Because data science is such a broad field with so many areas of specialization, whereas actuaries are generally geared toward insurance-related jobs, a big question today is if data science will replace actuaries. The answer may vary depending on which professional is asked. Data science and actuary careers have many similarities, yet they’re two very distinct fields. It’s been said many times that while data scientists can do actuary work, actuaries are not trained to work in data science. Learn the attributes of both here.
Related resource: 30 Best Master’s in Data Science Online Degree Programs
What is Data Science?
Data science is an interdisciplinary field that combines advanced analysis, statistics, machine learning and computer programming. Data science deals with small data, big data and all kinds of data. Unlike actuaries, who deal most with numbers and statistics and the insurance industry, data scientists work with all kinds of data, including numbers, text, pictures, surveys and numerous other types. Most data scientists have master’s degrees while some advance their education and pursue doctoral degrees.
What is an Actuary
An actuary is a trained professional who analyzes financial data to determine risks, probabilities, and uncertainty. Through the use of statistics, mathematics and financial theories, actuaries are able to assess and predict the risk of potential circumstances or events. Actuaries may work in other industries but are most commonly found working for insurance companies. They create tables, reports, and charts to explain proposals and calculations.
Actuaries design and test insurance policies using various types of data to determine risk factors so they know what premiums should be charged for minimum risk and maximum profitability. Although an individual can become an actuary with a bachelor’s degree, the U.S. Bureau of Labor Statistics (BLS) states that it can take from four to seven years to earn the associate-level certification and another two to three years to earn the status of fellowship.
Can Data Science Replace Actuaries?
Data scientists and actuaries are as different as they are alike. They have similar skill sets, educational requirement, and responsibilities. They both analyze data to make educated future predictions and use a lot of the same techniques while doing so. Both actuaries and data scientists crave data because the more data they get, the better they can be at their prospective jobs.
Their responsibilities might be similar, but their actual duties are different. Actuaries are found mostly working with insurance companies. Their duties include estimating costs of losses, predicting the likelihood of loss and advising as to what should be charged to cover the loss and be profitable. Data scientists, on the other hand, can be found in almost any industry and will be given much harder problems to solve. In addition to solving the problem or answering the question, they also have to design the question. Based on these facts and the importance of both. there is little chance that data science will replace actuaries
Career Outlook for Both
The career outlook is very good for both data scientists and actuaries. A job growth of 22 percent is predicted for actuaries during the 2016-2026 decade, according to the BLS. IBM predicted that demand for data scientists would jump to 28 percent by 2020, according to a Forbes 2017 report. Salaries for data scientists ranged from $60,000 to more than $140,000 while data scientist wages ranged from $50,240 to $145,921, according to a PayScale July 2018 report.
Although we tend to think of data science as being a new field, it’s actually been around since actuarial science was first used in the 1980s. While the careers, duties, and responsibilities of actuaries and data scientists tend to intertwine, it’s highly unlikely that data science will replace actuaries because they both have their importance.