If you’re an engineer looking to make a career change then becoming an actuary is definitely a career to consider.
But first off, can an engineer even become an actuary? Yes! With a bachelors degree and strong willingness to put in the effort needed, an engineer can become an actuary.
The path to becoming one isn’t simple though. There are many things to consider before getting started.
Requirements for an Engineer to Become an Actuary
In order for you to start working as an actuary, you’ll need a bachelor’s degree, and you’ll need to have 2-3 actuarial exams passed. Although these two things aren’t technically required to work as an actuary, they’re highly recommended and you’d be unlikely to get hired without them.
Having relevant experience will help significantly in your job search too.
Fortunately, the specialization of your degree isn’t very important. You could become an actuary with a Bachelor’s degree in engineering, computer science, math, finance, or any major — even art!
Some degrees, like one in math or statistics, for example, will best prepare you for the type of math you’ll see on actuarial exams. This post goes into detail about all the best majors for an aspiring actuary.
Even if your degree isn’t mentioned in that post, I still don’t recommend that you go back to school to get a more relevant degree. It would be quicker and cheaper for you to learn the math that you need (like calculus) through free websites like YouTube and Khan Academy.
The second requirement that I mentioned was to pass 2-3 actuarial exams. Actuarial exams are standardized tests that anyone looking to become a qualified actuary needs to pass.
There are 10 actuarial exams that you’d need to pass in total to be fully qualified. If you’re interested in knowing more about them, you should read this post where I go in depth on each exam. Fortunately, you can work in entry-level actuarial positions (and some higher positions) while you’re still in the process of passing all the exams.
The exams will test your mathematical abilities in areas like probability, calculus and finance. They’re quite difficult for most people and usually take hundreds of hours to study for.
If you’d like to learn all the details about exactly how actuarial exams work, this post would be the best one to read. It’s important to have a good understanding of that before you jump into them.
The entry-level actuarial market is fairly competitive right now (in 2019). Many students are graduating from college or university with 2-3 exams passed and related internship experience.
So, in order to give yourself the best chance of getting an actuarial job, it would be best to try to get some related experience while you’re writing your first few exams.
Related experience could be almost anything involving insurance (especially underwriting or anything where you’re learning all of the ins-and-outs of insurance). Jobs in finance, investments, risk analysis or data analysis would also be great.
Your engineering job and education may have given you some skills and experience that can translate to an actuarial career too, such as problem solving, project management and process improvement. It’s important to highlight those types of skills on your resume when you start applying for actuarial jobs.
Is switching from an engineer to an actuary worth it?
The reason that most engineers consider switching to an actuarial career has to do with career satisfaction. There are many aspects of the job that you may not be able to get with an engineering job.
For some people, the engineering career they thought they’d enjoy didn’t turn out to be as interesting and engaging as they had imagined. They want something different!
Becoming an actuary presents an opportunity to use your math skills on a day-to-day basis and it will constantly challenge you to achieve the next level of success.
An actuarial career is great for someone that is goal-oriented and interested in statistics, probability, risk and insurance.
But before you make the switch to an actuarial career, it’s important to consider whether the career change is really necessary in order to achieve more job satisfaction. There may be other engineering jobs available where the work is more aligned with what you want in your career. And, on the other hand, a career as an actuary won’t necessarily meet those needs either – there are many different types of actuarial jobs.
For example, are you stuck in a job that requires you to do a lot of routine-type work? There are many entry-level actuarial positions that are the same way (valuation positions come to mine). So, by switching to a career as an actuary you may end up getting bored with that too.
However, as you gain more experience and pass more actuarial exams you should be able to move out of those positions into positions that require more problem solving and a business-focused/analytical mindset. Fortunately, an actuarial career provides lots of opportunity for advancement.
Opportunities for Advancement
From what I’ve heard, it’s often fairly difficult to move up the corporate ladder as an engineer. For someone that is career oriented and wants to continually progress in their career, an engineering job may have you feeling a bit stagnant and wondering “what’s next?”.
