Hire an Actuary: A Practical Guide for Organizations That Need Actuarial Expertise

If your organization retains risk, manages benefit plans, faces regulatory actuarial requirements, or needs to quantify uncertain financial outcomes, you probably need an actuary. The challenge is knowing where to start.

This guide is written for risk managers, CFOs, HR directors, city finance officers, attorneys, benefits brokers, plan administrators, and business owners who need actuarial expertise they don’t have in-house. From tracking actuarial consulting patterns across the industry and reviewing how dozens of firms serve their clients, we have organized this resource around the real situations that bring organizations to the consulting actuarial market for the first time, or that prompt them to find a new actuarial partner.

The consulting actuarial market is broader than most people realize. Actuaries serve a surprisingly wide range of organizations beyond large insurance companies. If any of the situations below sound familiar, read on.

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Do I Need an Actuary? Common Situations by Organization Type

The easiest way to determine whether you need an actuary is to start with who you are and what triggered the question.

Self-Insured Employers (Workers’ Compensation)

If your company or public entity self-insures its workers’ compensation program, your state almost certainly requires an annual actuarial reserve study. These studies estimate your organization’s total outstanding workers’ compensation liabilities, including claims that have occurred but have not yet been reported (known in the industry as “IBNR,” or incurred but not reported). The actuarial study determines the ultimate financial exposure of your self-insurance program.

The scope of this market is substantial. California alone has more than 7,000 active self-insured employers as of January 2026, according to the state’s Office of Self-Insurance Plans (OSIP). Nationally, the Self-Insurance Institute of America estimates that over 6,000 corporations and their subsidiaries operate self-insured workers’ compensation programs, with many more participating through group self-insured funds. States including New York, Texas, Florida, and South Carolina maintain their own regulatory frameworks, each requiring actuarial reporting and security deposits tied to actuarially determined liabilities.

What the actuary does: Loss reserve analysis, IBNR projections, loss development factor calculations, collateral negotiations with excess carriers, experience modification projections, and ratemaking for group self-insured funds.

Who typically hires: Risk managers, CFOs, HR directors at mid-to-large employers; county and municipal risk departments; trade associations operating group self-insured funds.

Why it matters: Without an adequate actuarial reserve study, your organization risks posting insufficient collateral with the state, facing regulatory sanctions, or discovering unexpected liabilities during financial audits. From reviewing how self-insured employers navigate this process, organizations that treat the annual actuarial study as a compliance exercise rather than a risk management tool tend to miss opportunities to reduce costs through better claims management and excess insurance structuring.

Credential to look for: FCAS or ACAS (Casualty Actuarial Society), with MAAA designation.

Employers with Self-Funded Health Plans

Self-funding has become the dominant model for employer-sponsored health coverage in the United States. According to the 2025 Kaiser Family Foundation Employer Health Benefits Survey, 67% of covered workers are now enrolled in self-funded plans. Among large firms (200+ employees), that figure reaches 80%. Even among smaller firms (10 to 199 workers), 27% of covered workers are in self-funded arrangements, with an additional 37% in level-funded plans that include a self-funded component.

If your organization self-funds its health plan, you need actuarial support for several recurring activities: calculating IBNR reserves for year-end financial statements and audits, setting premium-equivalent rates, evaluating stop-loss insurance (both specific and aggregate attachment points), certifying COBRA rates, analyzing plan design changes, and testing compliance with Affordable Care Act requirements including Minimum Value and affordability standards.

What the actuary does: IBNR reserve calculations, premium-equivalent rate development, stop-loss adequacy analysis, COBRA rate certification, ACA compliance testing, funding adequacy analysis, and plan design impact modeling.

Who typically hires: CFOs and HR/benefits directors at self-funded employers. Critically, benefits brokers and third-party administrators (TPAs) also hire actuaries on behalf of their employer clients, since many brokers and TPAs do not have actuaries on staff but their clients need actuarial sign-off for financial reporting and compliance purposes.

Why it matters: Underestimating IBNR reserves creates a direct hit to your financial statements when claims ultimately come due. Overpaying for stop-loss coverage, or setting attachment points incorrectly, wastes money that could be retained in the plan. Based on patterns we have observed in how self-funded employers engage actuarial firms, the organizations that get the most value tend to use their actuary as a strategic advisor on plan design and cost containment, not just a number-cruncher at year-end.

Credential to look for: FSA or ASA (Society of Actuaries), with MAAA designation.

