How to become an Actuary?

Who is Actuary?

Actuaries are defined by the Institute of Actuaries of India as a person qualified to calculate financial and commercial impact and valuation of uncertainty and risk of future events by using advanced techniques and models based on future scenarios under financial, economic, social, demographic, technology and probabilistic situations.

Knowledge and Skill Required:

Actuaries are expected to have statistical, mathematical and financial skill to use various models in understanding the various risk factors and quantifying them. They are also expected to haver goods understanding of economic, financial, demographic and insurance risks. They are the only ones who values both the Asset and the liability part for an insurance company or a financial or banking projects as well as values the future liability.

Actuaries identifies, analyse and put a price on various risks. They work in an environment of uncertainty from all angles: regulations, data, market, behaviour, and uses theory of probabilities based statistical or mathematical models and models a strategy.

Expected Employer:

They are experts in risk management and are employed in various industries, including insurance, finance, healthcare, and more. Actuaries in India typically works in the following fields.

Major employers are Insurance Companies, government, banks, investment firms, labor unions, college or university, or an accounting firm.

• Life Insurance, General Insurance and Health Insurance
• Casualty/Disability
• Reinsurance
• Pension Funds
• Consulting
• Investments (rarely as it is dominated by other profession)
• Government
• Retirement
• Big 4 and other Audit Firms
• Risk Management

Scope

In a population of 1.4 billion there are only 569 Fellow and 231 Associate Actuaries in India as on October 2023. Qualifying as an actuary in India is tough enough and only the most skilled professionals clear all the levels of qualification examination. The industry is therefore facing a resource crunch for highly qualified actuaries. The expected opportunities for actuaries over the next ten years are expected to be, on average, 2,500 to 3,000 actuaries.

Also, with the invent of data science and analytics, the scope of work and opportunities (beyond the historical insurance sector) are increasing day by day.

The scope of actuarial science in India is bright.

Typical Job Profile:

• use mathematical modelling techniques and statistical concepts to determine and assess risks, for example, analysing pension scheme liabilities to price commercial insurance and its probability.
• analyse statistical data in order to make calculations, for example, accident rates for particular groups of people;
• To develop new financial products/insurance product
• prepare presentations, reports, valuations and quarterly updates
• monitor risk within trading positions in investment banking to ensure excessive risks are not taken during the fast pace of trading
• present reports, explaining their implications to managers and directors and advising on risk limitation
• work with IT professionals to develop systems to ensure compliance with the requirements of regulatory bodies
• work on mergers and acquisitions.

Expected Salary/Income :

A newly qualified actuary can expect to start his/her carrier at Rs. 15 to Rs. 20 lakhs p.a. The salary of experienced actuaries is quite higher and may go beyond Rs. 100 Lacs.

A semi or half qualified Actuarial students can expect to start his/her career with package of anywhere between Rs. 5 to Rs. 6 lakhs.

Qualification required:

Actuaries are required to acquire theoretical and practical knowledge in actuarial science. The Institute of Actuaries of India (IAI) (a statutory body established under an act of Parliament) regulates the education & training of actuaries in India.

Acquiring the qualification as an actuary in India is tough and only the most skilled professionals clear all the levels.

An aspirant who wishes to become a qualified Actuary in India need to register himself as a student member of the Institute and then has to clear 13 subjects to attain Associateship and/or fellowship.

How to pursue the Course:

Entrance Criteria:

The Minimum entrance qualification required is 10+2(H.S.C) or equivalent.

However, a candidate with strong skills in Mathematics, Statistics, Data Analytics and Finance with good analytical skills, logical reasoning coupled with willingness to put hard work continuously to learn and pass all subjects of actuarial examinations can be an ideal candidate

As such a Graduate or Post Graduate in Mathematics, Statistics, Economics, Computer Science, Engineering, MBA (Finance) and other similar qualifications or qualified members of professional bodies like The Institute of Chartered Accountants of India, Institute of Company Secretaries of India, The Institute of Cost and Works Accountants of India, CFA, Fellow of Insurance Institute of India will be highly relevant for this course.

Course materials

The course requires consistent efforts, dedication and strong will to attain fellowship. Typically, the study route involves clearing the following :

• First Group: 7 Core Principles Papers (CS1, CS2, CM1, CM2, CB1, CB2 and CB3)
• Second Group: 3 Core Principles Papers (CP1, CP2 and CP3)
• The Next Group: Specialist Principles (SP) Papers; (SP1 to SP9)
• Final Group: Specialist Advance (SA) Papers. (SA1 to SA7)

The education model, is based on a combination of work with its application. Substantially, all these educations after series subjects take place in the work environment itself. The success in examinations is based on and associated with the corresponding work experience and insight, thus gained.

Student Members who passed the above 4 groups, becomes an Associate Member of the Institute and use the letters "AIAI" after his name to indicate that he is an Associate. Any Associate member of the Institute who successfully completes the India Fellowship Seminar along with a minimum of 3 years of Actuarial Experience shall be admitted as a Fellow of Institute of Actuaries of India and is entitled to use the letters "FIAI" after his name to indicate that he is a Fellow.

Entrance to IAI:

You can join the Actuary Qualification Course in India by clearing their Actuarial Common Entrance Test (ACET) exam. ACET is a computer-based exam that is usually conducted twice every year – in the months of June and December. ACET is a 3-hour exam and consists of 70 multiple-choice questions (MCQs). The total marks for 70 questions are 100. The breakup of questions and marks is:

• 45 questions – 1 mark each.
• 20 questions – 2 marks each.
• 05 questions – 3 marks each.

There will not be any negative marking for incorrect answers. Pass mark for ACET Examination is 50%.

The core subject for ACET exam is:

• Mathematics – 30 marks
• Statistics – 30 marks
• English – 15 marks
• Data Interpretation – 15 marks
• Logical Reasoning – 10 marks

How to register for the exam?

• Step 1 - Go to IAI website and sign-up at Acet_register_form
• Step 2 - Fill up the online registration form and make the payment online. Before you make the payment, make sure all your details are correct because no subsequent changes would be possible thereafter.
• Step 3 - On successful completion of payment, you will also receive an e-mail at your registered e-mail address confirming your registration and successful payment. (Inform us immediately, in case, you do not receive it). Kindly take a printout of your ACET online Registration Form.

Cost

The registration fee for the entrance exam ₹. 3,000 (three thousand only). This covers the cost of one Sample Question Paper, Indicative Solution and Online Exam. The registration fee once paid is neither refundable nor can it be carried forward for the next ACET.

Are actuarial jobs confined only to the insurance sector?

Not really, while majority of actuaries do work in insurance sector, there are lots of other places where they are employed.

They are employed (or retained) by Insurance companies because of IRDA Regulations that requires every insurance company to have a qualified and experienced Actuary. Some valuation and statements in Insurance companies have to be certified by an actuary.

With the spurt of data analytics and its demand in all businesses, an actuary with sound and applied knowledge of statistics can solve various business problems by exploiting data, can find employment in many sectors like marketing/advertising, gambling, casino etc.

For more information please visit: https://actuariesindia.org/