Twenty years ago, you could ask a large group of actuaries, "How many of you first learned of the actuarial profession while in high school?" and only a small handful would raise their hands.
Now, it's amazingly common — even the rule — for university actuarial science majors to enter college as incoming freshmen having firmly decided at the age of 16 or 17 that they want to pursue an actuarial career.
How has this change come about?
As we wrap up Insurance Careers Month this February, I felt compelled to talk about some of the major reasons why actuarial science — the study of risk contingencies and their potential impact on individuals and societies — has become such an attractive career to so many.
|1. It's multidisciplinary
Actuarial science may well be the most multidisciplinary of professions because almost any field of inquiry you can think of has implications for an actuary's work. Modeling and evaluating potential catastrophic events requires knowledge of several sciences. Understanding psychology and sociology are necessary to model human behavior in a risky environment. Finance and economics are the contextual basis for estimating the potential financial impact of risk. And try modeling terrorism risk without an understanding of socioeconomic and political issues on a global scale. For an actuary, there's always something new and relevant to learn.
|2. It's challenging
In part because of its multidisciplinary nature, and because of the level of technical skill and insight involved, the actuarial profession is a challenging one. Furthermore, it is rare for an actuary to know or intuit the precise outcome of an actuarial project or analysis beforehand. The profession thus appeals to those who like to solve problems. Whether crosswords, Sudokus, or mathematical brain-twisters, most actuaries love to solve puzzles! Quantifying new or unusual emerging risks is an important and challenging real-world puzzle.
|3. It's essential
The ability to price risk contingencies is an essential part of our economy and society. Without an active insurance market and a strong quantitative foundation for measuring the potential impact of risks, developments in the world that we take for granted don't occur: The bridge and skyscraper aren't built, people don't live in certain areas, and new products aren't invented and disseminated. Most people, and Millennials in particular, like to know that they're doing something important and useful in their jobs, and actuarial science is an essential function underlying our world and lifestyle.
Related: Actuaries do far more than play by the numbers
|4. It's blended
Actuarial science is a perfect blend of the theoretical and practical, of mathematics and business. Many actuaries, generally having excelled in math classes, at some point in their education consider graduate study in mathematics, but often don't have the desire or inclination to submerse themselves in abstractions. They have a need for the pragmatic, and they find business issues and problems to be attractive targets for mathematical application. Mathematical theory and reasoning are employed — but to a specific solid and practical end.
|5. It's rewarding
No one can deny that the perennial placing of the actuarial profession at or near the top of most job and career rankings is a major factor in students choosing to pursue the discipline! Rising salaries, historically favorable supply-demand situations and steady employment certainly appeal and attract. But these are perhaps reasons that someone is initially inspired to consider a career in actuarial science; the reasons listed here are what solidify and maintain that interest throughout a lifetime. And perhaps the biggest continuing reward of all is the opportunity and privilege to participate in a community of intelligent and dedicated individuals.
Why would someone want to be an actuary? Why would they not?
Rick Gorvett, FCAS, PhD, is staff actuary of the Casualty Actuarial Society. He can be reached at [email protected].
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