Where Do Actuaries Work and What Do They Do?

The insurance industry can't function without actuaries, and that's where most of them work. They calculate the costs to assume risk—how much to charge policyholders for life or health insurance premiums or how much an insurance company can expect to pay in claims when the next hurricane hits Florida.

Actuaries provide a financial evaluation of risk for their companies to be used for strategic management decisions. Because their judgement is heavily relied upon, actuaries' career paths often lead to upper management and executive positions.

When other businesses that do not have actuaries on staff need certain financial advice, they hire actuarial consultants. A consultant can be self-employed in a one-person practice or work for a nationwide consulting firm. Consultants help companies design pension and benefit plans and evaluate assets and liabilities. By delving into the financial complexities of corporations, they help companies calculate the cost of a variety of business risks. Consulting actuaries rub elbows with chief financial officers, operating and human resource executives, and often chief executive officers.

Actuaries work for the government too, helping manage such programs as the Social Security system and Medicare. Since the government regulates the insurance industry and administers laws on pensions and financial liabilities, it also needs actuaries to determine whether companies are complying with the law.

Who else asks an actuary to assess risks and solve thorny statistical and financial problem? You name it: Banks and Investment firms, large corporations, public accounting firms, insurance rating bureaus, labor unions, and fraternal organizations.

To summarize, actuaries work for a variety of employers, including:

• Insurance companies
• Consulting firms
• Government insurance departments
• Colleges and universities
• Banks and investment firms
• Large corporations and public accounting firms

The following is a list of typical actuarial projects:

• Analyzing insurance rates, such as for cars, homes or life insurance.
• Estimating the money to be set-aside for claims that have not yet been paid.
• Participating in corporate planning, such as mergers and acquisitions.
• Calculating a fair price for a new insurance product.
• Forecasting the potential impact of catastrophes.
• Analyzing investment programs.