From Teacher to Actuary

Former teacher performing actuarial work

This is the first article in our career changer teacher to actuary series! Many math teachers have questioned what the actuarial field is or whether they would have a more fulfilling career as an actuary. The biggest problem for teachers is that they do not know where to start when they decide to make the switch. We aim to give you insight into how to get started on a career transition from teaching to actuarial work!

Actuary Quick Facts

  • Subjects/Areas of Interest: Math, Statistics, Finance, Business  
  • Education Required: Bachelor’s Degree in a relevant field (Any STEM degree)
  • Median Pay: $108,350/year (US Bureau of Labor Statistics)
  • Job Outlook: Expected to grow 20% from 2018-2028, much faster than average (US Bureau of Labor Statistics)
  • Work Environment: Office or remote

What is an Actuary?

By definition, actuaries quantify risk and determine a monetary value for contingency based events. This means assigning value to events that may or may not occur. An insurance company needs to determine the likelihood for anyone of their policyholders that they will make an insurance claim.

We recommend to thoroughly research and have a good grasp on what the actuarial field involves so you have realistic expectations. In addition to this article, Be an Actuary is a resource that provides a high-level introduction for people with a peaked interest in the actuarial profession and includes information on what a typical day would look like. 

A person performing actuarial work

Transferable Skills from Teacher to Actuary 

We have often heard others say that actuaries need to be great with math and statistics. While this is true, there are many other skills or attributes that can lead to success. Anyone can learn tangible, hard skills, such as a programming language or how to use excel, but soft skills that transfer from the teaching to the actuarial field can improve your chances of success. 

Self-directed

Teachers are responsible for planning all of their lessons and managing their classroom. They are self-directed and self-motivated in all that they do. You can transform this into initiative where you are thinking about the next steps on any given project. Self-motivated individuals that take initiative are highly valued in any profession!

Ability to learn

The amount of content that teachers cover in a school year means that they are always learning or re-learning topics before they teach to students. Teachers have a unique understanding of the learning process. Having valuable knowledge on efficiently learning new skills will serve you well in an industry that is rapidly evolving with technology. The ability and willingness to learn are also crucial to passing the actuarial exams!

Communication

Teachers communicate content to their students in a variety of ways to appeal to different learning styles. They also have to be tactful in communication with parents and administrators. An integral part of an actuaries job is communicating results to other teams that don’t have the same domain knowledge. Teachers can excel here by planning the best way they can present their work.

Detail-oriented 

Teachers plan their lessons and must be aware of details including the needs of individual students, the method of delivery of content during a lesson, or the use of an intelligent learning-device to help their students remember a specific concept. An actuary will have to take note of small details in a project, such as choosing how to visualize data or spending more time to error-check work. These small details can make all the difference in the end.

Pay

A move into the actuarial field may initially be a lateral move in pay grade or an improvement depending on how many years experience you have as a teacher. The potential for salary growth as an actuary will outweigh any small decreases in pay. Teachers are limited on their “horizontal” salary growth at a certain point (increasing compensation by earning a Master’s or PhD). Actuaries have .

If you want to learn more about the potential pay for actuaries check out the DW Simpson Salary Survey

Who Hires Actuaries?

Actuaries are typically hired by insurance companies or the government. Actuarial work can be broken down into two major categories; life and non-life. In life, actuaries work with products in health insurance, retirement, and life insurance. Non-life is considered insurance of inanimate objects such as car insurance. An actuary can start in one field and switch once they have a year or two of experience.

Types of Actuarial Work

An actuary will need to decide to work in consulting or directly for an insurance company. Generally in consulting the hours are longer when a deadline for a project is approaching. Some companies have programs that allow their actuaries to use some company time to prepare for exams (study hours). Study hours are less prevalent and flexible in the world of consulting actuaries. The work of consultants may also vary more than that of an actuary at an insurance company because the work is dependent upon the client you are assigned to. The trade-off is that, on average, actuaries that work in consulting earn more money than those who work directly for insurance companies.

Woman studying mathematics to change careers from a teacher to actuary.

The Education Required

A bachelor’s degree in a related field is the minimum requirement for most employers. Any STEM degree can be considered. Regardless of your degree, you should have a familiarity with mathematics and statistics. Don’t be intimidated by the mathematical requirements. Anyone can learn the topics required to pass the exams and the exam content is certainly more complicated than anything you will do on the job!

While a Master’s or Ph.D. is not required, it is always a bonus. I had started my masters while still teaching and chose to finish before applying to actuarial jobs. If you don’t already have a Master’s, I would recommend focusing your attention on exams or learning technical skills, such as Microsoft Excel, SQL for databases, or Python/R for data analysis. 

Credentialing

All actuaries need to get their credentials for them to perform certain duties. Regulations often require actuaries who either have their Associates or Fellowship with one of the actuarial societies. Credentialing is what you will be working towards on your exam journey. The main two societies in the US are the Society of Actuaries (SOA) and the Casualty Actuarial Society (CAS). If you opt to work in Life then you will need credentials with the SOA, if you work in Non-Life then your exam path will be through CAS. 