Municipalities, Public Entities, and School Districts (Pension and OPEB Valuations)

Every public entity in the United States that participates in a pension plan or provides retiree health benefits is subject to the Governmental Accounting Standards Board (GASB) reporting requirements. GASB Statement No. 68 requires employers to recognize their proportionate share of net pension liability on their financial statements. GASB Statement No. 75 imposes parallel requirements for Other Post-Employment Benefits (OPEB), primarily retiree health coverage.

These are not optional. GASB standards apply to all governmental employers that report on a GAAP (accrual) basis of accounting, with no exemption based on budget size or any other financial threshold. Compliance requires actuarial valuations, typically performed annually, that calculate the plan’s total liability, net position, and the employer’s proportionate share. Experience studies, conducted every three to five years, update the demographic and economic assumptions underlying these valuations.

What the actuary does: Annual actuarial valuations for GASB 67/68 (pensions) and GASB 74/75 (OPEB), experience studies, funding policy development, contribution projections, plan design consulting, and actuarial audits (reviewing another actuary’s work for a second opinion).

Who typically hires: City managers, county finance directors, school district CFOs, plan trustees, and state retirement system boards.

Why it matters: The liabilities involved are often among the largest items on a public entity’s balance sheet. Understated pension or OPEB obligations can affect bond ratings, borrowing costs, and public trust. From tracking how municipal finance teams handle these engagements, entities that conduct experience studies on a regular cycle and actively use valuation results to inform funding policy decisions tend to achieve more stable long-term funding trajectories.

Credential to look for: FSA or ASA (Society of Actuaries), with MAAA designation. For pension-specific work involving ERISA plans, see the Enrolled Actuary section below.

Private Employers with Defined Benefit or Cash Balance Pension Plans

If your organization sponsors a defined benefit or cash balance pension plan governed by ERISA (the Employee Retirement Income Security Act), federal law requires that an Enrolled Actuary (EA) certify the plan’s annual funding valuation. The EA signs the actuarial certification on IRS Form 5500, Schedule SB, and calculates the contributions required to keep the plan adequately funded. This is one of the few areas in which a specific actuarial credential is mandated by law.

The consulting market for this work spans large corporate pension plans and, increasingly, small business retirement plan design. Cash balance and defined benefit plans have become popular tax-optimization tools for high-income business owners, including physicians, attorneys, CPAs, and other professionals who want to shelter significantly more income than a 401(k) alone allows.

What the actuary does: IRS Form 5500 Schedule SB actuarial certification, PBGC premium calculations, pension de-risking analysis (lump sum windows, annuity buyouts), plan termination studies, and plan design for tax optimization.

Who typically hires: Small business owners seeking tax-advantaged retirement strategies, corporate benefits departments managing legacy pension obligations, and CPAs or financial advisors recommending plan structures to clients.

Credential to look for: Enrolled Actuary (EA), designated by the Joint Board for the Enrollment of Actuaries (a joint body of the IRS and Department of Labor). The EA credential is legally required for ERISA pension funding work.

Captive Insurance Companies and Alternative Risk Programs

The captive insurance industry has reached a significant scale, with more than 10,000 risk-bearing entities operating globally in 2025 across traditional captives, protected cells, and series LLC structures, according to industry analysis. Collectively, captives write approximately $62 billion in direct premiums annually. Regulators in every captive domicile require a feasibility study before licensing a new captive and an annual Statement of Actuarial Opinion (SAO) thereafter.

Whether your organization is exploring captive formation for the first time or managing an existing captive, actuarial involvement is both a regulatory requirement and a practical necessity. The feasibility study quantifies the risks to be insured, establishes initial premium levels, and projects capital adequacy. Ongoing actuarial work includes loss reserve evaluations, premium and rate setting, reinsurance analysis, and collateral negotiations.

What the actuary does: Feasibility studies for captive formation, annual Statements of Actuarial Opinion, loss reserve evaluations, premium/rate setting, capital adequacy analysis, program structure evaluation, and reinsurance analysis.

Who typically hires: Captive managers, risk managers at mid-to-large companies, attorneys and CPAs advising on captive formation, and captive management companies.

Why it matters: A poorly constructed feasibility study can lead to regulatory rejection, inadequate capitalization, or IRS challenges to the captive’s tax treatment. The SAO is a regulatory requirement in every domicile, and the actuary’s independence is critical to its credibility.

Credential to look for: FCAS or ACAS (Casualty Actuarial Society) for P&C captives, FSA or ASA (Society of Actuaries) for benefits-focused captives, always with MAAA designation.

Attorneys and Law Firms (Expert Witness and Litigation Support)

Actuaries serve as expert witnesses and litigation consultants across a range of legal proceedings. This specialized practice is governed by ASOP No. 17 (Expert Testimony by Actuaries), which establishes standards for actuaries providing testimony or litigation support.

