An actuary is a business professional who deals with the financial

impact of risk and uncertainty. Actuaries provide assessments of

financial security systems, with a focus on their complexity, their
mathematics, and their mechanisms (Trowbridge 1989, p. 7). The
name of the corresponding profession is actuarial science.
Actuaries mathematically evaluate the probability of events and
quantify the contingent outcomes in order to minimize the impacts
of financial losses associated with uncertain undesirable events.
Since many events, such as death, cannot be avoided, it is helpful to
take measures to minimize their financial impact when they occur.
These risks can affect both sides of the balance sheet, and require
asset management, liability management, and valuation skills.
Analytical skills, business knowledge, and understanding of human
behavior and the vagaries of information systems are required to
design and manage programs that control risk (BeAnActuary
2005a).
The profession has consistently ranked as one of the most desirable
in various studies over the years. In 2006, a study by U.S. News &
World Report included actuaries among the 25 Best Professions that
it expects will be in great demand in the future (Nemko 2006). A
study published by job search website CareerCast ranked actuary
relative to other jobs in the United States as number 1 in 2010
(Needleman 2010), number 2 in 2012 (Thomas 2012), and number 1
in 2013 (Weber 2013). The study used five key criteria to rank jobs:
environment, income, employment outlook, physical demands, and
stress.
Credentialing and exams
Main articles: Actuarial credentialing and exams and
Category:Actuarial associations
Becoming a fully credentialed actuary requires passing a rigorous
series of professional examinations, usually taking several years in
total. In some countries, such as Denmark, most study takes place
in a university setting (Norberg 1990, p. 407). In others, such as the
U.S., most study takes place during employment through a series of
examinations (SOA 2012, CAS 2011). In the UK, and countries based
on its process, there is a hybrid university-exam structure (Institute
and Faculty of Actuaries 2011a).
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 (BeAnActuary 2005b). Also,
many companies which 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 (Sieger 1998).
Thus, thousands of hours of study time should be anticipated over

several years, assuming no failures (Feldblum 2001, p. 6). In

practice, as the historical passing percentages remain below 50%
for these exams, the "travel time" to credentialing is extended and
more study time is needed. This process resembles formal
schooling, so that actuaries who are sitting for exams are still called
"students" or "candidates" despite holding important positions with
substantial responsibilities.
Pass marks and pass ratesUnlike some other professions, the
actuarial profession is generally reluctant to specify the pass marks
for its examinations. This has led to speculation over the years that
the profession runs a quota system, perhaps (a) to limit the supply
of those who pass the exams and qualify in the profession or (b)
because a high fail rate might give the impression of difficulty and
high value to a qualification that is not easy to obtain. This concern
is confirmed by a former Chairman of the Board of Examiners of the
Institute and Faculty of Actuaries who made the following denial
(Muckart):
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.
Regarding this concern, the CAS has stated (CAS 2001):
The Board further affirms 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.