Being an Actuary
The world is full of risk. There are several things you can obtain, such as cars, houses, and other goods that you and I would want to protect. Likewise, your own life is something of immense value. There’s no actual price to the gift of human life, but one profession works to determine risks and the math behind different outcomes. Working as an actuary involves several requirements include a degree and certification to earn the profession’s top salary.
The work of an actuary involves assessing risk and the several forms of insurance that exist for people, places, and things. The job requires significant knowledge in mathematics and statistics to evaluate what outcomes could emerge from a given situation. Many actuary degrees and certifications require a college education, with some graduate work recommended for the industry’s top positions.
If you enjoy math and statistics, then this could be an excellent profession for you. The relevant requirement for someone entering the work of an actuary is to enjoy these subjects. A great perk to the role of an actuary is also the salaries. With so much to learn about this incredible line of work, let’s review the details. To begin, you and I will discuss what the actual practice of actuarial science is and why it’s crucial.
Actuarial science is a formal mathematical discipline that uses statistics primarily to determine risk. Risk is essential in long terms financial industries such as insurance and pensions. In these areas, money is set aside for so long that any number of things could happen to it. Actuaries use a variety of mathematical and technological tools to evaluate and reduce this risk to optimize the outcome. In this category, I expect you’ll find actuarial science articles about the science itself as well as information about careers, links to additional resources, and more.
History of Actuarial Science
Because actuaries work in the financial industry with a heavy focus on insurance, the history of coverage, and the history of actuarial science are intertwined. You will find that the actuarial science articles I share here will shed light on this relationship through time, from the far past to current events.
Interest was born
Starting from the beginning, insurance in some form or another has been around since ancient times. In those days, large shipments of cargo going long distances needed funding from outside sources. The cargo was just too valuable for the sailors to risk losing it all on the way to its destination. Wealthier individuals saw that the trade was worth the risk, and decided to fund the journey while promising not to seek repayment if the cargo was lost. The catch was that if the shipment underwent trade, then the traders had to refund the investors their money. But in addition to the initial funding, it also has to pay a little extra as a thank you. Thus, interest was born.
By the 1300s, professionals took over this role of investing in risk, aka insuring. Types of insurance expanded to include not only marine trading but also pensions. Pensions provide money once someone has stopped working, preventing someone’s savings from running out. Both the marine and pension insurance demonstrates two critical concepts that formed the root of actuarial science; the idea of payment upon the loss of something valuable (ship cargo, savings, even life) and the idea of cash to prevent damage (running out of savings). To determine the amount of money necessary for these situations, actuaries need to assess the risk of loss.
Actuary Tools for Calculating Risk
In the 1600’s mathematical advances started picking up, allowing for better prediction methods in actuarial science. Collecting and analyzing data of past deaths meant actuaries could make predictions about the time of death in clients. Later on, in the 18th and 19th centuries, the complex calculations were simplified using commutation functions. The actuarial science articles in this category review the organizations that popped up to support actuaries as well as the public interest by ensuring a set of high standards.
During the 20th century, advancements in the processes for calculations led to improved methods of computation that took less time. The introduction of computers only added to this, leading the way to fast and advanced calculus with high accuracy. This relationship might make reading computer science and math articles a useful supplement to actuarial science articles.
Main Applications of Actuarial Science
If you’re just starting to look into the field, I guess you might be wondering what makes it so important in terms of modern society. The actuarial science articles in this category not only define the subject but also give you a clear picture of its importance as a profession. Through these articles, I hope you can learn the place it holds in society, and how you might become a part of it.
Insurance in the Job of an Actuary
While marine insurance and pensions were the first actuarial fields, many others have emerged over time. Actuary science also plays significant roles in health, property, and casualty insurance, as well as several requirements for asset management and financial investment. In the area of pensions, actuaries compare different strategies for saving and extending the life of saved money. They compare design, maintenance, funding, and accounting of different plans concerning short- and long-term factors.
In life insurance, actuaries typically focus on mortality, using tables and calculations to estimate a likely time of death. These days, life insurance also often includes insurance on credit and mortgages, as well as businesses and health savings accounts. Health insurance, on the other hand, looks at many contingencies such as disability, fertility, and morbidity in addition to mortality. Things that the consumer does that affect their health and safety are, understandably, of high importance in this area.
Risk Management and Investment
In general financial asset investment and management, actuaries look at the risk of certain market events and changes. They aim to maximize the gains made on the initial investment and also minimize losses. Overall, there are dozens of sub-fields within actuarial science. Some fields don’t qualify as actuarial science but play a significant role in the area. Probability theory, risk modeling, big data, statistics, and economics are all very relevant in the field. The actuarial science articles within this category further explore these areas and others to give you an idea of the range of the subject.
Actuary Salaries, Degrees, and Certifications
While actuaries can work in a variety of fields, as shown above, most work in insurance. In several cases, most of the jobs will be reasonably similar, taking place in an office setting with full-time hours. Being an actuary consistently makes the top of the list in rankings for the best jobs and salaries. This fact is due to its consistency, demand, and high pay. The median wages, according to the Bureau of Labor Statistics is over 100,000 dollars per year, and the need for actuaries means the growth of the field is quite fast.
