2026 Guide
Actuarial Science: The Complete Guide
What actuarial science is, what you study, what actuaries actually do, how to earn the professional credentials, what the career pays, and how to get started.
What is actuarial science?
Actuarial science is the discipline that uses mathematics, statistics and financial theory to measure and manage risk, in particular the financial cost of uncertain future events. How long will a 40-year-old live? How many drivers in a city will have an accident next year? How much will a hurricane cost an insurer? Actuarial science turns questions like these into numbers that businesses and governments can plan around.
The professionals who practice it are called actuaries. Their work is behind the price of almost every insurance policy, the funding of pension plans, and the long-term forecasts for programs like Social Security and Medicare. In short, actuaries make sure the promises financial institutions make today can be kept decades from now.
Actuarial science sits at the intersection of several fields: probability and statistics to model uncertainty, financial mathematics to value money over time, and economics and business to understand the markets and regulations insurers operate in. Increasingly, it also draws on data science and programming.
A short history of actuarial science
Actuarial science is one of the oldest applied branches of mathematics. Its foundations were laid in the 17th and 18th centuries, as mathematicians worked out how to put a fair price on uncertain events:
- 1693: astronomer Edmond Halley publishes a life table built from the birth and death records of the city of Breslau, and uses it to price life annuities. It is widely regarded as the founding work of actuarial science.
- 1762: the Equitable Life Assurance Society is founded in London, building on James Dodson's work on pricing life insurance by age. It is considered the first life insurer run on scientific principles, and its chief officer was given the title "actuary".
- 1775: William Morgan becomes the Equitable's actuary. He carries out what's regarded as the first valuation of a life insurance company and is often called the first professional actuary.
- 1914 and 1949: the Casualty Actuarial Society and the Society of Actuaries, the two professional bodies that credential actuaries in North America today, are founded.
Since then the field has grown from life insurance into health care, pensions, property and casualty insurance, investments and enterprise risk management, with computers and data science transforming how the work is done.
What you study in actuarial science
An actuarial science education, whether in a degree program or through the professional exams, is built on six main areas:
- Random variables, distributions and expected values
- Statistical inference, estimation and hypothesis testing
- Regression and generalized linear models
- Interest theory and the time value of money
- Annuities, loans, bonds and cash flow valuation
- Duration, convexity and immunization
- Survival models and life tables
- Pricing life insurance and annuities
- Reserves (policy values) for long-term contracts
- How often claims happen (frequency) and how big they are (severity)
- Aggregate losses, deductibles, limits and reinsurance
- Credibility theory and ratemaking
- Predictive modeling and machine learning
- Excel, R, Python and SQL
- Communicating results to non-technical audiences
- Micro- and macroeconomics
- Corporate finance and financial markets
- Insurance accounting and regulation
The first two areas are tested on the first two professional exams: Exam P (Probability) and Exam FM (Financial Mathematics). Life contingencies and loss models come together on Exam FAM. Our guide to the SOA exams covers each one in detail.
What do actuaries do?
Actuaries build models that estimate the likelihood and cost of future events, then use those models to help organizations make decisions: how much to charge for a policy, how much money to set aside for future claims, or how to invest to meet long-term promises. A typical week mixes data analysis, modeling, and explaining results to managers, regulators or clients.
| Where actuaries work | What they do there |
|---|---|
| Life insurance and annuities | Price policies, set reserves and manage the long-term risks of products that pay out decades from now. |
| Health insurance | Set premiums for medical, dental and disability coverage, and forecast claim costs as health care changes. |
| Retirement and pensions | Value pension plans, decide how much employers need to contribute, and advise on retirement programs. |
| Property and casualty insurance | Price auto, home, business and workers' compensation insurance, and estimate what's owed on open claims. |
| Reinsurance | Model large and catastrophic risks, such as hurricanes and pandemics, for the insurers of insurance companies. |
| Consulting | Advise insurers, employers and governments on pricing, benefits, mergers and risk management. |
| Government | Project the finances of programs like Social Security and Medicare, and regulate insurance companies. |
| Banking, investments and tech | Apply actuarial modeling to enterprise risk management, investments, insurtech and data science. |
Studying actuarial science: degrees and programs
Most actuaries hold a bachelor's degree in actuarial science, mathematics, statistics, economics or finance. Many universities offer a dedicated actuarial science major, and a growing number offer master's degrees.
