“An actuary, an underwriter, and an insurance salesperson are riding in a car. The salesperson has his foot on the gas, the underwriter has his foot on the brake, and the actuary is looking out the back window telling them where to go.”
Actuaries, long the butt of jokes for their thought processes and (lack of?) personalities, get the last laugh in a new survey getting a lot of national coverage.
Actuarial science was ranked as the “most valuable college major,” according to the Bankrate.com study of 162 degrees, released on Sept. 10.
Perhaps the insurance industry will get a talent boost down the road from this, although it likely would have little impact on an expanding talent gap due to a shrinking agent workforce. Still, it may well draw an increasing number of young people to an industry they may otherwise never have considered.
To determine the most valuable majors, Bankrate looked at the most recent data from the U.S. Census Bureau American Community Survey. The 2016 data was obtained through the IPUMS-USA, University of Minnesota research program.
For the study, Bankrate used weighted data to analyze what bachelor’s degree holders who were either employed or unemployed entered as their first major and income for the past 12 months. Bankrate analyzed majors with labor forces of at least 15,000 people, and also looked at how many college graduates obtained a higher degree such as a master’s degree or doctoral degree.
Actuarial science rose to the top because degree holders earned more on average ($108,658) than their peers and a faced lower unemployment (2.3%). Plus, only 22% of actuarial science majors held a master’s degree or doctoral degree, suggesting the majority of graduates did not need to take on more schooling — which often comes with more debt — to find employment.
Actuaries are often the people to thank — or blame — for the premiums set by insurance companies. Actuarial analysts help insurance companies make sure they are pricing their products accurately and profitably, setting aside enough money to pay out potential claims and helping them sell new products or enter new markets.
“Actuarial science is great for people who are strong in math or computers — anything analytical — that want to apply it in a business setting,” says Sue Vagts, director of the Actuarial Science Program at the University of Nebraska-Lincoln.
“In business, you have to have good communication skills because it doesn’t matter how many problems you can solve if you can’t convert that to a business application or explain in a way people can understand,” Vagts says.
Business, science and math degrees claimed the first 10 spots in Bankrate’s study. On average, the sample of 162 majors had an income of $72,616 and an unemployment rate of 2.9%. Almost 4 in 10 (37%) bachelor’s degree holders completed an advanced degree, according to the study.
Petroleum engineering grads had the most lucrative average salary in the survey, at $153,743, but the major only placed #18 on the list because of an excessively high 7.9% unemployment rate.
Miscellaneous fine arts — basically any fine arts degree that doesn’t fit cleanly in the art history, music, drama and theater or other major buckets — was dead last in Bankrate’s study of most valuable majors. On average, degree holders had a lower income ($40,855) and a higher unemployment rate (9.1%).
Bankrate’s Top 10 Most Valuable College Majors
1-Actuarial Science (avg. income: $108,658; unemployment rate 2.3%; score 156.1)
2-Zoology ($111,889; 1.4%; 152.2)
3-Nuclear engineering ($108,591; 1.8%; 151.5)
4-Health & medical preparatory programs ($130,308; 2.3%; 147.4)
5-Applied mathematics ($105,679; 2%; 147.0)
6-Pharmacy, pharmaceutical sciences & admin ($103,350; 1.8%; 145.0)
7-Molecular biology ($105,849; 2.1%; 143.0)
8-Mechanical engineering ($101,590; 2.4%; 142.9)
9-Civil engineering ($96,405; 2.2%; 141.4)
9-Finance ($100,448; 2.7%; 141.4)
Wow, did not see that coming.