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BW Businessworld

What A Career In Actuarial Science Means

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Are you the sort of person who loves working with numbers and is extremely curious about the inner workings of financing a venture? Do you have highly developed communication skills and love debating on topics that display your practical approach and lateral thinking towards resolving issues? Then actuarial science is a career field that you must explore.
What is it all about?

Actuarial science is the discipline that applies mathematical and statistical methods to assess risk in insurance, finance and other industries and professions. It includes a variety of interrelated subjects like mathematics, finance, economics, computer programming and probability. It is used to get a comprehensive picture of the risks relating to contingent events and for scientific valuation of financial products in the fields of insurance, investments, retirement etc.

An Actuary is an expert who can  determine the monetary value of unusual items, such as a concert pianist's hands, the price property insurance for homes, given their location and the likelihood of a natural disaster, analyze statistical information about people above a certain age estimate deaths, disabilities, and retirement rates, advise movie studio owners about how much liability insurance they should purchase to cover dangerous sets etc.

An Actuary's skills are used to
a) design insurance products and set its prices
b) select the right kind of people for insurance products
c) minimise the amount of losses for the company by reinsuring the company's insurance policies
d) maximise the company's profits and protect the the customers' amounts kept with the company for  years
e) calculate the solvency/insolvency of the company and determine the adequacy of reserves.

What should you do to get hired as an Actuary?
A fellow member of the Institute of Actuaries of India (IAI) can sign up as an Actuary. You can begin by joining IAI as a student member and is required to clear 15 subjects in an exam conducted by the institute.
  • You can enter into the field of actuarial sciences straight after class XII or can join after finishing your graduation or postgraduation in Mathematics, Statistics, Economics, Computer Science, engineering or MBA( Finance).
  • You are eligible to join the program if you have atleast 85% in Maths/ Statistics in class XII or have a 55% in graduation/postgraduation in Maths, Stats, MBA Finance etc.
  • If you are  a fully qualified member of professional bodies such as  the Institute of Chartered Accountants of India or the Institute of Cost and Works, Accountants of India and Certified Institute of Financial Analysts of India, etc, you are eligible to join the IAI.
  • You will then need to take up  15 subjects  to prepare for the actuarial science exams conducted by IAI.
  • There is no fixed duration to complete the course as the syllabus has a lot of topics to cover and the field has become extremely specialised.
  • With the market opening up to competition, aggressive pricing, handling varied distribution options, product innovation,  it is necessary to keep up to date with specialised skills and upgrade oneself with the the latest calculating techniques and tools.
The Pay Packet
At entry level one's income could start anywhere from Rs. 4 lakh to Rs. 8 lakh per annum. After gaining experience of five to six years and clearing a good number of the possible 15 papers, an actuary can earn Rs. 12 lakh to Rs. 18 lakh per annum. Immediately after becoming a fellow of IAI one can earn anything from Rs. 20 lakh to Rs. 30 lakh per annum. The sky is the limit for an Actuary with 15 to 20 years of experience.

With the number of players in the insurance field increasing by the day, there is a growing need for qualified Actuaries in the country. The membership of IAI has increased significantly over the last seven or eight years, but there are just a few hundred fully-qualified actuaries (those who have passed all the exams and attained fellowship from IAI).Although there are adequate numbers of Actuaries in life insurance and pension (funds), a lot more are required in general insurance. An appointed Actuary could actually work there as a consultant instead of a full-time employee.

If you have what it takes to be an Actuary, hop on and start working towards a field that is highly rewarding in every way!

Payal Krishnan, Career Expert, Meritnation.com