5.8 KiB
| title | chunk | source | category | tags | date_saved | instance |
|---|---|---|---|---|---|---|
| Actuary | 3/3 | https://en.wikipedia.org/wiki/Actuary | reference | science, encyclopedia | 2026-05-05T10:09:59.049101+00:00 | kb-cron |
=== Development of the modern profession ===
In the 18th and 19th centuries, computational complexity was limited to manual calculations. The calculations required to compute fair insurance premiums can be burdensome. The actuaries of that time developed methods to construct easily used tables, using arithmetical short-cuts called commutation functions, to facilitate timely, accurate, manual calculations of premiums. In the mid-19th century, professional bodies were founded to support and further both actuaries and actuarial science, and to protect the public interest by ensuring competency and ethical standards. Since calculations were cumbersome, actuarial shortcuts were commonplace. Non-life actuaries followed in the footsteps of their life compatriots in the early 20th century. In the United States, the 1920 revision to workers' compensation rates took over two months of around-the-clock work by day and night teams of actuaries. In the 1930s and 1940s, rigorous mathematical foundations for stochastic processes were developed. Actuaries began to forecast losses using models of random events instead of deterministic methods. Computers further revolutionized the actuarial profession. From pencil-and-paper to punchcards to microcomputers, the modeling and forecasting ability of the actuary has grown vastly. Another modern development is the convergence of modern finance theory with actuarial science. In the early 20th century, some economists and actuaries were developing techniques that can be found in modern financial theory, but for various historical reasons, these developments did not achieve much recognition. In the late 1980s and early 1990s, there was a distinct effort for actuaries to combine financial theory and stochastic methods into their established models. In the 21st century, the profession, both in practice and in the educational syllabi of many actuarial organizations, combines tables, loss models, stochastic methods, and financial theory, but is still not completely aligned with modern financial economics.
== Remuneration and ranking == As there are relatively few actuaries in the world compared to other professions, actuaries are in high demand, and are highly paid for the services they render. The actuarial profession has been consistently ranked for decades as one of the most desirable. Actuaries work comparatively reasonable hours, in comfortable conditions, without the need for physical exertion that may lead to injury, are well paid, and the profession consistently has a good hiring outlook. Not only has the overall profession ranked highly, but it also is considered one of the best professions for women, and one of the best recession-proof professions.
== Credentialing and exams ==
Becoming a fully credentialed actuary requires passing a rigorous series of professional examinations, usually taking several years. In some countries, such as Denmark, most study takes place in a university setting. In others, such as the US, most study takes place during employment through a series of examinations. In the UK, and countries based on its process, there is a hybrid university-exam structure.
=== Exam support === As these qualifying exams are extremely rigorous, support is usually available to people progressing through the exams. Often, employers provide paid on-the-job study time and paid attendance at seminars designed for the exams. Also, many companies that employ actuaries have automatic pay raises or promotions when exams are passed. As a result, actuarial students have strong incentives for devoting adequate study time during off-work hours. A common rule of thumb for exam students is that, for the Society of Actuaries examinations, roughly 400 hours of study time are necessary for each four-hour exam. Thus, thousands of hours of study time should be anticipated over several years, assuming no failures.
=== Pass marks and pass rates === Historically, the actuarial profession has been reluctant to specify the pass marks for its examinations. To address concerns that there are pre-existing pass/fail quotas, a former chairman of the Board of Examiners of the Institute and Faculty of Actuaries stated: "Although students find it hard to believe, the Board of Examiners does not have fail quotas to achieve. Accordingly, pass rates are free to vary (and do). They are determined by the quality of the candidates sitting the examination and in particular how well prepared they are. Fitness to pass is the criterion, not whether you can achieve a mark in the top 40% of candidates sitting." In 2000, the Casualty Actuarial Society (CAS) decided to start releasing pass marks for the exams it offers. The CAS's policy is also not to grade to specific pass ratios; the CAS board affirmed in 2001 that "the CAS shall use no predetermined pass ratio as a guideline for setting the pass mark for any examination. If the CAS determines that 70% of all candidates have demonstrated sufficient grasp of the syllabus material, then those 70% should pass. Similarly, if the CAS determines that only 30% of all candidates have demonstrated sufficient grasp of the syllabus material, then only those 30% should pass."
== Notable actuaries ==
== Fictional actuaries ==
Actuaries have appeared in works of fiction including literature, theater, television, and film. At times, they have been portrayed as "math-obsessed, socially disconnected individuals with shockingly bad comb-overs", which has resulted in a mixed response amongst actuaries themselves.
== Notes ==
== Citations ==
== Works cited ==
== External links ==
"Be An Actuary". www.beanactuary.org. Retrieved November 5, 2025. The SOA and CAS jointly sponsored web site