CAREER IN ACTUARIAl SCIENCE
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, analyse 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.
Skills required
An Actuary’s skills are used to—
Design insurance products and set its prices
Select the right kind of people for insurance products
Minimise the amount of losses for the company
Maximise the company’s profits and protect the customers’ amounts
Calculate the solvency/ insolvency of the company and determine the adequacy of reserves.
Starting from the scratch
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 programme if you have at least 85 per cent in Maths/ Statistics in Class XII or have a 55 per cent in graduation/postgraduation in Maths, Statistics, 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 IAI’s actuarial science exam.
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 yourself.
Remuneration
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 between 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.
The writer is Payal Krishnan, career expert at Meritnation.com.