Most professionals would agree that understanding salary potential is an important factor when choosing a career path.
In this post, we'll demystify the pay structure for one complex but lucrative field - actuarial science. You'll get a clear picture of average salaries at each certification level, along with key geographic and industry variations.
Whether you're an aspiring actuary or just curious about this somewhat mysterious profession, you'll leave with a solid grasp of what actuaries earn and what impacts their compensation over time.
Introduction to Actuary Salaries
Defining an Actuary
Actuaries are professionals who analyze financial risk and uncertainty. They use mathematics, statistics, and financial theory to assess the risk of potential events, help businesses and clients develop policies that minimize risk, and determine appropriate pricing for insurance premiums, investments, and other financial strategies. Actuaries' work requires strong analytical skills, business acumen, and understanding of human behavior.
National Salary Overview
According to the U.S. Bureau of Labor Statistics (BLS), the median annual salary for actuaries is $108,350 per year nationwide. This is significantly higher than the national median salary across all occupations ($39,810). Actuaries' high pay reflects the advanced technical skills and specialized knowledge required for the profession.
When comparing to related fields, actuaries earn more on average than financial analysts ($81,590) but slightly less than statisticians ($92,270) according to BLS data. However, actuary salaries can vary considerably based on geographic location, certification level, and specific industry.
Salary by Certification Level
Actuaries' pay tends to increase with higher levels of professional certification from organizations like the Society of Actuaries (SOA) or Casualty Actuarial Society (CAS). Common certification levels include:
- Associate of the Society of Actuaries (ASA) - $120,000 avg. salary
- Fellowship of the Society of Actuaries (FSA) - $175,000 avg. salary
- Associate of the Casualty Actuarial Society (ACAS) - $115,000 avg. salary
- Fellowship of the Casualty Actuarial Society (FCAS) - $210,000 avg. salary
Achieving FSA or FCAS certification requires passing a rigorous series of exams and can take 5-7 years. However, the payoff is worth it - Fellow designations unlock senior actuary positions with high earning potential.
Key Factors Impacting Actuary Salaries
Actuaries' salaries can vary significantly depending on several key factors. By understanding how these variables impact pay, you can better gauge average actuary salaries and earning potential.
Geographic Location
Location is one of the biggest drivers of actuary pay in the United States. States with major insurance hubs and consulting firms tend to offer higher salaries. For example:
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New York and Connecticut - Known for having higher actuary salaries due to the concentration of jobs in finance and insurance. Average salaries often exceed $100k.
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Illinois and Wisconsin - Major hubs for health insurance, driving demand for actuaries. Average salaries range from $80k to $120k.
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California, Texas, and Florida - Major states with many opportunities, but the lower cost of living impacts salaries. Pay averages $70k to $100k.
Smaller states see lower actuary salaries on average, but there are still plentiful job opportunities nationwide. Government and regulatory actuary roles also tend to pay slightly less but offer good work-life balance.
Industry
The property and casualty insurance industry offers some of the highest paying actuary jobs. Consulting firms also pay above-average salaries but demand longer hours.
- Insurance carriers - $85k to $150k
- Consulting firms - $90k to $160k
- Government - $65k to $115k
- Corporate - $75k to $130k
Health insurance actuaries make slightly less than P&C on average, while pension actuaries see lower starting salaries but better long-term earnings.
Work Experience
Entry-level actuaries with 0-2 years of experience have average starting salaries around $60k, while senior-level actuaries with 10+ years of experience can make well over $150k on average.
Much of this salary growth comes from passing actuarial exams, which increase technical expertise. Getting an ASA or FSA credential also dramatically boosts earning potential over time.
Primary Career Paths for Actuaries
Actuaries have several common career advancement opportunities that typically come with increased responsibilities and higher salaries. Here is an overview of some of the most common actuary roles and their average compensation.
Entry-Level Actuary
Entry-level actuaries, sometimes called actuarial analysts, generally have 0-2 years of experience. Common responsibilities include:
- Collecting data and performing analysis to assess risks and costs
- Building predictive models to determine insurance rates and reserves
- Preparing reports and presentations to explain findings and recommendations
- Obtaining actuarial credentials and passing professional exams
According to PayScale data, entry-level actuaries earn an average salary of $65,000 per year.
