An actuary is a business professional that deals with the risk and management of uncertainty in the business world. An actuary can help predict market trends and human behavior that impact a business or field. The name of the field is “Actuary Science,” and it involves mathematics, business skills and assessing the risks of the business and the market.
Do you need a degree to become an actuary? In order to be an actuary in the United States, you will need at least a bachelor’s degree, although the major does not have to be in actuary science. An actuary uses mathematics and statistics to predict trends that may affect the business and the market.
The requirements of being an actuary vary from country to country. The job is quite complex. An actuary not only needs to fulfill the education requirements, but also must possess the talent to predict market trends in business.
An actuary is essential in the business world as there needs to be a balance and measurements of taking risks in the business world. Let’s dig deeper and see if it’s right for you.
Do You Need A Degree To Become An Actuary?
In order to become an actuary in the United States, you need at least a bachelor’s degree. The focus of the study of the degree is irrelevant. However, there are many rigorous tests that are required before you become an actuary.
Because the tests to become an actuary are so difficult, there are classes and seminars which are taught to help people prepare for the tests. Employers in the business field will often allow for time off to study for these tests and to attend seminars.
It is suggested that for each 4-hour exam, there should be at least 400 hours of study and preparation before taking the test. For incentive, many companies will give a pay raise or bonus to the actuary as they pass their exams.
Most companies recommend a master’s degree in business, management, or actuary sciences. An additional degree is sure to boost the pay rate and offer more opportunities in the future.
What Does An Actuary Do?
An actuary uses mathematics, statistics, computer science, prediction, and human behavior statistics to analyze risks. There are actually two different disciplines in actuary science:
- Life Actuary – These actuaries typically deal with the risks and measurements of health, pension, mortality risk, and investment risk. They typically deal with life insurance, annuities, short- and long-term disability, health insurance, and health savings accounts.
- Non-life Actuary – These actuaries typically deal with both physical and legal risks that affect people and their property. They deal with auto insurance, homeowners’ insurance, commercial property insurance, worker’s compensation, and malpractice insurance.
Both disciplines of actuaries calculate premiums and reserves for insurance plans. They use statistics to predict the probability of a loss event, called “frequency,” and the size of the loss event, called “severity.” The life actuary often measures how much a sum of money or financial liability will be worth in the future.
Actuaries do not always work to predict the future. “Retrospective reinsurance” is when an actuary calculates the cost of an event after it has already occurred. Actuaries also work under a code of ethics, which dictates the quality of their communication and work.
What Does a Business Analyst in Consulting Firms Do?
A business analyst in a consulting firm conducts a market analysis of the product line and the profitability of a business. They also develop and monitor data quality metrics and ensure business data and reporting needs are met.
Typical job duties of a business analyst are as follows:
- Creating a detailed business analysis
- Outline problems and solutions for the business
- Forecasting the budget
- Planning and monitoring
- Financial modeling
- Variance analysis
- Defining business requirements
- Reporting back to the stakeholders
A Bachelor’s Degree is required to become a business analyst. Typical college degree majors for a business analyst career are:
- Business Studies
- Business Administration
- Information Technology
Required skills to become a business analyst are experienced working with senior decision-makers, strong communication skills, analytical background, and skills in Excel.
What Business Professions Do Not Require A Degree
Besides an actuary and a business analyst, there are many other positions that are needed in the business field, and not all of them require a degree.
The following professions are typically in a firm, and they usually do not require a college degree:
- Social Media Manager
- Administrative Assistant/Secretary
- Web Developer
- Computer Programmer/IT
- Systems Analyst
- Network Engineer
- Computer Support Specialist
- Digital Marketer
- Graphic Designer
- Telecommunications Technician
These professions may be low paying compared to professions that require a degree, but the salary is great, considering there is no financial investment or loss. These positions are also great stepping stones for the business student that is balancing school and work.
What Are The Top Paid Business Professions?
Of the many professions in the business world, there are some that are higher paying than others. Considering that the salary is higher, it makes the investment of a degree worth it in the long run. These professions have a higher salary although most require a degree (arranged in highest to lowest):
- Chief Executive Officer (CEO)
- Marketing Managers
- Personal Finance Advisor
- Agents and Business Managers
- Human Resources Managers
- Sales Managers
- Financial Examiners
- Management Analyst
Of course, the salaries of these positions vary greatly, especially when considering what kind of business, it is, what the product is, and where it is located. These positions are typically the highest-paid positions of business and most recommend a degree, if not require it.
Check out the salaries near you by consulting the Occupational Outlook Handbook of the U.S. Bureau of Labor Statistics (BLS) or by looking at online job-seeking platforms, such as Glassdoor or PayScale, to get an idea of what to expect.
It is also important to note that the field of an actuary is one of the most desirable careers and high-paying jobs. It’s been ranked time and again in the top 10 for most desired professions in the United States – and with a strong job outlook. The BLS says it will grow at 20% in the next 9 years, while the average growth across America is 5%.
Is A Degree Required To Work In Business?
The short answer is no. However, it is recommended in almost all professions because it can improve your skills and knowledge of the industry. An entrepreneur, for example, does not require a degree. But it would probably be a good idea to have one anyway.
The pay scale for business professions varies dramatically, but there are well-paid professions that do not require a degree and are still a stable career choice. For higher-paying positions, a degree is typically required.
Is A Degree Required To Be An Actuary?
A college degree is required to become an actuary in the United States, in addition to many other requirements such as exams, certifications and a code of ethics. The area of the degree is irrelevant, but it is recommended that a person pursuing an actuary career should major in mathematics, statistics, business or management.
The exams required to be an actuary are very rigorous, although most business employers are supportive of the process and offer time off to study as well as financial incentives once the exams are passed. There is also a code of ethics that the actuary must abide by. You can check that out here.
Overall, a business degree is recommended in all business professions as it can strengthen your resume and offer more opportunities. While a person may be apprehensive about investing thousands of dollars into their education, the end goal should be the motivation. For, while studying and exams are difficult, in the end, they guarantee more money and more opportunity.