Actuarial science is the discipline that applies mathematical and statistical methods to assess risk in insurance, finance, and other professions and industries. It became a formal mathematical discipline in the late 17th century with the increased demand for long-term insurance coverage. William Morgan is known as the father of modern actuarial science. Those professionals who get trained in this discipline are called actuaries.
Actuarial analysis involves developing financial projections, cost-benefit analyses, and insurance plans. Actuarial analysts can work in a variety of industries but are mainly employed in the financial services and insurance sectors. This is a highly analytical role, requiring a great deal of data assessment and a keen understanding of probability and risk mitigation.
Actuarial consultant applies the extensive use of statistics, contingency plans, and large amounts of data to formulate a plan best suited to the client. They calculate and analyze the data, make forecasts, provide the most accurate information to clients and help them realize what there best options are. The purpose of actuarial valuation is to calculate the ‘ Present Value’ of payments that would be made to employees in future as part of an employee benefit plan.
Most actuaries love being an actuary because it allows them to use their talents and have a meaningful positive impact. There are other great reasons to consider a career as an actuary.
1. Actuary has consistently been rated one of the top jobs in the United States.
2. Actuaries earn great stating salaries that can double within first five years.
3. Students can get jobs even after clearing 3 or 4 actuarial exams.
4. Companies also support their employees for actuarial exams. Employees get incentives on passing each exam.
5. Actuaries enjoy certainty in uncertain times. They are always in demand as the world confronts risk.
6. Actuaries participate in high-level business decision making and solve real problems in every industry.
7. More than a fulfilling career,being an actuary allows you to maintain a low-stress, highly sought after work/life balance.
The eligibility criterion for pursuing actuarial career is that the candidate must have passed 10+2 exam. Then he/she must clear ACET exam to take the membership of the Institute of Actuaries of India(IAI). Many universities have undergraduate and graduate degree programs in actuarial science. IAI conducts the actuarial exams in various cities in India. Actuarial exams are divided into 2 types namely, written and practical.
Stage 1: Core Principles
CS1 Actuarial Statistics
CS2 Risk Modelling and Survival analysis
CM1 Actuarial Mathematics
CM2 Financial Engineering and Loss reserving
CB1 Business Finance
CB2 Business Economics
CB3 Business Management
Stage 2: Core Practices
CP1 Actuarial Practice
CP2 Modelling Practice
CP3 Communications Practice
Stage 3: Specialist Principles
Choice is introduced at this stage. The student will choose two subjects from the 8 subjects offered
SP1 Health and Care
SP2 Life Insurance
SP4 Pension and other benefits
SP5 Investment and Finance
SP6 Financial Derivatives
SP7 General Insurance Reserving and Capital modelling
SP8 General Insurance-Pricing
Stage 4: Specialist Advanced
The final stage of exams is one specialist subject chosen from
SA1 Health and Care
SA2 Life Insurance
SA3 General Insurance
SA4 Pension and other benefits
SA7 Investment and Finance
So there are total 13 exams to be qualified as an actuary. However, Indian students can also take membership of the Institute and Faculty of Actuaries(IFoA).
The insurance industry can’t function without actuaries. Private corporations rely on risk evaluation by actuaries. Actuaries help companies in designing pension and benefit plans, evaluate assets and liabilities, and stare down risk. They also work for the government too, helping manage its programs and overseeing public companies to ensure compliance with regulatory laws.
Important note: Students should start searching for actuarial jobs after clearing 2 or 3 exams. After joining the job, they can continue clearing the remaining Actuarial exams.
For further information, you can visit the website of the Institute of Actuaries of India www.actuariesindia.org