The Society of Actuaries keeps a public list of Universities and Colleges with Actuarial Programs (UCAP), grouped by how much of the actuarial curriculum each school covers. The top tier, Centers of Actuarial Excellence (CAE), recognizes schools that meet strict requirements on curriculum, faculty, research and graduate outcomes. Some programs also offer University Earned Credit, which lets students earn credit for certain exam topics through their coursework.
Actuarial science major or a related degree?
| Actuarial science major | Math, statistics or economics major | |
|---|---|---|
| Exam preparation | Courses line up with the early SOA and CAS exams, often with exam-focused review | You prepare for the exams largely on your own alongside your courses |
| VEE and exam credit | Many programs offer VEE credit, and some offer University Earned Credit for exam topics | Some economics, finance and statistics courses still count for VEE credit |
| Employer connections | Career fairs, actuarial clubs and alumni at insurers and consulting firms | You'll need to seek out actuarial employers and internships yourself |
| Flexibility | More specialized, so less room if you change direction | Broader, with more paths into data science, finance, research or teaching |
Either path works. Employers care most about exam progress, internships and analytical skills. If you choose a related major, add courses in probability, statistics, economics and finance, and start on the exams early.
Becoming an actuary: exams and credentials
A degree gets you hired as an actuarial analyst; professional exams make you an actuary. In North America, two organizations award actuarial credentials:
- The Society of Actuaries (SOA) covers life insurance, health insurance, retirement and investments, and awards the ASA (Associate) and FSA (Fellow).
- The Casualty Actuarial Society (CAS) covers property and casualty insurance and awards the ACAS (Associate) and FCAS (Fellow).
Both start with the same two exams, Exam P (Probability) and Exam FM (Financial Mathematics), so students can begin before choosing a path. SOA candidates then continue with Exam FAM (Fundamentals of Actuarial Mathematics). Outside North America, bodies such as the Institute and Faculty of Actuaries (UK) and the Canadian Institute of Actuaries run their own qualifications.
| Credential | Awarded by | Typical time from first exam |
|---|---|---|
| ASA (Associate) | Society of Actuaries | 4-7 years |
| FSA (Fellow) | Society of Actuaries | 6-10 years in total |
| ACAS (Associate) | Casualty Actuarial Society | 5-7 years |
| FCAS (Fellow) | Casualty Actuarial Society | 7-10 years in total |
Earning a credential takes years of study, usually while working full time, and most employers support their actuarial students with paid study time, exam fees and raises for each exam passed. For formats, fees, pass rates and the order to take the exams, see our complete guide to the SOA exams.
Skills you need for actuarial science
- Strong math. Calculus, probability and statistics are the foundation of everything actuaries do.
- Programming and data skills. Excel is everywhere, and R, Python and SQL are increasingly expected, even for entry-level roles.
- Business sense. Actuaries need to understand how insurance, investments and regulation work, not just the math behind them.
- Communication. The best models are useless if you can't explain them. Actuaries regularly present to executives, regulators and clients.
- Persistence. The professional exams take years. Steady, disciplined study habits matter as much as talent.
Actuarial careers: salary and job outlook
Actuary is consistently ranked among the best jobs in the U.S. In U.S. News & World Report's 2026 rankings it placed #5 in Best Technology Jobs, #7 in Best STEM Jobs and #11 of the 100 Best Jobs overall.
