career repository

Actuary

By on Dec. 13, 2017

1. Career Overview
Actuary as a career is gaining momentum and recognition gradually. Actuarial science is a multidisciplinary field that needs knowledge and application of mathematics, economics, finance and statistics. Actuarial Science uses available data and create financial and statistical models to analyse future impact on various aspects of business and companies. Their jobs involve:

  • Analysis of the past data
  • Creating a model for future trend
  • Assessment of the risk involved in the process
  • Interpreting the results in financial terms
Traditionally actuaries mainly work in insurance domain. Some of the primary jobs of actuary are to determine risk of legal liability of insurance, pricing and valuation, solvency analysis, loss-profit and risk-return analysis, corporate planning and financial management. The actuarial science is now being diversified and the Actuary has the scope to work in multiple disciplines like:
  • Life insurance
  • General insurance
  • Health insurance
  • Re-insurance
  • Pension schemes
  • Investment
  • Risk management
  • Taxation
  • Banking
  • Academics

2. Role Models
  • Wendell Milliman-- He is the founder of Milliman Inc., one of the largestactuarial and business consulting companies globally. A Graduate inMathematics from the University of Washington, Milliman worked in several companies as actuary or similar position before he founded Milliman Inc. alongwith Stuart Robertson. Some of those companies include Oregon Mutual Life Insurance Company, North western Mutual Accident Association, andEquitable Life Assurance Society. Apart from co-founding Milliman Inc., He was holding significant positions in professional organizations. He helped forming American Academy of Actuaries and was president of Society of Actuaries

  • Paul Sweeting -- He is the professor of Actuarial Science at the University of Kent. He was the Managing Director at J.P. Morgan Asset Management, headed Research at Legal and General Investment Management and was Head of Strategy in Europe. He is affiliated with several professional bodies and also is a Chartered Enterprise Risk Actuary and CFA Charter holder. His book: Financial Enterprise Risk Management’ is well-known in the actuary profession

  • Tania Chakrabarti -- She is the Executive Director – Advisory Services at Earnest & Young. Prior to that she headed the Actuarial Services at Royal Sundaram Alliance Insurance Company. Tania completed Master’s degree in Quantitative Economics from Indian Statistical Institute. She got her Actuary course completed and joined Royal Sundaram group. She is one of the young and successful professionals in this career

3. Education Track

The education and training for Actuarial Sciences in India is regulated by The Institute of Actuaries of India (IAI). IAI is the statutory body created under ‘The Actuaries Act 2006’ to regulate the profession of Actuaries in India. IAI conducts Actuarial examination which is the multi-layer examination protocol to qualify as an Actuary.

3.1 Basic Educational Qualification and Skills to opt for Actuary career
  • A person who has completed a Higher Secondary (10+2), graduation or post-graduation can apply for Actuary. Also anyone who is a qualified member of The Institute of Chartered Accountants of India, Certified Institute of Financial Analysts of India, The Institute of Cost and Works Accountants of India, Fellow of Insurance Institute of India, MBA, Engineering or any other similar course can take the up Actuarial Science
  • The person should have very good aptitude in statistics and mathematics
  • Has to have excellent awareness of business
  • Should have skills of problem solving and logical thinking
  • Efficient communicator

3.2 What is ACET?
  • Actuarial Common Entrance Test (ACET) is the first step towards the Actuary career
  • It is conducted at least twice a year and the test is done online from some designated centres across India
  • One has to qualify in ACET to be able to enrol as student member of IAI
  • If someone has already got a membership and got admitted to IAI, will not require to take ACET
  • Once the aspiring candidates are enrolled as student members, they are allowed to take the actuarial examination

3.3 Actuarial Examination

Once the person qualifies the ACET and becomes a student member of IAI, and be eligible to appear at the actuarial examinations. A total of 15 subjects has to be completed out of 4 stages as charted out by IAI.

