam costs only increase rather than decrease. So, becoming an actuary isn’t as simple as earning an undergraduate degree; you must pass through several “gates” including formal education, internship, and a multitude of exams. But, with determination and self-discipline, you can build your actuarial career.
School Listings – Top Ranked Actuarial Programs
The following 17 schools have all attained the highest level of recognition the Society of Actuaries offers universities, the Center of Actuarial Excellence designation. These schools must maintain eight specific requirements related to degree, curriculum, graduate count, faculty composition, graduate quality, appropriate academic integration, connection to industry, and research/scholarship. Temple University – Philadelphia, Pennsylvania Actuarial Science Major Master of Science in Actuarial Science Ph.D. in Statistics – Concentration Actuarial Science Temple University’s Actuarial Science Bachelor’s, Master’s and PhD programs are all housed within the Department of Risk, Insurance, and Healthcare Management. The department features around 700 students and 21 full time faculty, which makes the RIHM department the largest of its kind. Temple’s PhD program is in Statistics with a concentration in Actuarial Science. University of Connecticut – Storrs, Connecticut Actuarial Science Major M.S. in Actuarial Science Ph.D. in Mathematics with Thesis in Actuarial Science Within the Department of Mathematics, UCONN’s Actuarial Science Major, Master’s and PhD programs produce graduates with a close relationship to top insurance companies and consulting firms in the Northeast. UCONN is one of a handful of schools in the Northeast that offers Actuarial Science programs. Students from Greater New England can attend for the in- state tuition rate. At UCONN, the PhD program consists of a doctorate in Mathematics with an Actuarial Science thesis. University of Illinois at Urbana-Champaign – Urbana, Illinois Bachelor of Science in Actuarial Science MS in Actuarial Science PhD in Mathematics — Concentration in Actuarial Science and Risk Analytics The University of Illinois offers award winning Bachelor’s, Master’s, and PhD programs within the Department of Mathematics. There is a heavy emphasis on experiential learning within these programs. In addition, the Master’s and PhD programs offer courses in Risk Analytics to broaden the experience of students within the program. The PhD program is in Mathematics, with a concentration in Actuarial Science and Risk Analytics. University of Iowa – Ames, Iowa BS Degree in Actuarial Science M.S. in Actuarial Science Ph.D. in Statistics – Concentration Actuarial Science The Actuarial Science Bachelor’s, Master’s, and PhD at the University of Iowa exists in the Department of Statistics and Actuarial Science with companion programs such as statistics and Data Science. The program is over 100 years old and has maintained its status as a certified Center of Actuarial Excellence (CAE) by the Society of Actuaries (SOA) since 2010. In addition to actuarial science courses, students may take courses dealing with the business side of the actuarial profession such as accounting, law, finance, insurance, and economics. The PhD program is in Statistics with a concentration in Actuarial Science. University of Wisconsin-Madison – Madison, Wisconsin Major in Actuarial Science MS in Actuarial Science PhD Program in Actuarial Science, Risk Management, and Insurance The University of Wisconsin-Madison offers a Bachelor’s, Master’s, and PhD within the Wisconsin School of Business. These programs are designed to push graduates into careers with insurance companies, actuarial consulting firms or government agencies. The PhD is in Actuarial Science, Risk Management, and Insurance. University of Wisconsin-Milwaukee – Milwaukee, Wisconsin Bachelor of Arts in Actuarial Science MS in Actuarial Science PhD in Actuarial Science The University of Wisconsin-Milwaukee has a Bachelor’s, Master’s, and PhD program within the College of Letters and Science. These programs, like many others, are designed to prepare students for later preliminary examinations (MFE/3F, MLC, C/4) and all three VEE credits. If desired, students can enhance their education beyond the basic requirements by taking additional courses on predictive modeling, finance, or economics. Georgia State University – Atlanta, Georgia B.B.A. in Actuarial Science Master of Actuarial Science Georgia State University’s Bachelor’s and Master’s program in Actuarial Science are offered by the Robinson’s