What is Actuarial Science?
Being an actuary means a special set of skills such as love for mathematics and logic, problem-solving skills with good business sense, a flair for communication and number crunching. If you are a genius in all the mentioned skills, think of a career as an actuary today.
Actuarial science is the discipline which involves the application of mathematical and statistical methods to carry out risk assessment in insurance, finance, other industries, and professions. Those who are qualified in this field and hold extensive knowledge and experience are known as Actuaries. Actuarial Science covers a number of interrelated subjects such as mathematics, probability theory, statistics, finance, economics, and computer science. The Actuaries focus on detailed study, assessment, and management of risk using statistical & financial models and help businesses to set up policies in place that minimize the cost of that risk. Actuaries are aware of the pricing, preparing the amount of liabilities, and setting capital requirements for unknown future happenings.
The Actuarial Society of India (ASI) was set up in 1944 and later it was incorporated in the international governing body of Actuaries, the International Actuarial Association (IAA), in 1979. Traditionally, the Actuarial profession was limited to the insurance sector, but now, these talented professionals are expanding to other industries as well.
The Institute of Actuaries of India (IAI) conducts the regulation of the profession of Actuaries in India. When a student turns to be a member of IAI after passing ACET exam, it is assumed that he can be an actuary.
Pre-requisites for this course
Following are the qualifications that one has to attain to take a step ahead for being an actuary:
10+2(H.S.C) or equivalent or Graduating or Post Graduating in Mathematics, Statistics, Economics, Computer Science, Engineering, MBA (Finance) and other similar qualifications or
Become a qualified member of any of the following professional bodies:
- The Institute of Chartered Accountants of India
- The Institute of Cost and Works Accountants of India
- Certified Institute of Financial Analysts of India
- Fellow of Insurance Institute of India
After passing ACET, you can apply online to become a student member of IAI by visiting the Admission section at www.Actuariesindia.org
Actuarial exams by IAI
Actuarial Common Entrance Test exam is a test conducted to those who plan to enroll as student members of IAI and aspire to take Actuarial examinations from the IAI.
Members who have been already admitted to the IAI are not required to take this entry exam and can continue to take their Actuarial examinations as earlier.
IAI conducts 15 Actuaries exams including 9 written and 3 practical exams: The exam stages are as follows.
Stage 1: Core Technical (CT)
CT1 Financial Mathematics
CT2 Finance and Financial Reporting
CT3 Probability and Mathematical Statistics
CT4 Models
CT5 General Insurance, Life and Health Contingencies
CT6 Statistical Methods
CT7 Business Economics
CT8 Financial Economics
CT9 Business Awareness Online Module (Practical Exam)
Stage 2: Core Application (CA)
CA1 Actuarial Risk Management
CA2 Model Documentation Analysis and Reporting (Practical Exam)
CA3 Communication (Practical Exam)
Stage 3: Specialist Technical (ST)
At this step you can opt any two subjects and get yourself specialized:
ST1 Health and Care
ST2 Life Insurance
ST4 Pension and Other Employee Benefits
ST5 Finance and Investment A
ST6 Finance and Investment B
ST7 General Insurance Reserving and Capital Modelling Specialist Technical
ST8 General Insurance Pricing Specialist Technical
ST9 Enterprise Risk Management
Stage 4: Specialist Application (SA)
Here you could opt any one subject, and we suggest you to opt one which has relevance with the ST subjects you choose.
SA1 Health and Care
SA2 Life Insurance
SA3 General Insurance
SA4 Pension and Other Employee Benefits
SA5 Finance
SA6 Investment
Once you are qualified with all the above 9 CT papers & 3 CA papers, you will be positioned as an Associate Member of the IAI. And if you qualify all the 15 papers then you could be placed as Fellow Member of the IAI.
For clearing all the exam stages and becoming an actuary, you are required to be highly skilled and sharp minded and this journey is not a simple one but a very tough process. Just after clearing 2-3 papers of IAI, most of the students quit studying as there are job opportunities still available. This is the reason why this industry is having a lack of highly qualified Actuaries.
What is next degree to acquire?
Apart from clearing fifteen Actuarial exams of the Institute of Actuaries of India (IAI), you can also go for a regular bachelors or masters course in the same field. M.Sc and MBA in Actuarial Science can be good for an Actuarial career.