A bachelor’s degree is essential. There are also several exams necessary for actuary degrees and certifications to gain professional credentials; seven, to be exact, or ten for specific certifications. Which degrees and certifications you do depends on the requirement of which type of actuary you want to become. For more information on exams, or perhaps preparing for them with some quality journals and magazines, check out the actuarial science articles in this category. You just might find the boost you needed for your actuarial science class. Plus, you could learn about the requirement or degrees necessary for the profession for which you’ve been searching.
Actuary Science Books
Actuarial science is an exciting and unique field that requires analyzing risk, or in other words, exploring the unknown. I think this requirement for the work of an actuary throws a lot of newcomers off. The best way I think you can begin to tackle the principles of actuarial science is to explore books on the subject. Many of the resources on this site help you to discover key elements of the profession. I don’t think reading a single book makes you an expert, but it does improve your understanding of the subject. Explore the responses to these questions and more through the actuarial science books available in this category of the website.
Books on Actuarial Science and Risk
Risk is something that you and I have had to deal with as humans since the dawn of time. Is hunting that buffalo worth the chance that it could hurt the hunters? Could sailing to the Americas be worth the risk of getting lost at sea? Is investing in Bitcoin worth the risk of an unstable market? As our chances have changed over time, so has our ability to assess and prepare for them. Actuarial science does just that, mainly in areas where money plays a significant role.
One example of the many recent changes to the field is the use of computers and programming. Algorithms and programs do a large amount of work for us now. Actuaries need to have a strong skill set in the area. Thus, actuarial science books like Linear Regression Using R can give you a leg up. This book teaches fundamentals of the programming language R and how to use it with large quantities of data. Many languages and techniques are useful for actuaries. You may even want to take a look at the programming books available through the site. I think you can benefit greatly from these resources.
Insurance and finance
As you can see, actuarial science relates to several subjects. Becoming skilled in the field means learning about math, statistics, probability, economics, and even computer science. The actuarial science books in this category show you how these topics relate to one another and actuarial science. At first, it might be best to keep the subjects reasonably isolated. Start with understanding them one by one, and then move on to the more complex relations between them.
After mastering the basics, look into specific fields and specialties. Insurance and finance, in particular, hold actuarial science in high regard since such large amounts of money are at play. In insurance and healthcare, companies face the risk of needing to pay for costly accidents or health problems. In these areas, actuarial science applies to everything from property to people. And often, these astronomical sums face substantial risks due to the extended amount of time they sit around and changes that can happen in that time.
The importance of the field in real life
For example, pension plans are so long-term that actuaries try to figure out the best course of action while taking into account how certain factors can change. Bond rates, employer competitors, workforce demographics, changes in revenue code; these short- and long-term trends all affect how pensions plans end up over time. In finance, on the other hand, changes in the economy or the successes and failures of the business itself are the risks at which actuarial science looks.
Actuarial science books that focus on the importance of the field in real life are essential for seeing the bigger picture. Risk Management for Enterprises and Individuals does this by guiding readers through various scenarios in which risk is a crucial factor. It uses real events such as the 2008 financial crisis to show the effects that risky decisions can have. These kinds of actuarial science books are great for getting a feel for the applications of the field or even for creating engaging course content as an educator.
Get Prepared with These Actuarial Science Books!
Having such a firm grasp on each part of the field is essential because actuaries must pass tough exams to become professionals. And the standards have only risen more and more over time, especially with the rise of computers and high-level computation. So, I hope you stay up to date and prepared for exams by looking into the actuarial science books in this category. The entire selection is just a click away for anyone around the world. Explore actuary salaries, information, and expert experience.
What Is an Actuary FAQ
If you wish to fulfill the requirements for actuary degrees and certifications for the top salaries, then check out some commonly reviewed questions.
Actuaries use data and statistics to analyze the risk regarding several elements of life. Anything from a car to a human being can face threats every day. Actuaries work to provide consumers and citizens with a calculation of the risks involved in something. From here, companies offer insurance based on the perceived risk of danger to a thing or person.
Actuaries earn a significant salary from the point of college graduation. The average salary for a professional in the field is over 100,000 dollars and increases with additional experience. Even out of college, many young professionals make more money than their counterparts in other applied sciences. The job requires significant education but pays well in the end.
To become an actuary, individuals must earn an education in actuarial science. From here, certifications provided through various actuarial boards to prove knowledge in the matter. The job involves a lot of math and critical thinking, so professionals must excel in both subjects. Once certified, professionals earn great pay and enjoy numerous job opportunities.
Actuaries are in demand because there is always a need to calculate risk. The world is increasingly interconnected, leading to more instances of danger. Actuaries pose the best approach to assessing threats to property and people to protect their value. Anyone who favors math or analysis should consider this job field.
The requirements to become an actuary involve several years of work on degrees and certifications. Once completed, the high actuary salaries and easy of finding job makes it a popular profession. Satisfaction within the business is high compared to many other applied sciences. The world needs actuary experts to assess different risks to manage insurance and property requirements accurately and fairly.
You should always consider the required certifications and degrees to become an actuary or any other profession. It takes a lot of work to become a professional in any established field. Before you can earn the top salaries in a role as an actuary, the process takes time and focus. Once achieved, you may find that the profession is entirely fulfilling, no matter how much work it takes. Hopefully, resources on Dave4Math can help.
Learn More About the World’s Leading Professions
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How could an actuary provide the public with safety information using statistics and data?
Why does technology produce new areas of focus in the study of actuarial science?