What is actuarial science?

Actuarial science is built on the statistical evaluation of the financial and economic implications of possible contingencies. The science essentially deals with calculation of insurance risks and premiums. It is built on the statistical evaluations of the financial, economic and other implications of future contingent events.

An actuary is a business professional who analyses the financial consequences of risk. Actuaries use mathematics, statistics and financial theory to study uncertain future events, especially those concerning insurance and pension programmes. In developed countries, actuarial techniques are also used to appraise capital projects.

Actuaries, by virtue of their analytical and incisive outlook, can make significant contributions in the fields like Demography, Social Welfare, etc. An Actuary can be the cerebral center of any financial sector. Actuarial skills are valuable for any business managing financial projects, both in the public as well as private sector.

Career as an Actuary? Why?

Of the multiple career options available today, a career in actuarial science stands out in many aspects. It is highly rewarding and challenging. This profession offers you rewards in terms of intellectual challenge, status, job satisfaction and earnings. As the key technical persons in any insurance company, actuaries are globally in demand and command hefty salaries and perks.

A degree in Actuarial Science is globally recognized and provides a zero unemployment profession. The Actuarial profession-.has constantly been rated as one of the top four jobs in United States for the last 15 years by Almanac magazine USA.

In a fast-changing world, with new risks and the need for more creative ways to tackle these, there is a tremendous opportunity for professional growth in an actuarial career and the pleasure of life-long learning.

Actuaries provide professional services in a wide range of business and social contexts.

Career prospects in India and abroad

The Life Insurance Corporation of India is the primary employer of actuaries and actuarial students. Outside of LIC, the GIC, foreign banks, Government, and others also employ a few professionals. Some actuaries set up their own consultancy firms, mainly advising companies on gratuity and retirement benefit schemes.

The opening up of the insurance sector in India has changed the entire scenario. Corporate groups setting up insurance companies with foreign tie-ups have created a huge demand for actuaries. Future prospects are excellent since the demand for actuarial professionals at all levels is well above the supply. This sector will be requiring around three lakh professionals by 2007.

An actuary has an unlimited scope in countries outside India where the necessary infrastructure already exists to absorb him in suitable avenues like Life and General Insurance, Operations Research, Statistics, Investment, Demography, etc.

Nature of work

The work of an actuary involves the calculation of insurance risk, premiums and pension programmes. A ctuaries add value by enablin g businesses and individuals to make better-informed decisions, with a clearer view of the likely range of financial outcomes from different future events.

The actuary's skills in analysis and modeling of problems in finance, risk management and product design are used extensively in the areas of insurance, pensions, investment and more recently in wider fields such as project management, banking and health care. Within these industries, actuaries perform a wide variety of roles such as design and pricing of product, financial management and corporate planning. Actuaries are invariably involved in the overall management of insurance companies and pension, gratuity and other employee benefit funds schemes; they have statutory roles in insurance schemes sponsored by government.

Pre-requisites for an actuarial career

A strong ability and liking for numbers is essential for those considering an actuarial career. A sound understanding of the business environment, economics, finance and accounts is also essential. Good communication skills and good computer skills are other requirements.

Single-minded devotion, total dedication and a systematic bent of mind are the other qualities that are required. Finally, together with professional rigour, a sound commercial approach to decision-making is important.

The actuary has a legal responsibility to safeguard the financial interests of the public. The profession’s code of conduct demands the highest standards of personal integrity from its members.

Courses

In India, the professional body of actuaries is the Actuarial Society of India (ASI). It conducts examinations leading to the actuarial qualification – Associate and later Fellowship of the Society. A person who wants to be an actuary has to pass an entrance exam conducted by the Actuarial Society of India (ASI). It is recognized in India as well as in South East Asia and Africa.

Along with ASI a number of institutes today are offering courses in actuarial science. Apart from that, courses from the Institute of Actuaries, London and Australia are also recognized in India.

Actuarial Science is mainly offered as a three-year degree course by some universities, or as one of the subjects of a degree programme. There are also short-term courses in insurance or actuarial science, ranging from six months to two years.

Eligibility

Institutions

Employment opportunities

The actuaries and actuarial trainees are employed by the following national and international organization: ­

In addition to the above, employment opportunities are expected to arise in future in the offices of: