Go on then – what is actuarial science?
Actuarial science is the application of mathematical skills to the social sciences to solve important issues for industries including insurance, government, business, and academic research. Essentially ‘actuaries’ (those accomplished in actuarial science) use statistics to predict uncertain events, for example, insurance policy income, pension scheme payouts, and stock market performance.
So why is it useful?
The role of actuaries is essential nowadays in making more accurate business predictions – their ultimate goal is to balance financial success with an acceptable level of risk. Actuarial science prevents businesses making reasonably blind decisions, and provides a fairer financial outcome for both business and consumers as outcomes are based on solid evidence witnessed over a period of time.
How do actuaries work?
Actuaries typically use tools from statistics, economics, and finance to measure and quantify risk, and subsequently manage it. It typically involves plenty of number crunching in order to provide the basis for decision-making for business activities, for example, choosing the amount of money a policyholder should pay for their insurance premium, or indeed the amount of return that they should gain. They are financial forecasters for businesses.
Should I go on to study actuarial science?
You should consider studying actuarial science at university if you’re interested in the mathematics of finance, probability theory, statistics, finance, economics, and computer science, and have a particular strength in mathematics. A growing number of universities are beginning to offer the course, and career opportunities at the end of your studies are bright and offer plenty of opportunities for advancement to management levels. Demand currently exceeds supply for actuaries, so you could reasonably expect to enter well-paid employment in the finance, investments, banking, or insurance industries.
Courses & Eligibility
There are many universities in India that provide Graduation, Post graduation degree courses in Actuarial Sciences. After completing your graduation and post graduation, you can join any of the professional bodies of India as a student member and became a fellow in IAI. The UG & PG Courses are given below:
Graduate Courses:
- B.Sc in Actuarial science
- BA (Hons.) in Insurance & Banking
- Bachelor of Science (B.Sc) in Actuarial and Financial Mathematics
Post Graduate Courses:
- Post Graduate Diploma in Actuarial Science
- M.Sc in Actuarial science
- Master’s program in Insurance Business
- MBA in Actuarial science
- Master of Science (M.Sc) in Statistics (Actuarial)
After graduation & post graduation, candidates cannot eligible to practice as an actuary. But these courses provide better conceptual clarity to the candidates. It helps them to directly write papers of IAI through self-study.
Eligibility Criteria
You can make your career as an Actuary, if you meet the given eligibility criteria:
- Candidate must be 18 years old.
- Candidate should have completed their 10+2 level examination.
- Candidates who qualify their Graduation/Post graduation with Mathematical subjects.
- Those candidates have any other professional degree (Engineering/CA/CS/MCA/MBA) they can also make their career in this field.
- Candidate should be a qualified member of these professional bodies: Fellow of Insurance Institute of India (III), Certified institute of Financial Analysts of India (IFAI), The Institute of Chartered Accountants of India (ICAI) & The institute of Cost and Works Accountants of India (ICWAI) & pass with the subjects: Mathematical Basis of Insurance and Statistics.
- After completing your graduation and post graduation, you can join any of the given professional bodies of India as a student member and became a fellow in IAI.
Admission
The Actuarial Society of India or Institute of Actuaries of India is the only professional body of Actuaries in India that was formed in 1944. The Actuary is a fellow member of the Institute of Actuaries of India (IAI). IAI is the professional examining body that organizes certificate, fellowship level & Associateship level examinations.
Procedure to become an Actuary:
- For admission in IAI you have to appear for the given entrance exam: Actuarial Common Entrance Test (ACET 2018).
- To become an actuary, Candidate has to qualify the actuarial science exam that is conducted by the IAI and have 3 years of practical work experience.
- After qualifying these examinations, candidate becomes eligible to be admitted as an Associate Member of the society. They can use AASI against their name as a registered actuary.
Colleges in India offer UG & PG courses:
- Amity School of Insurance and Actuarial Science, Noida
- NMIMS University, Mumbai
- Delhi University
- Aligarh Muslim University
- The National Insurance Academy, Pune
- University of Pune
- Institute of Actuaries of India, Mumbai
Career & Jobs
“Career Opportunity in Actuarial Science is globally recognized”
Traditionally, Actuaries can only employ in life-insurance Companies. But now, the job opportunity increases & they can work in non-life insurance companies, investment consultancies, financial services, banking and stock exchanges.
They can also work in government and private companies. Many of the largest insurance firms employed actuaries as CEOs (Chief Executive Officers). A person who studies the course can now be a part of the banking and business field. Actuaries can also employ in BPOs, risk management, academics, pension funds and management consultancy firms.
