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The Nature of Actuary Jobs

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Actuary and underwriting jobs are not two of the positions that most young people dream of fulfilling — not even those who seek careers in business. Actuary and underwriting positions are rather abstract to those who don't already do them, or personally know someone who does. However, they can be highly lucrative, and are very important professional roles. Those with actuary jobs and underwriting jobs often work hand in hand, such as at insurance companies.

According to the Investment Dictionary, an underwriter is "A company or other entity that administers the public issuance and distribution of securities from a corporation or other issuing body. An underwriter works closely with the issuing body to determine the offering price of the securities, buys them from the issuer and sells them to investors via the underwriter's distribution network."

Investopedia says, "Underwriters generally receive underwriting fees from their issuing clients, but they also usually earn profits when selling the underwritten shares to investors. However, underwriters assume the responsibility of distributing a securities issue to the public. If they can't sell all of the securities at the specified offering price, they may be forced to sell the securities for less than they paid for them, or retain the securities themselves."



In the insurance world, an underwriter is a company that assumes the cost risk of death, fire, theft, illness, etc., in exchange for payments called premiums. (Insurance agents are known as "field underwriters".)

The vast majority of actuary jobs involve working for an insurance firm. In fact, the Insurance Dictionary defines an actuary as "a mathematician in the insurance field. Actuaries conduct various statistical studies; construct Morbidity and Mortality Tables; calculate premiums, reserves, and dividends for participating policies; develop products; construct annual reports in compliance with numerous regulatory requirements; and in many companies oversee the general financial function. The successful actuary has a strong general business background as well as mathematical ability. Professional actuarial associations provide actuarial qualification examinations."

And Investopedia comments that "actuaries are intensively educated and their knowledge is used in many different fields in order to predict future events based upon past occurrences."

Actuary jobs are very secure and pay well, because they require a unique mixture of aptitude and knowledge that many people simply do not possess. Actuaries must have strong mathematical skills, and be superior at analyzing, as well as correctly gathering, statistics. An actuary must possess a strong business background. Business aptitude and mathematical skill do not typically come together in the same person, as one skill set relies heavily on interpersonal relationships and intuition, while the other rests on being able to think abstractly and symbolically while seeing and absorbing a very broad perspective.

The U.S. Bureau of Labor Statistics says, "Usually, actuaries earn an undergraduate degree in mathematics, statistics or actuarial science, or a business-related field such as finance, economics or business. While in college, students should complete coursework in economics, applied statistics and corporate finance, which is a requirement for professional certification. Furthermore, many students obtain internships to gain experience in the profession prior to graduation. About 100 colleges and universities offer an actuarial science program, and most offer a degree in mathematics, statistics, economics, or finance."

Actuary jobs also require strict licensing requirements to be met. "Two professional societies sponsor programs leading to full professional status in their specialty: the Society of Actuaries (SOA) and the Casualty Actuarial Society (CAS). The SOA certifies actuaries in the fields of life insurance, health benefits systems, retirement systems, and finance and investment. The CAS gives a series of examinations in the property and casualty field, which includes car, homeowners, medical malpractice, workers compensation, and personal injury liability," says the Bureau.

If one wishes to be an underwriter, one will need a bachelor's degree, preferably in business administration or finance, and should have a minor or some other experience in accounting. While underwriters don't need the mathematical aptitude of the actuary, they do need to be a quick study on using analytical software, and be able to demonstrate a keen grasp of finance and economics, especially with regards to accurately calculating and assessing potential risk. Underwriters are required to attend continuing education classes in their early years if they want to advance in their profession. Those beginning a career in underwriting business insurance policies may hold an Associate in Commercial Underwriting (ACU) degree, while those interested in underwriting personal insurance policies may hold an Associate in Personal Insurance (API) degree.

Underwriters have desk jobs as do actuaries, but may travel more often, in order to personally inspect sites or companies to more carefully assess risks.

Even entry-level assistant actuary jobs pay an average of more than $60,000 per year. Full-fledged actuaries earn an average of about $84,000 per year, while actuarial directors almost always earn over $100,000 per year.

Junior or assistant underwriters may be paid in the low-$30,000-per-year range. More experienced or better-educated underwriters should expect to earn over $45,000 per year, and once they have earned more advanced continuing education degrees, they can easily earn above $60,000 per year. Senior underwriters often earn more than $80,000 per year and even six figure salaries. The national average pay for underwriters is around $75,000 per year.

Actuaries should seek jobs first with any insurance companies who are in the Fortune 1000. If none can be found there, smaller insurance firms should be solicited. Underwriters should also seek positions with Fortune 1000 insurance companies, but if they find it difficult to find employment with these firms, they might seek work with other financial institutions on Wall Street. For Underwriters, one of the best non-insurance companies to work for is considered to be HomeBanc Mortgage.

For those who love business, and have aptitudes in risk assessment or statistics, actuary jobs and underwriter jobs may be perfect positions. These jobs are stable, offer great advancement opportunities, and pay well.
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