What an actuary does

An actuary uses mathematics, statistics, and financial data to measure and manage risk for insurance companies, pension funds, investment firms, and government agencies. They calculate the likelihood that specific events will happen — a person will file an insurance claim, a retiree will live to a certain age, a natural disaster will strike — and then figure out how much money an organization needs to set aside to cover those events when they occur.

The work is concrete and numerical. An actuary might determine how much a life insurance company should charge for a policy, calculate what a pension fund owes to its members over the next 30 years, or assess the financial impact of a new regulation. They present their findings to executives, regulators, and boards of directors, and their calculations directly shape business decisions and pricing.

Unlike some financial roles, actuarial work requires passing a series of standardized exams administered by professional societies. Those exams are the real barrier to entry and the reason the field has a reputation for being difficult to break into.

Key Takeaways

  • Actuaries must pass a sequence of exams — usually starting with Exam P and Exam FM — before they can work independently or advance in the field.
  • Most actuaries have a bachelor's degree in mathematics, statistics, actuarial science, or a related field, though the degree itself does not may provide a job.
  • Entry-level positions often require passing at least one exam before hire, so you should plan to study and sit for an exam while still in school or before applying.
  • The Society of Actuaries (SOA) and the Casualty Actuarial Society (CAS) administer the exams and set professional standards; which one you work toward depends on the type of insurance or risk you want to focus on.
  • Actuarial salaries vary widely by employer, location, and how many exams you have passed, but entry-level positions typically start between $55,000 and $75,000 per year.

The exam sequence and what it takes to pass

The Society of Actuaries (SOA) and the Casualty Actuarial Society (CAS) each administer their own exam track. Most people start with the SOA track if they are interested in life insurance, pensions, or investment risk, and the CAS track if they want to work in property and casualty insurance (car, home, liability). Some employers will hire you into an entry-level role before you pass any exams, but most expect at least one pass before you start.

The first two exams — Exam P (Probability) and Exam FM (Financial Mathematics) — are the gatekeepers. Exam P tests calculus and probability at the level of a third-year university mathematics course. Exam FM tests interest rates, bonds, and derivatives. Each exam costs between $200 and $300 to sit for, and you can take them multiple times if you fail. Most people spend 100 to 300 hours studying for each exam, spread over two to four months.

After you pass those two, the path splits depending on whether you are pursuing the SOA or CAS credential. The SOA requires additional exams in life contingencies, financial economics, and life insurance and annuities. The CAS requires exams in probability, financial mathematics, and loss models. The full sequence to reach the designation of Fellow (FSA or FCAS) typically takes five to seven years of part-time study while working.

Employers often pay for exam fees and study materials once you are hired, and many offer study time during work hours. The real cost is your own time.

Education and degree requirements

Most actuarial positions require a bachelor's degree. Common majors are mathematics, statistics, actuarial science, economics, or physics. Some schools offer a dedicated actuarial science program; others do not. The degree itself does not make you an actuary — the exams do — but it gives you the mathematical foundation you need to pass them and the credential employers expect to see on a resume.

If your school does not have an actuarial science program, you can still become an actuary by majoring in mathematics or statistics and taking electives in probability, financial mathematics, and economics. The key is to have strong calculus and linear algebra skills before you graduate.

Some employers will hire people without a degree if they have passed multiple exams, but this is rare and usually only happens if you have relevant work experience in finance or insurance. For most people, a bachelor's degree is the practical entry point.

How to prepare for your first exam while still in school

The best time to pass your first exam is before you graduate. Employers notice candidates who arrive with Exam P or Exam FM already passed, and it significantly improves your chances of getting hired into a competitive entry-level program.

Start by taking the relevant courses at your school — typically a probability course for Exam P and a financial mathematics or interest theory course for Exam FM. Then use a third-party study manual. The most common ones are the Coaching Actuaries (which offers video lectures and practice problems), the Actex study guides (which are textbooks), and the SOA's official sample exams. Most people combine a study manual with the official practice exams released by the SOA or CAS.

