The insurance and actuarial professions often overlap, and if you are interested in one career then the chances are you will be interested in the other. However, which one is the best for you?
In this article we compare the two on a range of things including entry requirements, qualifications and salaries so you can decide which career is best for you.
Insurance vs. Actuarial Industry; What’s the difference?
Firstly, what is the difference between the two professions?
The insurance industry is extremely broad and covers a wide range of areas. From the everyday insurance such as travel, car and house insurance, to more niche insurance for alien abductions. There is also commercial insurance for businesses to keep them covered after an unexpected event.
With a broad industry comes a broad range of opportunities and depending on your strengths you could find yourself working in a range of roles including;
- Loss Adjusting
- Risk Managing
- Claims Managing
The actuarial profession, however, is a more niche, specialised area of insurance. Actuaries calculate the probability of different events and their potential financial impact. This could range from a recession to an earthquake, for example, or even something as simple as a pension plan or investment decision.
Actuaries analyse past and present data to create statistical information that allows them to predict and measure emerging risks. Though typically found in the insurance profession, actuaries work in a range of industries including;
- Finance and investment
- Risk management
- Pensions and benefits
Insurance vs. Actuarial Profession; Entry Requirements
One of the key differences between the two professions is the entry requirements.
What qualifications do I need to work in insurance?
Most areas of insurance do not require a degree, though a degree and a subsequent graduate scheme will give you a good boost into the profession. If you are still at school, then there are plenty of insurance school leaver schemes available to you. This will allow you to earn on the job and get your foot on the insurance career ladder.
If you do want to apply for a graduate scheme, then most employers will require a 2.2 degree or above in any subject. That said, degrees in business, management or maths will be advantageous for some routes in the insurance industry. Once you have a secured a place on a graduate scheme then these typically last between 2-3 years where you will study towards a further ACII qualification.
If you are looking to go into the profession straight from school on a school leaver scheme, then employers will usually look for a minimum requirement of UCAS points, most likely the equivalent of BBB at A-Level. They may also require a B in maths at GCSE level, but this varies between employers. Apprenticeships and further qualification may take around 3 years and will give you the opportunity to learn about the different areas of insurance.
What qualifications do I need to become an actuary?
To join the actuarial profession you need a high level of academic attainment, particularly in maths. There are a few actuarial school leaver schemes, some of which require an A or above at A-Level in Maths. As a school leaver you will work towards your Certified Actuarial Analyst, with the option of studying towards higher qualifications afterwards.
To secure a place on an actuarial graduate scheme then you will need at least a 2.1 or above in a numerical subject, such as maths, statistics or economics. From there, you will spend around 3 years on an actuarial graduate scheme working towards becoming a fully qualified actuary.
Insurance vs. Actuarial Profession; Career Progression
There’s nothing like living in the moment, but it also doesn’t help to plan ahead. And if you are serious about your career then you will want to know what your career progression could look like in these two industries.
Where can an insurance career take me?
If you start off on an insurance graduate scheme then you may find that you spend time in different areas of the business and different areas of insurance. This will give you a good idea of where your strengths and interests lie, allowing you to specialise at a later date.
You may find yourself moving into a certain type of insurance, such as working in commercial insurance. Or you may find your role becomes more specialist, for example becoming a catastrophe modeller or moving into reinsurance.
Once they have gained enough experience, some insurance professionals move into broking or sales, utilising their vast knowledge and experience of the insurance industry.
Where can an actuarial career take me?
An actuarial career is a more linear one, as there are fewer routes you can take once you qualify. However, fewer routes does not mean this profession is less interesting or there is less room for development.
Once you qualify as an actuary your career can move swiftly, and you could take on a managerial position quite early on in your career. You may start out in a particular part of the insurance sector, such as life insurance, but change specialisms as your career progresses.
Actuaries can also move out of the industry into another sector, and you can find actuaries in pensions, investment management and in healthcare. Some actuaries may move int banking or to more corporate roles.
Insurance vs. Actuarial Career; Salary
Money isn’t everything, but it is important. The good news is, both professions come with great financial reward, particularly as you move up the career ladder.
How much can I earn working in insurance?
As a graduate joining the insurance industry, you can look to earn anything between £24,000 and £30,000 depending on which area you move into and your employer. After your graduate role, you can earn upward of £38,000 to around £48,000 if you work in compliance. After ten years you could potentially see yourself earning over six figures.
How much can I earn as an actuary?
It is well known that actuaries are rewarded financially for their efforts. And, after years of exams, it’s well deserved. As a graduate you can see yourself earning upward of £28,000 depending on the employer. This rises to over £36,000 once you qualify. As you move up to a Manager position you can earn around £70,000. As your career progresses you could earn six figures, with Partners earning over £250,000.
Insurance vs. Actuarial Career; Which one is better?
So, which career is actually better? There is no right answer to this question. Each career requires different skillsets and is suited to different people. Both careers come with high financial reward, job satisfaction and career progression, whichever route you choose to go down.