While majoring in Actuarial science can benefit the students aspiring to be an actuary, however, it is not necessary for you to acquire major in this field. It is the ability to pass the Actuarial science exam enough to showcase your skills to the potential employers and determine if you are eligible to enter this profession.
Top Institutes
B.Sc. (Actuarial Science)
BA Hons. (Insurance & Banking)
MBA – Insurance & Financial Planning
MBA – Insurance & Banking
M.Sc. – Actuarial Science
M.Sc. – Actuarial Science
B.Sc. Actuarial Mathematics Science
M.Sc. Actuarial Science
P.G. Diploma Actuarial Science
ACET Exam Coaching
- Future Track offers a robust platform for actuarial professionals and offers a series of actuarial services including CT series coaching and corporate trainings. The training is imparted through multiple platforms like classroom coaching. The Institute is thus a complete guide to your actuarial career.
- SMEARS EDUCATION SOLUTIONS acts as a significant gateway to students offering corporate training facility and caters to the needs of those who have no time to avail the normal classroom activities.
Industries where an Actuary can work
- Life Insurance
- General Insurance
- Health Insurance
- Reinsurance Companies
- Pension Funds
- Consultants
- Investments
- Government
- Academics
- Risk Management
An actuary performance will surely differ to some extend in each of the branches mentioned above. The difference could lie in product pricing, financial modeling, valuations, risk management, carrying out peer reviews, designing social security schemes, advise on the premium to be charged, etc.
Indian companies who hire Actuaries in large numbers
- Max Bupa Health Insurance
- WNS, Towers Watson
- PwC Actuarial Services India, Mercer
- Directorate of Postal Life Insurance
- McKinsey Advanced Healthcare Analytics
- E&Y, Milliman, Swiss Re
- Future Generali
- IDBI.
Salary Structure
A fresher/ newly qualified actuary in today’s date earns between Rs. 15 to 20 lakhs. But the salary of an experienced actuary is more than that of a fresher. One could start his/her career an annual package of Rs.4 to 5 lakh.
Desired qualities to become an Actuary
To be a successful actuary, you are required to be business savvy, commercially well trained and must acquire excellent communication skills. Actuaries, being mathematicians and statisticians, are often soft spoken and thus not a good communicator with non-technical ones. This quality needs to be emphasized by the Actuaries.
To become Actuaries, students need to be specialized in mathematics and statistics and possess good modeling skills. Further they are required to pass the Actuarial Science Associate and Fellows exam. Actuaries can also work with insurance companies, universities, labor unions, and government agencies.
Students who pursue Actuarial science are more likely to learn calculating bond interest and insurance premiums, risk assessment, distributing payments and creating survival models. These classes are provided in Actuarial science degree programs, so students need to complete the common education requirements for science as well as for this field.
Core concepts you’ll come across while studying to become an actuary
- Counting techniques
- Insurance policies
- Calculus
- Risk analysis
- Interest theory
Students go through the examination of life, social and casualty insurance to prepare themselves for the Actuarial Science Associate and Fellows exam. Students grasp counting techniques, moment-generating functions and insurance medicine. Students get ready for careers in insurance by learning about mortality, health outcomes, and insurance policies.
The course enables students to gain an enormous knowledge of the subject of insurance policies. Simple and compound interest, annuities, depreciation, and reinvestment, are tested. Students learn calculating present and future values of insurance claims, stocks, and bonds. The course also leads to preparation for the Actuarial Science Associate and Fellows exam.
To kick start career as Actuaries, students must take courses in Actuarial science, and they also must pass the Actuarial Science Associate and Fellows exam.
Pros and Cons
Due to the rigorous academic requirements, Actuaries go through and the competitive nature of work, Actuaries earn handsome incomes well above average and are also in high demand. It is projected that there will be 27 per cent growth in jobs between 2010 and 2020. Aside from the essential responsibilities involved, an actuary’s profession involves some level of stress. Any job with a profile which includes risk will involve some stress, especially holds true for Actuaries because they calculate the risks of financial decisions for employers. Actuaries need to perform precise calculations and analyses to avoid the wrong financial moves or poor investment decisions.
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