Common engagements include insurance disputes (bad faith claims, coverage litigation, rate challenges), damages quantification in personal injury and wrongful death cases, pension and benefit valuations in divorce proceedings, reinsurance arbitration support, class action analysis, and insurance insolvency and receivership matters.

What the actuary does: Expert witness testimony, damages quantification, pension valuations for domestic relations matters, reinsurance arbitration support, class action exposure analysis, and insurance regulatory proceedings.

Who typically hires: Plaintiff and defense attorneys, law firms specializing in insurance coverage, employment law, family law, and personal injury.

Credential to look for: FCAS, FSA, or EA depending on the subject matter, with MAAA designation. Prior expert witness experience and familiarity with the applicable legal jurisdiction are particularly important in this context.

Benefits Brokers and Third-Party Administrators

Many benefits brokers and TPAs serve self-funded employer clients who need actuarial work but the broker or TPA does not have an actuary on staff. These intermediaries frequently engage consulting actuaries for IBNR calculations, rate development, stop-loss analysis, COBRA rate certifications, ACA compliance testing, and annual actuarial reports that their employer clients require.

If you are a broker or TPA looking for actuarial support to serve your book of business, the key considerations are turnaround time during renewal season, the ability to handle multiple clients on similar timelines, and familiarity with the specific stop-loss carriers and plan designs your clients use.

Small and Mid-Size Health Plans and Managed Care Organizations

Health plans that lack a full actuarial department still need appointed actuary services, statutory actuarial opinions, premium rate filings, product development and pricing support, experience analysis, and risk adjustment consulting. Provider-sponsored health plans, in particular hospitals and health systems entering managed care, frequently need actuarial support to navigate regulatory requirements for the first time.

Insurtechs, MGAs, and Program Administrators

Insurance technology startups, managing general agents, and program administrators often need actuarial work before they have the scale to hire an in-house actuary. State rate filings, loss reserve opinions, product pricing, predictive modeling validation, and regulatory compliance all require actuarial expertise that these organizations typically outsource.

Unions and Multi-Employer Trust Funds

Multi-employer health and welfare trusts (Taft-Hartley plans) need actuarial valuations, funding adequacy analysis, and benefit design consulting. Multi-employer pension funds require enrolled actuary valuations under ERISA. Trust fund administrators and union benefits directors are the typical buyers.

Other Markets (Government Procurement and Institutional Buyers)

Several large actuarial markets operate primarily through formal procurement processes rather than organic search. State departments of insurance outsource rate filing reviews and financial examinations through government RFPs; firms like Pinnacle, Lewis & Ellis, and NovaRest compete for these multi-year prequalification contracts. State Medicaid agencies require actuarial certification of managed care capitation rates under federal law (42 CFR 438.6(c)), a market dominated by firms like Milliman and Wakely. Private equity firms and investment banks engage actuaries for reserve due diligence and actuarial appraisals during insurance company acquisitions, though these relationships are typically sourced through professional networks rather than web searches.

These markets are mentioned here for completeness and to demonstrate the breadth of consulting actuarial work. If your organization operates in one of these spaces, the general guidance in this page on credentials, vetting, and engagement structures still applies.

Understanding Actuarial Credentials: A Plain-Language Guide

Actuarial credentials can look like alphabet soup to outsiders. Here is a practical guide organized around the question that matters most: which credential does my actuary need for the work I need done?

FCAS / ACAS (Casualty Actuarial Society)
The CAS credentials focus on property and casualty insurance. If your need involves workers’ compensation reserves, general liability, commercial auto, captive insurance, or any other P&C risk, look for CAS credentials. A Fellow (FCAS) has completed the full examination curriculum; an Associate (ACAS) has completed the initial set of exams.

FSA / ASA (Society of Actuaries)
The SOA credentials cover life insurance, health insurance, retirement and pensions, and finance. If your need involves health plan IBNR, pension valuations, OPEB, life insurance, or annuities, SOA credentials are relevant. A Fellow (FSA) has completed the full exam pathway; an Associate (ASA) has completed the foundation exams.

MAAA (Member, American Academy of Actuaries)
The MAAA is the U.S. practice credential. The American Academy of Actuaries is a 20,000-member professional association that sets qualification, practice, and professionalism standards for actuaries in the United States. The MAAA designation is required to issue Statements of Actuarial Opinion, and anyone performing regulatory actuarial work in the U.S. should hold this credential. As of January 1, 2026, new MAAA applicants must meet updated requirements that include a Competency Framework covering actuarial knowledge, U.S. laws and practices, and professionalism standards, plus three years of responsible actuarial experience including at least one year of U.S. experience.

