Importance and responsibility with the profession of an Actuary

An actuary is a professional working in the insurance sector who assess the financial impact of an uncertain future event and predict to a certain degree of correctness as to what amount of money a policy holder should pay as premium or what sum should be given as pension amount or returns by the company in case of any disaster to the policy holder. In a sense they have the responsibility of calculating insurance risks and premiums with their expertise and skills as a statistician, economist and financier and employ scientific and mathematical techniques of probability, compound interest, law, marketing, management etc to predict the outcome of future contingencies and formulate solutions to rationalize the financial severity of such events. Although this profession is in existence since 1848 when institute of actuaries was established in London, but initially it was limited to the Life insurance only but now with the opening up of the world trade and globalization these professionals are sought after by non-life insurance organisations too like banks, stock exchange etc. Because of globalization this in one of the profession in which demand for the experts is far lagging being it supply. Thus the importance of the Actuary has been increasing at fast pace. The work of an actuary involves a lot of number crunching and the nature of work is quite demanding both physically and mentally, nevertheless it offers rewards in terms of intellectual challenge, status, financial returns and above all job satisfaction in return of all the hard work and dedication one has to put in doing this work. As their judgment is the basis of decision making for many business activities, their career paths more often than not lead to upper management and executive positions but to reach at the apex the aspirants has to accomplish his work in a better manner. For that one should be hard working and dedicated the job of an Actuary demands intensive foresight and inside depth of the field one is working in. For this one should have the capacity to work hard with commitment, open mind and honesty. Thus to do his work most effectively he requires special training which can be acquired by doing the required courses. To be an Actuary one has to follow the below given path.

Eligibility to be an Actuary

1. Educational Qualification
A person is eligible to be considered for admission as a student member if he/she satisfies one of the following criteria.
1. Should have passed 10+2(HSC) or equivalent with at least 85% in Mathematics/ Statistics
2. Graduates or Post Graduate with not less than 55% marks in Mathematical subjects (i.e Mathematics or any of its branches; Statistics or any of its sub classifications such as Mathematical Statistics and Applied Statistics; Econometrics; Computer Sciences; Any discipline of Engineering; Subject in Science such as Physics or its branches).
3. Candidates with CA/ CS/ CWA/ MBA (Finance)/ PGDBA
4. Fully qualified members of professional bodies such as the Institute of Chartered Accountants of India (ICAI), The institute of Cost and Works Accountants of India (ICWAI) and Certified institute of Financial Analysts of India (IFAI) and Fellow of Insurance Institute of India (III)- passing with the subjects Mathematical Basis of Insurance and Statistics
5. A student member of actuarial bodies such as Institute of Actuaries, London; Faculty of Actuaries in Scotland and Institute of Actuaries, Australia
6. Students from Society of Actuaries, USA and Casualty Actuarial society, USA , provided that they must have passed at least one subject from these bodies.

2. Age
18 years

Process to be an Actuary
To be an Actuary one has to follow the below given steps:-
Step 1
To become an Actuary, one needs to take up a course including 15 subjects with 14 compulsory and 1 optional subjects of a given list of subjects. These subjects are grouped into 100 Series (CT), 200 Series (CA), 300 Series (ST) and 400 Series (SA).

1.The subjects in CT Series cover Mathematical, statistical, economic and financial techniques, which are applicable internationally.

There are 9 Subjects in CT series that are listed below:-
CT series (Core Technical Stage)
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 -Economics
CT8 -Financial Economics
CT9-Business Awareness Module

2. The CA series contains a question of general actuarial interest and aims to test communication skills of the students

There are 3 Subjects in CA series that are listed below:-
CA series (Core Applications Concepts)
CA1-Core Applications concepts consisting of assets and liabilities
CA2-Modelling,
CA3-Communications

3.The ST Series cover investment, Life-Insurance, General Insurance and Pensions and other employment benefits

There are 6 Subjects in ST series that are listed below:-
ST series (Specialist Technical Stage)- Any two subjects
ST1-Health & care Insurance
ST2-Life Insurance
ST3-General Insurance
ST4-Pension & other employee benefit
ST5-Finance & Investment A
ST6-Finance and Investment B

4. The SA Series subjects focus on the practical application of the Principles covered in the corresponding ST Series subjects and earlier subjects.

