Career Outlook

Actuarial skills are based upon basic foundational skills necessary to conduct financial analysis and manage financial risks, including interest theory, finance, economics, statistics, probability, and modeling. As such, actuarial skills are transferable within to any industry that must mitigate risk. Because actuaries wear many hats, the career outlook is dependent upon the industry in which they work and the type of work they do. Another driver of career potential is geographic location. Some of the career outlook information provided here is based upon information provided by the U.S. Department of Labor Occupational Handbook 2002-2003 edition.

Within the insurance industry where actuaries have traditionally worked to develop, price, and evaluate financial insurance products such as life, auto, health or homeowners insurance, actuarial positions are expected to grow between 3-9% through 2010. The fastest employment growth is expected in industries including finance and investment, banking and investment advise, software development and data processing services, health services and management and actuarial consulting.

While the life insurance industry has seen a slight decline over the last decade resulting from fewer life insurance policies sold in favor of investments earning higher returns, there has been a sharp increase in annuity sales, and life companies have generally shifted their emphasis from insurance to retirement savings products. Also, the recessionary trend in the economy and stock market decline starting in 2001 has made people more aware of the return volatility of certain investments, which could potentially create an increase demand for the safety of guaranteed returns offered by certain annuity products. This need will also increase as the populations of industrialized nations age, which is likely to have a lower tolerance for risky investments.

Increasingly actuaries serve as consultants to companies that do not have actuaries on staff to develop pension and retirement planning programs. Management consulting, especially HR consulting in the healthcare and retirement planning field, is expected to growth faster than the average through 2010 or greater than 36%. In addition, to meet the growing need of the aging population to manage retirement planning, actuaries will increasingly find roles as financial planning advisors.

The terror attacks starting in 2001 have increased the needs by many to mitigate the risks of terrorism, particularly through property and casualty insurance. Actuaries will increasingly find opportunities to evaluate and manage risks associated with terrorism. Additionally, actuaries will continue to be needed to evaluate risks associated with other catastrophes, such as earthquakes, tornadoes, hurricanes, floods, and other natural disasters. Growing areas in property and casualty insurance are environmental and operational risk management. Actuaries evaluate risks such as the likelihood environmental impacts of water environmental management, or the costs and benefits of implementing pollution control equipment in a factory. Finally, they rely on actuaries to evaluate the risks of building versus buying new facilities or capital equipment.

Events stemming from the 2002 collapse of Enron and Arthur Anderson due to financial reporting issues have increased the need by many organizations for enterprise risk management functions to manage internal audit, investments, strategic planning, pricing of financial products, compliance and capital planning. Actuaries will increasingly find opportunities in this new organizational function, as the Chief Risk Officer, or as consultants to the Chief Risk Officer.

The banking and investment industries should increasingly provide jobs for actuaries. As financial services such as insurance firms, commercial banks and financial advisory firms continue to consolidate, new opportunities will emerge. Actuaries will be needed to analyze the risks associated with entering a new market with new products or facilities, or merging with an already established company. Jobs in which actuaries conduct financial analysis or financial management are expected to grow at faster than the average, or greater than 36%, through 2010.

New employment opportunities should become available in health services, in medical and health insurance industries, and in government-in healthcare and Social Security. Changes in managed healthcare and the desire to contain healthcare costs will continue to provide opportunities for actuaries. Some actuaries also are evaluating the risks associated with controversial medical issues, such as genetic testing or the impact of diseases such as AIDS. Others in this field are involved in drafting healthcare legislation. As healthcare issues and Social Security reform continue to receive growing attention, opportunities for actuaries should increase.

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