Introductory Exams

It is advised you pass the first two exams as soon as possible. These exams are Probability (P/1) and Financial Mathematics (FM/2). Both actuarial societies accept these introductory exams. Having two exams to put on your resume is vital as you will likely be up against other candidates who have also passed exams. Completing two exams lets an employer know you are committed and serious about the actuarial field.

Exams are both a time and money commitment unless you are lucky enough to land a job that will pay for your exam fees and offer study hours. You can register for these introductory exams and find more information regarding the exam syllabus and dates on the SOA website. To help you prepare for the exams I recommend looking into Coaching Actuaries.

Validation by Education Experience

The last requirement you will need to garner credentials is Validation by Education Experience (VEE). Often students can waive this because they have college credit for a certain course that links to the VEEs. If you did not take college classes that link to one of the three VEE topics, then you can take courses with companies that specialize in creating study materials for actuaries. You can read more about VEEs on the SOA website.

Technical Skills

All actuaries are expected to be proficient in technical skills such as Excel or Visual Basic for Applications. You should know how to find your way around the functions in Excel and comfortable with using formulas on a spreadsheet. I highly recommend looking at the Technical Skills Course at The Infinite Actuary (TIA). This course also covers some other technical skills outside of Excel which will be useful to you making it worth the price tag. Try turning any skills you learn into a small project that you can use to demonstrate your knowledge, projects are also great talking points in an interview!

Structured Querying Language

Experience with Structured Querying Language (SQL) is also considered a must-have. Many companies use SQL on databases to extract their data for analysis. Websites like TIA also offer courses that cover SQL, but it is possible to get your feet wet with SQL and avoid the hefty price tag. A free page at SQLcourse provides such an introduction and you can get some more practice with it at websites like Codewars.

Python and R

The final skill I’m going to suggest is not considered basic or required, but it will help you get ahead of the game. Python and R are both programming languages that can be used for data analysis and building predictive models. More companies are utilizing predictive analytics in Python or R and proficiency in these can help you stand out. As stated above it is possible to find an actuarial specific course on TIA, however it is possible to learn without the price tag. There is an amazing collection of tools and resources created by the RStudio team. I suggest the book R for Data Science if you already have any background with programming languages. 

If you have absolutely no experience with programming languages but are interested to learn, Learn to Program is a video series that teaches the basics of programming in Python.

Former teacher performing actuarial work

Tailor your Resume from Teaching to Actuarial Field

Firstly, you’ll want to list your exams. Quite often, resumes are filtered down by the number of exams an applicant has passed. I had my two exams (P/1 and FM/2) listed at the very top of my resume, above my experience. 

When listing your job experience you need to put a spin on any prior work experience or schooling (see transferable teaching skills above). You’ll want to avoid mentioning “differentiated instruction” or any other educational buzz-words. Focus on presenting your teaching skills in a way that would be more applicable in a corporate setting.

In addition to listing your exams and previous teaching experience, detail your technical abilities. This is somewhere that you can stand out, especially if you’ve learned a highly sought after skill such as R programming. Keep your resume to one page for entry level jobs. If you have space left over consider having a section that lists hobbies, interests, or anything that is more personable.

Cover Letters

Cover letters provide a great opportunity to tell a potential employer about why you are looking to switch careers. It is important to know what actuarial area the position is in (Health, Life, Retirement, Casualty, etc.) to show interviewers that you have done your research. If you are applying for an entry-level position it is acceptable to not be knowledgeable about what is expected, that is why it is entry-level! If you can demonstrate any knowledge of job functions it will be considered a bonus.

Potential Downfalls of Quitting Teaching to Become an Actuary

Many will find the work of entry-level positions repetitive and not engaging. The technology in the industry is changing drastically which leaves room for self-directed learning and growth. Many people have difficulty motivating themselves to learn and progress while at work, let alone during their personal time, which can lead to being stuck in a rut. 

Another factor that dissuades individuals from actuary careers is the demanding path to becoming credentialed. There is the gauntlet of exams (around seven to nine exams that last for three to five hours) that is required before receiving an Associateship with an actuarial society. Each test requires approximately 100 hours of preparation for every exam hour. For example, a three-hour exam can take up to 300 hours of preparation. Everyone is different and may not require anywhere near that amount of time; it can depend on how strong your mathematical background is.

Careers Similar to Actuarial Science

Careers that are closely tied to the actuarial field include Data Analyst or Data Scientist. Insurance companies sometimes hire Data Analysts to perform similar projects to actuaries or work in tandem with actuarial teams. These career tracks also pay well, however merit increases in salary are not as concrete. This is largely due to entry-level actuaries’ raises being tied to success on an exam track.

Links

I know this is a lot of information, but we had so much to say about the career change that inspired this website! Please reach out with any questions and stay tuned for our interview with Luke! He will give further insight into his transition from a math teacher to an actuarial professional.

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