EA (Enrolled Actuary)
The Enrolled Actuary credential is issued by the Joint Board for the Enrollment of Actuaries, a joint body of the IRS and Department of Labor. EAs are specifically authorized to perform actuarial work on ERISA-governed pension plans. If your organization has a defined benefit pension plan, the actuary who signs the funding valuation and IRS Form 5500 Schedule SB must be an Enrolled Actuary. This is a legal requirement, not a professional preference.

FCA (Fellow, Conference of Consulting Actuaries)
The FCA credential indicates significant consulting experience specifically. It is relevant when hiring an independent consulting actuary and signals a career focused on client-facing advisory work.

CERA (Chartered Enterprise Risk Analyst)
The CERA is an enterprise risk management specialty credential offered through the SOA. It is relevant for organizations seeking actuarial support on enterprise-wide risk assessment, capital modeling, or strategic risk management.

Credential Quick Reference

Your Situation	Required/Recommended Credential
Workers’ comp reserve study	FCAS or ACAS, MAAA
Self-funded health plan IBNR	FSA or ASA, MAAA
GASB pension valuation (public entity)	FSA or ASA, MAAA
GASB OPEB valuation	FSA or ASA, MAAA
ERISA pension funding valuation	EA (legally required), MAAA
Cash balance plan design	EA, MAAA
Captive feasibility study (P&C)	FCAS or ACAS, MAAA
Captive SAO (benefits-focused)	FSA or ASA, MAAA
Expert witness (insurance dispute)	FCAS or FSA (depends on subject), MAAA
Expert witness (pension/divorce)	EA and/or FSA, MAAA
State rate filing (P&C)	FCAS or ACAS, MAAA
Health plan statutory opinion	FSA or ASA, MAAA
Stop-loss evaluation	FSA or ASA, MAAA

Consulting Firms vs. Independent Practitioners: How to Choose

The actuarial consulting landscape includes firms ranging from global enterprises with hundreds of actuaries to solo practitioners. Understanding the landscape helps you match your engagement to the right type of firm.

Large Global Firms (Milliman, WTW, Aon, Deloitte, PwC, Oliver Wyman)
These firms employ hundreds of actuaries across multiple practice areas and geographies. They handle the most complex multi-line engagements, insurance M&A transactions, and large-scale regulatory projects. Rates tend to be higher, and work may be performed partly by junior staff under senior supervision. Best suited for large, complex engagements that require deep bench strength, multi-state coordination, or integration with broader consulting services.

Mid-Size Specialty Firms (Pinnacle, Huggins Actuarial, Lewis & Ellis, Perr&Knight, Risk Strategies)
These firms offer deep niche expertise with more partner-level attention than the largest firms, often at more competitive rates. Many have built strong reputations in specific segments: captive insurance, self-insured workers’ compensation, insurtech rate filings, or litigation support. Best suited for organizations that need specialized expertise and value direct access to senior actuaries.

Boutique and Solo Practitioners (BRC Actuaries, Actuarial Consulting Group, Healthcare Actuaries, Independent Actuaries Inc., SGRisk)
Smaller practices and independent consultants provide senior-level attention on every engagement, with the lowest overhead passed through to clients. Many are deeply specialized in a single area, such as pension/OPEB valuations, small self-funded plan IBNR, or retirement plan design for small businesses. Best suited for straightforward recurring engagements where the expertise of a single senior actuary is all you need.

When firm size matters: Complex multi-state regulatory examinations, large M&A transactions, and engagements requiring multiple specialty areas benefit from larger firms. When it doesn’t: Annual workers’ compensation reserve studies, GASB valuations for a single plan, IBNR calculations for a mid-size self-funded plan, and retirement plan design for a small business are all well-served by mid-size or boutique firms.

Red flags regardless of firm size: The actuary assigned to your engagement does not hold the credentials required for the work; the firm has no documented peer review process; the firm does not carry professional liability (errors and omissions) insurance; the actuary is unfamiliar with your state’s specific regulatory requirements.

What to Expect: Engagement Structures and Cost Factors

Actuarial consulting engagements are typically structured in one of three ways:

Hourly billing is common for open-ended or advisory engagements where the scope is not well-defined at the outset, such as litigation support or complex plan design projects.

Project-based or fixed fees are standard for well-defined deliverables like annual reserve studies, GASB valuations, and captive feasibility studies. This model gives you cost certainty and is the most common structure for recurring actuarial work.