The U.S. Bureau of Labor Statistics reports a median actuary salary of $125,770 (May 2024). It projects employment to grow about 22% from 2024 to 2034, much faster than average, with roughly 2,400 openings a year. Pay rises steadily with exam progress:
| Career stage | Typical U.S. base salary |
|---|---|
| Entry-level analyst (0-2 exams) | $70,000-$90,000 |
| Actuarial analyst (3-5 exams) | $90,000-$125,000 |
| Associate (ASA / ACAS) | $120,000-$160,000 |
| Fellow (FSA / FCAS) | $170,000-$250,000+ |
| Chief actuary / executive | $300,000+ |
Approximate ranges compiled from public salary surveys. Actual pay varies by location, employer, practice area and experience.
Actuarial science and AI
Artificial intelligence is changing how actuaries work, but it's making the role more valuable rather than replacing it. Machine learning is now a standard tool for pricing and claims analysis, and AI assistants speed up coding and data preparation. That frees actuaries to spend more time on what can't be automated: judging which assumptions are reasonable, meeting regulatory requirements, and taking professional responsibility for the numbers.
The professional bodies are adapting too. The SOA's associateship now includes predictive analytics exams, and actuaries who combine traditional actuarial skills with data science are in especially high demand.
How to get started in actuarial science
- Build the math foundation. Take calculus (through multivariable), probability, statistics and linear algebra. Add economics and finance courses for VEE credit.
- Pass your first exam in college. Most students start with Exam P or Exam FM. One or two passed exams is the strongest signal on an actuarial resume.
- Learn the tools. Get comfortable with Excel, and pick up R or Python and some SQL.
- Get an internship. Most actuarial employers hire full-time analysts from their intern classes. Apply early: recruiting often starts a year ahead.
- Join an actuarial club. University clubs connect students with employers, study groups and career fairs.
- Choose SOA or CAS. After an internship you'll know whether life and health or property and casualty work suits you best.
Actuarial science FAQ
What is actuarial science?
Actuarial science is the discipline that uses mathematics, statistics and financial theory to measure and manage risk, especially the financial cost of uncertain future events like deaths, illnesses, accidents and natural disasters. It is the foundation of insurance, pensions and much of risk management.
Is actuarial science a good major?
For students who enjoy math and want a well-paid, stable career, yes. An actuarial science degree lines up closely with the early professional exams and connects students with actuarial employers. Majors in math, statistics or economics can also lead to actuarial careers, and keep more options open.
Is actuarial science hard?
It is demanding. The coursework is heavy in calculus, probability and statistics, and earning a credential means passing a long series of professional exams with pass rates often around 40-60%. Most actuaries spend years studying for exams while working full time.
What's the difference between actuarial science and statistics?
Statistics is the broad science of collecting and analyzing data. Actuarial science applies statistics, together with probability, financial mathematics and economics, to one specific job: putting a price on risk, mostly in insurance and pensions.
Do you need an actuarial science degree to become an actuary?
No. Many actuaries studied math, statistics, economics, finance or engineering. What employers look for is exam progress (usually Exam P and Exam FM), strong analytical and computer skills, and an internship.
How long does it take to become an actuary?
Most people start as entry-level actuarial analysts right after a bachelor's degree. Becoming a fully credentialed actuary takes longer: typically 4-7 years to reach associateship (ASA or ACAS) and 6-10 years for fellowship (FSA or FCAS).
How much do actuaries make?
The U.S. Bureau of Labor Statistics reports a median actuary salary of $125,770 (May 2024). Entry-level analysts typically start around $70,000-$90,000, and fellows commonly earn $170,000-$250,000 or more.
Will AI replace actuaries?
Unlikely in the foreseeable future. AI is automating routine data work, but actuaries are accountable for judgments about risk, regulation and long-term financial promises. The BLS projects actuary employment to grow about 22% from 2024 to 2034, much faster than average.
Start preparing for the actuarial exams
Actuarial Exams Tutor has a free study manual and formula sheet for each of the first SOA exams, plus an AI tutor that answers your questions from the textbooks.
actuarialexams.co is run by Actuarial Exams Tutor and is not affiliated with, endorsed by, or sponsored by the Society of Actuaries or the Casualty Actuarial Society.