Department of Risk Management & Insurance. The Department of Risk Management & Insurance has been ranked by U.S. News & World Report among the top 10 in the nation since 1999. Illinois State University – Normal, Illinois Major in Actuarial Science Graduate Studies in Actuarial Science Illinois State University also offers both a Bachelor’s and Master’s program in the Katie School of Risk Management and Insurance. The programs emphasize knowledge of finance, insurance and investments, excellent communication skills (especially the ability to communicate quantitative ideas to a non-mathematical audience), and a mastery of a computing and computer modeling. St. John’s University – New York, New York Actuarial Science, Bachelor of Science Actuarial Science, Master of Science St. John’s University in New York City offers a Bachelor’s and Master’s degree through the Peter J. Tobin School of Business. In addition to degrees in Actuarial Science, St. John’s Students also earn an undergraduate degree in business, which provides them with an education in accounting, finance, management, marketing, risk management and computer information systems. Towson University – Towson, Maryland Actuarial Science & Risk Management Concentration Actuarial Science & Predictive Analytics (M.S.) Towson University offers a Bachelor’s degree in Mathematics with a concentration in Actuarial Science and Risk Management, as well as a Master’s in Actuarial Science and Predictive Analysis. These two programs provide students with the ability to succeed in a market landscape that has increasingly adopted risk management practices and data analytics to increase efficiency. University of Michigan – Ann Arbor, Michigan Major in Actuarial Mathematics Actuarial Mathematics Master’s Program The University of Michigan offers an Actuarial Mathematics major within the Department of Mathematics. The pace of the program is intensive and students are encouraged to work a summer internship as well. The Actuarial Mathematics Master’s is also offered through the Math Department. University of Nebraska-Lincoln – Lincoln, Nebraska Actuarial Science Major Master’s Degree Program in Actuarial Science The University of Nebraska-Lincoln has an Actuarial Science Major and Master’s program within the finance department in the College of Business. For both programs, University of Nebraska-Lincoln offers courses that have been approved for the actuarial profession’s Validation by Educational Experience (VEE) program for the topics of Economics, Corporate Finance and Applied Statistics. Brigham Young University – Provo, Utah BS in Actuarial Science BYU offers an Actuarial Science Bachelor’s degree through the Department of Statistics. The program places a heavy emphasis on internship experience in order to combine the classroom knowledge with hands on experience. Drake University – Des Moines, Iowa Major in Actuarial Science Drake University’s Bachelor’s in Actuarial Science is one of the top private programs in the Midwest. Students will work closely with professors who have background experience as professional Actuaries. Many students from Drake have worked internships at prestigious companies such as such as American Republic, Athene, Farm Bureau, GuideOne, Nationwide, Allstate, Mutual of Omaha, The Principal Financial Group, Wellmark, and many others. Pennsylvania State University – University Park, Pennsylvania Actuarial Science Option (concentration) Penn State offers a concentration in Actuarial Science through the following three majors: Risk Management, Mathematics, and Statistics. The Actuarial Science Club within the University is an excellent support resource for undergraduate students looking to maximize their education during their time enrolled. Robert Morris University – Pittsburgh, Pennsylvania Actuarial Science B.S. Robert Morris’ Bachelor’s degree in Actuarial Science is offered by the RMU School of Engineering, Mathematics, and Science. Like certain other programs, the program places a priority on professional certification exams, with curriculum that integrates the mathematical foundations of actuarial science with intensive business education and communication skills. University of St. Thomas – St. Paul, Minnesota Major and Minor in Actuarial Science (B.S.) The University of St. Thomas offers its Bachelor’s degree in Actuarial Science within the College of Arts & Sciences. The program has been recognized for its unique combination of liberal arts education, rigorous actuarial curriculum and wide range of extracurricular opportunities.