An Actuary can determine insurance premium rates, designs insurance and pension plans, risk management, designing social security schemes, carrying out peer reviews & compiles data related to rates of injury, sickness, retirement, mortality and property loss.
The demand of Actuaries in abroad is huge in both the developed as well as emerging markets.
Skills required to become an Actuary:
- Depth knowledge of statistics and Mathematics
- Natural problem-solving
- Good communication skills
- A good sense of business
- Possess good modeling skills
Top Recruiters:
- Max Bupa Health Insurance
- IDBI
- McKinsey Advanced Healthcare Analytics
- Towers Watson
- Mercer
- Directorate of Postal Life Insurance
- E&Y
- WNS
- PwC Actuarial Services India
- Milliman
- Swiss Re
- Future Generali
Salary
“Sky is the limit for an Actuary”
As a fresher, your income should be Rs. 3 Lacs to Rs. 5 Lacs per year. Candidates who have a 5 to 6 years experience, as an actuary they can earn Rs. 10 to Rs 15 Lacs per annum. After becoming a fellow of IAI, your salary is Rs 20 Lacs to Rs 30 Lacs per year. It is the fact that today, actuaries are amongst the highest paid professionals.
Books & Study Material
Here we are providing a list of books to study Actuarial Science. These books have been compiled by our experts after analyzing the other study materials:
Actuarial Science: Theory And Methodology by Hanji Shang
Actuaries’ Survival Guide: How to Succeed in One of the Most Desirable Professions 1st Edition by Fred Szabo
Financial And Actuarial Statistics by Dale s. Borowiak & Arnold F. Shapiro
Computational Actuarial Science with R by Arthur Charpentier
Insurance, Risk Management and Actuarial Science by Lucy Heckman
Achieving Your Pinnacle: A Career Guide for Actuaries by Tom Miller
Practical Risk Theory for Actuaries by C.D. Daykin, T. Pentikainen & Martti Pesonen
Actuaries in India can work in the following areas:
- Life Insurance
- General Insurance
- Health Insurance
- Reinsurance Companies
- Pension Funds
- Consultants
- Investments
- Government
- Academics
- Risk Management
Life, General, Health Insurance & Reinsurance Companies
Traditionally Actuaries work with Life Insurance Companies, but their importance lies equally in General and Health Insurance Companies also.
The areas of their concern include:
- Product design, which includes designing new policies as per the changing requirements of the customers, Pricing the policy, ie. Setting the suitable premiums for the benefits and services offered by the company Profit Testing and distribution of profits among Shareholders and Policyholders.
- Actuaries help the management of the company in running the business in sound financial manner and to take strategic decisions from time to time.
- The Appointed Actuary of a Company has the responsibility of demonstrating financial stability of the company to the State Regulatory Authorities at all times.
Pension Funds
Their areas of concern include:
- Designing a Scheme of Benefits to the Members of the Pension Scheme, Calculating the Past Service Cost and the Future Service Cost of Benefits
- Certifying to the Regulator that the Fund Assets are sufficient to meet the liabilities and that the Assets are invested as per the Investment Pattern prescribed
- Calculating and Certifying the Pension cost on Acquisitions and Merger of Companies
Investment
- Quantifying the risk and the amount of investment returns available in the market
- Projecting the market expected investment returns using scientific methods and judgment to project the inflation rates, returns on the various market segments – manufacturing, technology, pharma, etc.
- Choosing an Investment Strategy which strike an appropriate balance between risk and returns
- Analyzing and identifying the Opportunities for increasing the returns
- Advising on the Investment Pattern to match the cash inflow and liability outgo for Insurance companies, pensions funds, banks, mutual funds, etc.
Consultants
- Consultants can act as Appointed Actuaries for General Insurance companies
- They also provide actuarial advice and their opinion on actuarial matters for Insurance Companies, Pension Funds, Government, etc.
- They provide investment advice to individuals that best suit their needs and family circumstances.
- They calculate the reversionary interests of members of Trusts.
Government
- Population projections
- Managing State Pension Schemes
- Identifying the regional differences based on geographical location, life style, income level, diseases prevalent, common occupation, etc.
- Regulatory role for Insurance Companies, Reinsurance Companies, Pension Funds
- Their role is increasing in designing Social Security Schemes, allocation of funds for development projects
Risk Management
- Fast Evolving field in recent days, for any massive project with lot of uncertainties.
- Identifying the various stages in the project while execution
- At each stage, identifying all the risk which may result in not meeting the expected outcome or estimated time
- Assigning a probability parameter to each of the identified risks
- Finding out a suitable measure to avoid or transfer those risks
- Processing the above-identified stages to various steps after allowing for the risk measures.
- For further info: Welcome to the Institute of Actuaries of India
