Actuarial Science

INTRODUCTION:

You must have seen, heard and read about companies which provide insurance cover to policy holders in case of any eventuality like accidents, hospitalisation, household hazards, thefts or death and still others who look after investment schemes, employee benefits, retirement benefits and pension schemes. The policy holders are required to pay a fixed amount as instalments at regular intervals and they get this money back in the event of any untoward incident or upon the maturity of the policy. Have you ever wondered who decides as to what amount of money a policy holder should pay as premium or what sum should be given as pension amount or returns by the company.

Well, this exactly is what an actuary does. They calculate insurance risks and premiums. Technically speaking the job of an actuary is to assess the financial impact of an uncertain future event. Roughly speaking they look at the financial aspect of disasters; sarcastically speaking they are financial astrologers.

 

An actuary has to combine the skills of a statistician, economist and financier and employ techniques of probability, compound interest, law, marketing, management etc to predict the outcome of future contingencies and design solutions to lessen the financial severity of such events. 

To become an actuary one must be a Fellow of a recognised professional examining body like the Actuarial Society of India (ASI), Mumbai or the Institute of Actuaries, London. The work of an actuary involves a lot of number crunching and the nature of work is quite tedious, nevertheless it offers rewards in terms of intellectual challenge, status, job satisfaction and earnings. As their judgement is the basis of decision making for many business activities, their career paths often lead to upper management and executive positions.

ELIGIBILITY:

Any person with minimum 18 years of age and having a high degree of aptitude for mathematics and statistics can take up the course and become an Actuary. Courses available include Post graduate diploma in Actuarial Science, MSc. in Actuarial science etc.

A person is eligible to be considered for admission as a student member if he/she satisfies one of the following criteria.

1. Should have passed 10+2(HSC) or equivalent with at least 85% in Mathematics/ Statistics
2. Graduates or Post Graduate with not less than 55% marks in Mathematical subjects (i.e Mathematics or any of its branches; Statistics or any of its sub classifications such as Mathematical Statistics and Applied Statistics; Econometric; Computer Sciences; Any discipline of Engineering; Subject in Science such as Physics or its branches).
3. Candidates with CA/ CS/ CWA/ MBA (Finance)/ PGDBA
4. Fully qualified members of professional bodies such as the Institute of Chartered Accountants of India (ICAI), The institute of Cost and Works Accountants of India (ICWAI) and Certified institute of Financial Analysts of India (IFAI) and Fellow of Insurance Institute of India (III)- passing with the subjects Mathematical Basis of Insurance and Statistic
5. A student member of actuarial bodies such as Institute of Actuaries, London; Faculty of Actuaries in Scotland and Institute of Actuaries, Australia
6. Students from Society of Actuaries, USA and Casualty Actuarial society, USA , provided that they must have passed at least one subject from these bodies. 

Course Areas:

Students must take 15 subjects (14+1 optional) in preparing for the actuarial examinations. These subjects are grouped into 100 Series (CT), 200 Series (CA), 300 Series (ST) and 400 Series (SA). 

The subjects in CT Series cover Mathematical, statistical, economic and financial techniques, which are applicable internationally. The CA series contains a question of general actuarial interest and aims to test communication skills of the students with regard to application of actuarial technique learnt in the CT Series subject. The ST Series cover investment, Life-Insurance, General Insurance and Pensions and other Employee benefits. The SA Series subjects focus on the practical application of the Principles covered in the corresponding ST Series subjects and earlier subjects.

There are 9 Subjects in CT series, 3 subjects in CA series, 6 subjects in ST series out of which the student will chose 2 subjects and 6 subjects in SA series out of which the student will chose 1 subject.

CT series (Core Technical Stage)
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 - Economics
CT8 - Financial Economics
CT9-Business Awareness Module

CA series (Core Applications Concepts)
CA1-Core Applications concepts consisting of assets and liabilities
CA2-Modelling,CA3-Communications

ST series (Specialist Technical Stage)
ST1-Health & care Insurnce
ST2-Life Insurance
ST3-General Insurance
ST4-Pension & other employee benefit
ST5-Finance & Investment A
ST6-Finance and Investment B

SA series (Specialist Application Stage)
SA1-Health & Care
SA2-Life Insurance
SA3-General Insurance
SA4-Pension & other Employee Benefit
SA5-Finance
SA6-Investment

Certificates in Actuarial Techniques

A student member becomes eligible to get the Certificate in Actuarial Techniques (CAT) on passing all the CT Series subjects.

Associate ship - A student on passing all the subjects up to and including ST Series becomes eligible to be admitted as an Associate Member of the society and can use AASI against his/her name as a registered actuary.

Fellowship - A student on passing all the subjects up to and including SA Series and upon satisfying the other criteria specified for the purpose becomes eligible to be admitted as fellow member of the Society and can use FASI against his/her name as a recognized fellow.

Duration:

There is no fixed duration to complete the course. The aspirant has to clear the Entrance Examination and the 15 subjects prescribed. A student can attempt any number of subjects at a time and in any order. However, it is a better option to take the subjects in the numerical sequence in which these are numbered and not more than two or three at a time.

PERSONAL SKILLS:

A person with a high degree of aptitude for mathematics and statistics can become an actuary. The other necessary skills include good communication skills, ability to use computers and related technology, business sense, a practical outlook, a curious bent of mind, the ability to work on ones own and also be a team player as the situation demands and to be self-motivated. However an aspirant should have single minded devotion, total dedication and a systematic approach towards problems in order to successfully complete the various stages of the course and be registered as a fellow.

JOB PROSPECTS & CAREER OPTIONS:

Ø Traditionally actuaries have been associated with insurance sector but in present scenario with the economy opening up actuaries are needed in sectors like non-life insurance, employee benefits, health insurance, asset-management, reinsurance, insurance broking houses and consulting companies.

Ø The job of an actuary involves formulating policies and calculating the premium to be charged. For this they assemble and analyse data to estimate the probability of such eventualities as death, sickness, injury, disability and property loss and formulate a sum which is advantageous to the customer as well as the company.

Ø In areas where employee benefits and retirement/ pension schemes are dealt, the actuaries have to calculate the amount of money to be paid as contribution to pension fund in order to generate a certain income level post-retirement.

Ø Actuaries in administrative positions have to explain technical matters to executives, government officials, shareholders, policyholders. Actuaries working in tandem with government/ government agencies are responsible for designing social security and Medicare plans.

Ø Actuaries in administrative positions have to explain technical matters to executives, government officials, shareholders, policyholders. Actuaries working in tandem with government/ government agencies are responsible for designing social security and Medicare plans.

Ø Many of these professionals work as independent consultants providing actuarial advice to clients for a fee. Some also provide investment advice. Actuaries have scope for career growth not only in India but also in countries like USA, UK, Canada and Australia where they already have the necessary infrastructure and support system available.

REMUNERATION:

Ø If you can survive the grilling tests, there is a payoff - the median annual salary for an actuary is handsome. Actuaries are globally in demand and can command hefty pay packets, salaries and perks. No wonder then that this profession has been rated among the best jobs in the US.

Ø In India the trend is slowly picking up. Stipend for an actuarial trainee per month in India is around Rs 25,000 per month.

Ø Insurance companies and consulting firms give merit to experience and qualifications with salary packets ranging from 8 lacs per annum for beginners to around 40 lacs per annum for those in senior positions. In UK a qualified actuary can earn 20 lacs per annum.

COURSES

» B.Sc. Actuarial Science 
» M.B.A. Actuarial Science
» M.Sc. Actuarial Science 
» Post Graduate Diploma in Actuarial Science (PGDAS)
» Training in Actuarial Science

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