  • Stage 1: Core Technical (CT) – All the 9 subjects in this stage are mandatory to complete. These are:

    • 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
    • Business Awareness Online Module (Practical Examination)

  • Stage 2: Core Application (CA) – All the 3 subjects in this stage has to be completed

    • CA1 – Actuarial Risk Management
    • CA2 – Model Documentation Analysis and Reporting (Practical Examination)
    • CA3 – Communication (Practical Examination)

  • Stage 3: Specialist Technical (ST) – This is the specialization level and 2 subjects out of 6 has to be taken

    • ST1 – Health and Care
    • ST2 – Life Insurance
    • ST3 – Pension and Other Employee Benefits
    • ST4 – Finance and Investment A
    • ST5 – Finance and Investment B
    • ST6 – General Insurance Reserving and Capital Modelling Specialist Technical
    • ST7 – General Insurance Pricing Specialist Technical
    • ST8 – Enterprise Risk Management

  • Stage 4: Specialist Application (SA) – Only 1 Specialist subject out of the listed 6 has to be completed. Subject chosen at this level should be in tune with the subjects selected in Stage 3

    • SA1 – Health and Care
    • SA2 – Life Insurance
    • SA3 – General Insurance
    • SA4 – Pension and Other Employee Benefits
    • SA5 – Finance
    • SA6 – Investment

    After clearing Stage 1 and Stage 2 subjects, the person becomes an Associate member of IAI and once all 15 papers from all 4 stages are completed, the person becomes a Fellow Member of IAI.
    The process of Actuarial Examination is challenging and time consuming and many students opt out after completing few subjects. So, there is a scarcity of full-fledged Actuary in the industry

4. Specialization or Branches

Stage 3 and Stage 4 subjects in Actuarial examination are specializations within the field and one can choose those as per their interest.

Moreover, there are specialization courses in graduate and post graduate levels which are offered by several institutions in India. Completing education with those credentials help one to complete the Actuarial examination by IAI more easily since ‘Core’ subjects, that is Stage 1 and Stage 2 subjects in actuarial examination are mostly covered in those courses.
Some of the Institutions are:
  • Amity School of Actuarial Science in Noida offers:
    • B.A. with Honours in Insurance and Banking
    • B. Sc. In Actuarial Science
    • M. Sc. In Actuarial Science
    • MBA in Insurance and Banking
    • MBA in Insurance and Financial Planning
  • Christ University in Bangalore offers M. Sc. In Actuarial Science
  • Bishop Heber College in Trichy offers:
    • B. Sc. In Actuarial Mathematics Science
    • M. Sc. In Actuarial Science
    • Post Graduate Diploma in Actuarial Science
Other institutes include:
  • The National Insurance Academy, Pune
  • College of Insurance, Mumbai
  • Kalyani University, West Bengal
  • Insurance Training Centre, Kolkata
  • Institute of Actuaries if India, Mumbai
  • D.S. Actuarial Education Services
  • Shri Vile Parle KelavaniMandalsNarseeMonjee Institute of Management Studies, Mumbai

5. Career Path
  • Actuaries are typically employed by insurance companies for risk analysis and other market prediction. Health, Life, retirement, re-insurance and general insurance – all sectors of insurance employ actuaries

  • Actuaries are appointed by consultant firms who in turn provides advice to employers on their employee benefits and retirement plans

  • In investment domain, actuaries are required to determine pricing and valuation, risk analysis and profit

  • Actuaries have career opportunity in government sector, especially in retirement, pension and insurance departments

  • Actuaries can acquire higher positions in various organizations as they gain experience in their respective fields and could be in the top level of organization with decision-making responsibilities

  • With the increasing demand for this career, many institutions are offering courses of Actuarial Sciences. So there is demand of qualified actuaries for teaching work in academic domain

  • The Actuarial Society in India was established in 1944 and was included in the International Actuarial Association in 1979. The IAI course is recognized with mutual exemptions, with many other actuarial institutes globally and there scope of international opportunity for actuaries with progression of their career


6. Job Role
  • Actuary has to create statistical and mathematical modelling from financial and other data available
  • They depend on computer modelling softwares for data analysis
  • These models are used for risk analysis and valuation
  • The models help in designing, verifying and implementing different strategies for the business in order to risk and loss minimization as well as profit maximization
  • Based on observation Actuaries create reports for their clients, stakeholders and companies and help in decision making for them
  • Actuaries mainly work in Life Insurance, Health Insurance, Property & Casualties Insurance and Pension & Retirement domains


Sources referenced:
http://www.actuariesindia.org/subMenu.aspx?id=4&val=ACET https://www.financewalk.com/actuary-career-path-salary-jobs-exams/ http://www.indiaeducation.net/careercenter/professional-courses/actuarial-science/ https://career.webindia123.com/career/options/accounting_finance/actuarial_science/eligibility.htm https://www.actuaries.org.uk/documents/cera-thought-leaders http://www.actuariesindia.org/Index.aspx?AspxAutoDetectCookieSupport=1 https://www.actuaries.org.uk/practice-areas/risk-management/how-can-i-get-enterprise-risk-management-erm/traditional-career-path