There are 6 Subjects in SA series that are listed below:-
SA series (Specialist Application Stage) Any One Subject
SA1-Health & Care
SA2-Life Insurance
SA3-General Insurance
SA4-Pension & other Employee Benefit
SA5-Finance
SA6-Investment

Step 2
Certificates in Actuarial Techniques
A student member becomes eligible to get the Certificate in Actuarial Techniques (CAT) on passing all the CT Series subjects.
A student on passing all the subjects up to and including ST Series becomes eligible to be admitted as an Associate Member of the society and can use AASI against his/her name as a registered actuary.

Step 3
A student on passing all the subjects including SA Series and upon satisfying the other criteria specified for the purpose becomes eligible to be admitted as Fellow member of the Society and can use FASI against his/her name as a recognized fellow.

Duration of completion of the Course
There is no fixed duration to complete the course. The aspirant has to clear the Entrance Examination and the 15 subjects prescribed. A student can attempt any number of subjects at a time and in any order.
However, it is a better option to take the subjects in the numerical sequence in which these are numbered and not more than two or three at a time.

Test Centers
The examinations are held every year in the months of May/June and October/November at the following given centers.
In India: Mumbai, Kolkata, Delhi, Hyderabad, Kanpur, Chennai, Bhopal, Bangalore, Lucknow, Coimbatore and Cuttack.

Outside India: Dhaka (Bangladesh), Colombo (Sri Lanka) and Port Louis (Mauritius)
Note: - Candidates who wish to appear from Overseas centers should make a formal request to IAI.

Scope and remunerations of these professionals

Area of Scope
Because of globalization of the economic activities the importance and scope of these professional has increased many folds. Actuaries have scope for career growth not only in India but also in some of the well developed overseas countries like USA, UK, Canada and Australia etc to name a few of them. Some of the potential employers of these professionals in corporate sector( both private and public) are :
In the field of Life Insurance
1. AMP Sanmar Life Insurance CoLtd;
2. Allianz Bajaj Life Insurance Co. Ltd;
3. Birla Sun Life (Distributor Co Ltd);
4. Aviva Life Insurance Co Ltd.;
5 HDFC Standard Life Insurance Co Ltd.;
6. ICICI Prudential Life Insurance Co Ltd.;
7.ING Vysya Life insurance Co Ltd;
8. Om Kotak Mahindra Life Insurance Co Ltd.;
9. Max New York Life Insurance Co Ltd.;
10. Met Life Insurance Co Ltd.;
11. SBI Life Insurance Co LTD;
12. TATA AIG Life Insurance Co Ltd;
13. Life insurance Corporation (India’s first and the biggest government sector Life insurance corporation)
Non-Life Insurance
1. Bajaj Allianz;
2. HDFC Chhub GIC ltd;
3. ICICI Lombard General Insurance Co Ltd;
4. IFFCO-TOKIO General Insurance Co Ltd.;
5. Reliance GIF;
6. Royal Sundaram GIC;
7. Cholamandalam GIC;
8. TATA AIG;
9. Oriental Insurance;
10. United India Insurance.;
11. National Insurance Co;
12. General Insurance Corporation;
13. New India Assurance Company

Actuarial Apprentices with LIC
The Life Insurance Corporation of India takes in candidates(on the bases of a written selection test) who are Graduates/ Postgraduates with Mathematics and Statistics as main subjects with 60% or more marks in aggregate and coming in the age-group 18-25 years.

Contents of Selection Test
Paper I includes Essay Writing (Hindi or English) and
Paper II comprising of Mathematics or Statistics or Actuarial Science.
Candidates who have passed one or more examination of the ASI or Institute of Actuaries (London) or those having PG Diploma in Actuarial Science with more than 50% marks in aggregate are exempted from appearing for the exams.

Remunerations
Because of the global demand of the Actuaries and supply being far less than the demand these professional can bargain for hefty pay packages from their employers.On this bases along this profession is rated as one of the best in the US economy. In India too with the opening up of the financial and insurance sector for the private players the trend is picking up. Stipend for an actuarial trainee per month in India is around Rs 25,000 per month. Whereas experienced and qualified professionals can demand salary packets ranging from 8 lacs per annum for beginners to around 40 lacs per annum for those in senior positions.