Register for the exam through the SOA or CAS website at least six weeks before your target test date. You can sit for exams year-round at testing centers in most cities. Plan to study for two to four months depending on how comfortable you are with the material, and give yourself at least two weeks to review and take full-length practice exams before test day.

Entry-level positions and where to find them

Entry-level actuarial roles are called actuarial analyst, actuarial associate, or junior actuary. Insurance companies, pension consulting firms, and large investment banks all hire for these positions. Some government agencies, including the Social Security Administration and state insurance departments, also employ actuaries.

Job postings appear on general sites like LinkedIn and Indeed, but you will find more targeted listings on the SOA and CAS career pages. Many large employers run formal internship and entry-level hiring programs in the fall and spring. Insurance companies like Aetna, Cigna, MetLife, and Allstate post regularly. Consulting firms like Mercer, Willis Towers Watson, and Milliman also hire entry-level actuaries.

Networking matters in this field. Attend SOA or CAS local chapter meetings, which are free and open to students. Talk to actuaries already working in roles you are interested in. Many employers will interview candidates who are referred by current employees before they interview candidates who apply cold.

Salary and career progression

Entry-level actuarial analyst positions typically pay between $55,000 and $75,000 per year, depending on the employer, location, and whether you have passed any exams. Passing your first exam usually brings a raise of $3,000 to $5,000. Each additional exam passed typically results in another raise.

After you reach the designation of Associate (ASA or ACAS), which usually takes three to five years, salaries typically range from $90,000 to $130,000. After you reach Fellow (FSA or FCAS), which takes another two to three years, salaries can exceed $150,000, with senior actuaries and those in leadership roles earning significantly more.

Salary varies by industry. Life insurance actuaries and pension actuaries often earn more than property and casualty actuaries. Consulting firms sometimes pay more than insurance companies, but they also often require more travel. Government positions typically pay less than private industry but offer more stable hours and better benefits.

Common obstacles and how people overcome them

The most common reason people leave the actuarial track is failing an exam multiple times. Exam P and Exam FM have pass rates around 30 to 40 percent on the first attempt. If you fail, you can retake it, but each attempt costs money and time. Some people take an exam three or four times before passing. If you struggle with the material, consider hiring a tutor or joining a study group rather than giving up.

Another obstacle is getting hired without having passed an exam. If you graduate without passing Exam P or FM, your job search will be harder. Some employers will still hire you and give you time to study, but most prefer candidates who have already demonstrated they can pass. If you did not pass before graduation, pass one in your first few months of job searching.

A third issue is choosing the wrong exam track. If you take the SOA track and then realize you want to work in property and casualty insurance, you will have to start over with the CAS exams. Before you commit to studying for your first exam, talk to actuaries working in the type of insurance or risk you are interested in and confirm you are on the right track.

Frequently Asked Questions

Do I need a specific degree to become an actuary?

No specific degree is required, but you need a strong foundation in mathematics. A bachelor's degree in mathematics, statistics, actuarial science, or a related field is the standard path. Some employers will consider candidates with degrees in economics or physics if they have taken advanced mathematics courses and have passed multiple exams.

How long does it take to become a fully credentialed actuary?

It typically takes five to seven years from your first exam to reach the Fellow designation (FSA or FCAS), assuming you study part-time while working and pass each exam on your first or second attempt. If you pass exams more slowly or take longer between attempts, it can take longer.

What is the difference between the SOA and CAS?

The Society of Actuaries (SOA) focuses on life insurance, pensions, and investment risk. The Casualty Actuarial Society (CAS) focuses on property and casualty insurance — car, home, and liability coverage. The exams are different, and the credentials are not interchangeable, so choose based on the type of work you want to do.

Can I work as an actuary without passing all the exams?

Yes. You can work as an actuarial analyst or associate without being a Fellow. Many people work in actuarial roles for years while studying for exams. However, advancement to senior roles and higher pay typically requires passing more exams.

What happens if I fail an exam?

You can retake it. Most people who fail their first attempt pass on the second or third try. There is no limit to how many times you can sit for an exam, though each attempt costs money and time. If you fail repeatedly, consider getting a tutor or changing your study method.