Actuary vs. underwriter job descriptions

Both actuary and underwriter roles typically involve risk management. The main difference is the scope of work for each position. Actuaries examine risks for entire industries or groups of people. For example, an actuary might calculate the risk of losing money if an insurance company issues a new policy.

Underwriters work with individuals. When someone applies for a loan or an insurance policy, an underwriter compares the applicant’s financial information against existing guidelines. One example is the use of underwriters in the mortgage industry. When someone applies for a mortgage, an underwriter uses their skills to determine the likelihood of loan default.

Actuary job duties and skills

Actuaries typically perform the following duties:

• Use statistical data to perform calculations
• Collaborate with accountants, economists and other financial professionals
• Create tables, models and other resources to explain their calculations
• Develop estimates of probability related to risk
• Summarize their findings in simple terms

Many actuaries work in the insurance industry, while others may assess pension fund risks. In this case, an actuary’s job description may include additional duties, such as helping employers create competitive benefits packages.

Statistical analysis, mathematical skills and attention to detail are generally important skills for actuaries.

Underwriter job duties and skills

An underwriter job description may include these duties:

• Collecting information from insurance or loan applicants
• Assessing risk levels
• Helping insurance agents in setting premiums
• Advising colleagues on whether to approve or deny applications
• Evaluating insurance claims

Underwriters typically review a variety of personal documents, such as medical records, credit reports, criminal histories and income statements. They may also guide customers through the application process.

While underwriters don’t usually perform statistical analysis, analytical skills and attention to detail are still important. Many underwriters work directly with customers, making relationship management a valuable skill.

Education needed for actuary vs. underwriter positions

When comparing the needs for underwriter vs. actuaries, your hiring team should consider the education and training required. Actuaries perform complex calculations, so it’s common for employers to require a bachelor’s degree in statistics, mathematics or actuarial science.

For underwriters, some employers require a bachelor’s degree in finance, business or a related field, while others provide on-the-job training, allowing new underwriters to learn from experienced professionals.

Professional certifications

Requiring a professional certification can help ensure a candidate has the skills required for your job opening. Some certifications focus on specific industries, providing more insight into a candidate’s knowledge and skills.

An underwriter may hold one of these professional certifications:

• Chartered Property Casualty Underwriter (CPCU)
• Associate in Commercial Underwriting (AU)
• Registered Professional Liability Underwriter (RPLU)
• Certified Underwriter
• Chartered Life Underwriter (CLU)

Common certifications for actuaries include:

• Enrolled Actuary
• Certified Actuarial Analyst (CAA)
• Associate of the Society of Actuaries (ASA)
• Associate of the Casualty Actuarial Society (ACAS)
• Fellow of the Casualty Actuarial Society (FCAS)
• Fellow of the Society of Actuaries (FSA)

Salary data for actuaries and underwriters

When comparing underwriter vs. actuary jobs, consider the salary differences.

According to Indeed Salaries, the average annual salary for an actuary in the United States is $129,242. The average salary for an underwriter is $83,073 per year.

Salaries for each job may vary based on industry, location and the candidate’s work experience. You may offer a lower starting salary if your company has a comprehensive benefits package.

Does your company need an actuary or an underwriter?

If you need someone to review loan or insurance applications, an underwriter may be the best option. A professional in this role can also help your team set insurance premiums or claims limits.

You may need an actuary if you’re looking for someone to assess risk for a large group of people, including pension plan participants and health insurance group members. Hiring an actuary is also helpful if you need someone to summarize risk estimates and present the data to other employees.

Frequently asked questions about actuaries and underwriters

Who do actuaries vs. underwriters report to?

Depending on the structure of your organization, actuaries may report to the chief risk officer (CRO), chief actuary, or chief financial officer (CFO). Any professional in a senior position associated with financial reporting and risk management may have some oversight over actuaries.

Underwriters typically report to another underwriter in a more managerial role or to a lending manager.

Do actuaries and underwriters ever work together?

While these two positions have separate responsibilities, their end goal can overlap. For example, underwriters may rely on an actuary’s findings when reviewing applications.

What soft skills can benefit both roles?

Because both actuary and underwriter roles involve risk management, their applicable soft skills are similar. Professionals in either position can likely benefit from skills such as analytical thinking, decision-making, problem solving and attention to detail.