In this situation, switching to an actuarial position may be a great solution for you. With 10 actuarial exams to pass and the potential to move into upper management positions (such as CEO, CFO, CRO, etc), you’ll never feel like you’ve reached the top. There will always be an opportunity on the horizon.
It’s very common for these types of upper management positions in insurance companies to be filled by actuaries. Through experience and exams, actuaries develop an excellent understanding of insurance, as well as general business and financial concepts. This knowledge, along with their problem solving skills, make them ideal candidates.
Quality of Life
One of the aspects of an actuarial career that makes it attractive is the low stress and great work-life balance. If your engineering career has you constantly stressed out and working long hours, then an actuarial career may be your dream come true.
Fortunately, most actuarial positions don’t require that you work long hours in order to meet tight deadlines. Consulting positions are the only exception to this, because clients often want their work done as quickly as possible. But, your typical job in an insurance company will likely allow you to have a fairly flexible work schedule, and possibly even work at home!
But, it’s important to note that studying for actuarial exams tends to take up many hours of free time. It can take hundreds of hours to study for just one exam (there are 10 in total), so it can feel like it takes over your life at times.
Employers do often allow for some paid study time, but it’s rarely enough to do all the studying necessary. So, during the first 5-7 years of your actuarial career you probably won’t get to experience the work-life balance that this career is known for.
Potential Concerns about Becoming an Actuary
Transitioning from an engineer to an actuary isn’t going to be quick and easy. It’ll require a lot of hard work and dedication. Here are some things to consider before you make your decision.
Studying and Working
In order to be considered for actuarial jobs, you’ll have to pass at least 1-2 exams. That means that you’ll have to find time to study for your exams outside of work hours.
For someone that has a family and other obligations after work, it can be extremely difficult to find the time! Most exam candidates spend hundreds of hours studying for each exam, so it becomes quite time consuming.
If you’ve already started your engineering career and are now interested in becoming an actuary, you may be a bit concerned that your math skills aren’t up to par for actuarial exams anymore.
Fortunately, as an engineer, you would have had to take math courses (like differential equations) that are beyond the level of math that you need for actuarial exams. The exams really only require math at a level of Calculus 3.
That means you’ll need to know how to integrate and differentiate multi-variate distributions.
Fortunately there are websites, like Khan Academy and YouTube (link to Professor Leonard’s videos), that are great for refreshing your calculus and algebra skills. You should have a pretty good idea of limits, integration, differentiation and series.
Another common concern for engineers that are considering becoming an actuary is their age. Oftentimes, they’re several years into their career and are just now finding out about the actuarial career path.
Fortunately, this isn’t something that should deter you from dedicating yourself to the career. Many people have successfully started their actuarial career at age 25, 30, 40, and some even at 50.
Sure, it may be slightly harder for you to break into the entry-level job market, but your maturity and past experience may actually be seen as beneficial to actuarial employers.
How to Get Started
This post goes into much more detail about the steps to becoming an actuary, but I’ll go through the first few steps here in this post.
If you already have a Bachelor’s degree, that’s great! An employer is very unlikely to hire anyone into an actuarial position without one. But, if you don’t have one, that’s going to be your first step.
The next step is to study for and pass your first actuarial exam. I recommend starting with Exam P (Probability Exam) or Exam FM (Financial Mathematics Exam) first. Most people find Exam FM to be the easier of the two since it doesn’t require as much calculus knowledge as Exam P.
Before starting your studying for either of these exams, a review on calculus and algebra (through Khan Academy) might be a good idea!
For each actuarial exam, there are study materials that you can purchase. The study materials teach you all the concepts that you’ll need to know for the exam.
Below I’ve linked to my study material recommendations for each of the first two exams. I highly recommend that you study for only one exam at a time.
If you feel that studying for your first exam is a bit intimidating, I also offer the Study Strategy Program where I show you step-by-step how to prepare for your first actuarial exam.
Can I become an actuary with an engineering degree? Yes you can if it’s a bachelor’s degree. Any bachelor’s degree is sufficient for becoming an actuary.
Do actuaries make more than engineers? Generally speaking, actuaries make more than engineers, especially as experience in each of the corresponding fields grows.