Associate Actuary
After gaining 2-4 years of experience, actuaries often advance to an associate actuary role. Associate actuaries take on more complex tasks such as:
- Leading teams and managing projects
- Developing new product pricing models
- Presenting analysis and recommendations to executives
- Continuing to pass actuarial exams and obtain credentials
Associate actuaries earn average salaries of $80,000-95,000 per year.
Chief Actuary
With 8+ years of actuarial experience, actuaries can rise to chief actuary positions. As the top actuary in an organization, their responsibilities include:
- Overseeing all actuarial operations and strategy
- Advising C-suite executives on risk management
- Ensuring regulatory and legal compliance
- Setting policies and standards for the actuarial team
Chief actuaries are highly experienced professionals who earn six-figure salaries, with average pay of approximately $160,000 per year according to recruitment firm Ezra Penland.
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Job Outlook for Actuaries
Actuaries have a promising job outlook, with strong market demand expected in the coming years. This is driven by the need for expertise in risk management across many industries.
Market Demand
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The U.S. Bureau of Labor Statistics projects employment for actuaries to grow 18% from 2020 to 2030, much faster than the average across all occupations. This translates to roughly 5,500 additional actuary jobs during this period.
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High demand is expected in the insurance industry as companies develop new products and services. Additionally, the healthcare sector will rely on actuaries to manage risk and costs associated with insurance programs.
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According to a 2021 report from Ezra Penland Actuarial Recruitment, the number of open actuary positions per applicant was around 1.9. This indicates there are nearly two job openings for every qualified applicant, underscoring the strong job market.
Talent Pipeline
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While demand is increasing, the talent pipeline for actuaries remains narrow. Only around 5,000 students graduate each year with degrees geared toward actuarial science.
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With over 18,000 current members, the Society of Actuaries estimates less than 30% of students who start actuarial exams finish them. This high attrition rate limits the number of candidates able to fill open positions.
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If degree production continues at current rates, the actuarial field may face a talent shortage in the coming decade as demand rises. Additional education programs and exam support resources could help address pipeline issues long-term.
Career Planning Tips for Aspiring Actuaries
Offer practical tips for those interested in entering the actuarial field in regards to education, exams, internships, and skill development.
Pursuing an Actuarial Degree
When choosing an undergraduate or graduate program in actuarial science, look for a university that:
- Is accredited by either the Society of Actuaries (SOA) or Casualty Actuarial Society (CAS). This ensures the curriculum aligns with professional exam requirements.
- Offers exam prep courses and administers some exams on campus. This support can save you time and money.
- Provides robust internship and job placement services with connections to major insurance companies and consulting firms.
Ideally pursue at least a bachelor’s degree, as many employers now expect this level of education. Consider a master's degree for advanced career opportunities.
Taking Actuarial Exams Early
- Plan to pass 1-2 professional actuarial exams before graduating. This signals competence and motivation to employers.
- The SOA's Exam P and FM (or CAS Exam 1 and 2) are common entry-level tests to complete first.
- Start exam prep 6 months in advance. Use study manuals, online courses, practice tests, and study groups.
- Sit for exams right when you complete related coursework for maximum retention and efficiency.
- Passing just one exam can open doors to internships and improve new grad job prospects.
Building exam momentum and preparation skills early on will serve you well in the intensive actuarial exam process. Choose tests strategically based on university course topics to optimize study time during school.
Conclusion and Key Takeaways
Salary Snapshot
The national average salary for actuaries is around $108,350 per year. However, pay can vary significantly based on factors like:
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Location - Actuaries in major metropolitan areas and financial hubs typically earn higher salaries. For example, average pay in New York City and San Francisco can exceed $130,000.
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Role type - Consulting actuaries tend to have higher earning potential than insurance company actuaries. Chief actuary roles also command top-tier salaries.
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Credentials - Getting an actuarial certification adds thousands to salary potential. Fully credentialed actuaries enjoy average pay above $160,000.
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Experience - Each year of relevant experience gradually increases salary expectations. Actuaries with 10+ years of experience can reasonably expect over $150,000 on average.
So while $108k represents average national pay, six-figure earning potential is readily achievable for fully-credentialed actuaries working in major metro areas.
Job Outlook
The job outlook for actuaries is extremely positive:
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The actuarial field expects to grow at a rate of 20% over the next decade, over 3 times faster than the national average across all occupations. Open positions are abundant.
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Actuaries enjoy one of the lowest unemployment rates among all professions - generally between 1-2% even in weak economies.
So substantial career opportunities await those looking to enter the actuarial science field. Job security is high while positions continue proliferating over the next 10 years.