Annual retainer arrangements are used by organizations with ongoing actuarial needs throughout the year, such as self-funded health plan sponsors who need ad hoc support between formal annual engagements.

What Drives Cost Variation

Several factors affect the cost of an actuarial engagement:

Complexity and scope. A straightforward annual workers’ compensation reserve study for a single-state employer involves less work than a multi-state captive feasibility study or a contested expert witness engagement.

Jurisdiction. Some states have more complex self-insurance regulatory requirements than others. Multi-state engagements require familiarity with each state’s specific rules.

Timeline. Rush engagements cost more. Planning ahead, particularly for recurring annual work, allows the actuary to schedule the engagement efficiently.

Seniority of the actuary. Engagements staffed primarily by senior credentialed actuaries cost more per hour but may require fewer total hours than work delegated to junior staff who need more supervision.

Data quality. This is one of the most underappreciated cost drivers. Cleaner, more complete data requires less actuarial time to validate, reconcile, and analyze. Organizations that prepare their data carefully before the engagement begins consistently receive faster turnaround at lower cost.

What You Will Receive

A typical actuarial engagement produces an actuarial report documenting the analysis, assumptions, and results; a Statement of Actuarial Opinion if applicable (for regulatory filings, reserve certifications, or statutory opinions); supporting exhibits with detailed calculations; and, at the outset, a data request specifying exactly what information the actuary needs from you.

Questions to Ask Before Hiring an Actuary

Use this checklist when evaluating a consulting actuary or actuarial firm:

1. Do you hold the specific credentials required for this work? An EA for ERISA pension work, MAAA for opinions, FCAS or FSA for the relevant specialty area. Ask directly; do not assume.
2. What is your experience with our state’s regulatory requirements? Self-insurance rules, filing requirements, and regulatory expectations vary significantly by state. An actuary experienced in California’s OSIP requirements may need to familiarize themselves with New York’s Workers’ Compensation Board guidance, and vice versa.
3. Do you carry professional liability (E&O) insurance? This protects both the actuary and your organization in the event of an error.
4. Are you familiar with the applicable Actuarial Standards of Practice (ASOPs)? ASOPs are promulgated by the Actuarial Standards Board and govern how actuarial work is performed. Your actuary should be able to identify which ASOPs apply to your engagement.
5. What does your peer review process look like? A second actuary reviewing the work before delivery is a standard quality control practice. Ask about it.
6. Can you provide references from similar engagements? The best predictor of a good outcome is a track record of successful work for organizations like yours.
7. What data will you need from us, and in what format? Getting this question answered early prevents delays and rework.
8. What is your turnaround time? Especially important for annual regulatory filings with firm deadlines.
9. Will I be working with the credentialed actuary or junior staff? At larger firms, it is common for junior analysts to perform initial work under senior supervision. Understand the staffing model and who will be your primary contact.
10. How do you handle situations where your analysis produces results the client does not want to hear? Actuarial independence is fundamental to the profession’s credibility. An actuary who adjusts results to match client expectations is not providing the protection you are paying for.

Working with Your Actuary Effectively

Once you have selected an actuary, here are practical steps to get the most value from the engagement:

Prepare your data before the engagement begins. The actuary will send a detailed data request. Responding with clean, complete, properly formatted data is the single most effective way to reduce costs and accelerate turnaround. Common data requests include claims triangles (paid and incurred), exposure data (payroll, headcounts, plan enrollment), plan documents, prior actuarial reports, and financial statements.

Set clear communication expectations. Establish how often you will receive updates, who the primary contacts are on both sides, and what format the deliverables will take. Actuarial reports are written to comply with professional standards and regulatory requirements, which means they can be dense and technical. A good actuarial consultant will also provide a plain-language summary of findings and be available to walk you through the results.

Understand that actuarial reports and opinions are written for regulators, not business people. The formal report satisfies professional and regulatory standards. The conversation you have with your actuary about what the numbers mean for your organization is where the real value is. Ask questions.

Think about the ongoing relationship. Many actuarial needs are recurring: annual reserve studies, annual GASB valuations, annual IBNR calculations. An actuary who knows your organization, understands your data systems, and has historical context will provide more efficient and insightful work over time. Switching actuaries has a real cost in terms of the learning curve on your specific situation.

Consider an actuarial audit. If you have had the same actuary for many years, or if you are seeing results that seem inconsistent, engaging a second actuary to review the first actuary’s work (an “actuarial audit”) is a legitimate and relatively common practice, especially for public entities.

Need Help Finding the Right Actuary?

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