Monday , 25 June 2018

Actuarial science: Playing with numbers

Manu Anand


Actuarial science is the discipline which combines the skills of an economists, statistician and financier to assess the financial impact of an uncertain future and design solutions to minimise the financial severity of such events.

What they do: They create mathematical models to take decisions for the development of financial products. They assess the financial impact of tomorrow by analysing the past and sculpting the future while keeping in mind the risks that are involved. Understand event probability and undertake cost forecasting.

Why this course: The demand for an actuary has changed. Master’s degree in mathematics or statistics and a certificate from Actuarial Society of India can get a seven-figure salary. This is a well-recognised career globally and has worldwide affiliations.

Basic requirements: The course study requires systematic approach to solving problems with devotion, integrity and dedication. One must study probability, finance, statistics and economics.

How to enter this field: The Institute of Actuaries of India (IAI) regulates the education and training of actuaries in India. The Actuarial Society of India and Institute of Actuaries, UK are professional examining bodies which conduct certificate, associateship level and fellowship level examinations and on passing these examinations candidates become eligible to be admitted as an associate member of the society.

Entrance exams: Actuarial science entrance exam, Institute of Actuaries of India entrance exam and Actuarial society of India entrance exam.

Courses available: BSc Actuarial Science, MBA Actuarial Science, MSc Actuarial Science and Post Graduate Diploma in Actuarial Science (PGDAS). Mere completion of such courses does not make one eligible to practice as an actuary.

Actuarial exams by IAI: Students must take 15 subjects while preparing for the actuarial examinations. These subjects are grouped into 100 Series (CT), 200 Series (CA), 300 Series (ST) and 400 Series (SA). There are nine subjects in CT series, three subjects in CA series, six subjects in ST series out of which the student will chose two subjects and six subjects in SA series out of which the student will chose one subject.

Examination centres: The examinations are held every year in the month of May/June and October/November at the following centres: Mumbai, Kolkata, Delhi, Hyderabad, Kanpur, Chennai, Bhopal, Bangalore, Lucknow, Coimbatore and Cuttack.

Eligibility: Candidates should be 18 years of age and have passed 10+2 with at least 85 per cent in mathematics. Graduates or post graduates should have at least 55 per cent marks in mathematics, statistics or economics.  Candidates with CA, CS, CWA, CFA, MBA, engineering and MCA background can also answer the examination.

Duration: There is no fixed duration to complete the course. The aspirant must clear the entrance examination and the 15 subjects prescribed. A student can attempt any number of subjects at a time and in any order.

What they learn: The course study involves application of mathematics and statistical methods that are related to business management and insurance problems. One studies quantitative and non-quantitative risk management, forecasting theory, expansion of risk tables, computer assisted research, secondary data analysis and economic risks in the business sector as well as insurance field.

Top colleges in India: Actuarial Society of India (ASI); Amity School of Actuarial Science, Noida; Annamalai University; Birla Institute of Management Technology; Bishop Heber College, Tiruchirappalli; Christ University,  Bengaluru; College Of Insurance, Mumbai; Delhi University; DS Actuarial Education Services, Mumbai; Ernakulam Insurance Institute; Gurunanak Dev University; Institute of Actuaries of India, Mumbai; Insurance Training Centre, Kolkata; International School of Actuarial Sciences (ISAS), Hyderabad; Kurukshetra University;  Narsee Monjee Institute of Management Studies, Mumbai; The National Insurance Academy, Pune; University of Madras and University of Mumbai.

Certificates in actuarial techniques: A student member becomes eligible to get the Certificate in Actuarial Techniques (CAT) on passing all CT Series subjects. On passing all subjects up to and including ST Series, one becomes eligible to be admitted as an associate member of the society. On passing all the subjects up to and including SA Series one becomes eligible to be admitted as fellow member of the society

Career opportunities: Life insurance, general insurance, health insurance, reinsurance companies, pension funds, consultants, investments, government, academics, risk management, banks, hospitals, project management, employee benefits departments and BPO.

Top recruiters: Max Bupa Health Insurance, WNS, Towers Watson, PwC Actuarial Services India, Mercer, Directorate of Postal Life Insurance, McKinsey Advanced Healthcare Analytics,  IDBI, HDFC Life, HDFC Ergo, AMP Sanmar, Allianz Bajaj, Birla Sun Life, Aviva, ICICI Prudential, ING Vysya, Kotak Mahindra, Max New York, Met Life, SBI, TATA AIG, LIC of India, ICICI Lombard, IFFCO-TOKIO, Royal Sundaram, Cholamandalam, Oriental Insurance, United India Insurance, National Insurance Co,  General Insurance Corporation and New India Assurance Company.

Salary: Stipend for an actuarial trainee per month in India is around `25,000 per month. Actuarial students can expect to start their career with an annual package of anywhere between `4 lakhs to `5 lakhs. After becoming an IAI fellow one can earn anything from `20 lakh to `30 lakh per annum. With experience of more than 10 years, the actuary’s salary can go up to a crore per annum.

Skills required: One should be good at mathematics and statistics, be business savvy and commercially sound with good communication skills, logical, self motivated and have a systematic approach towards problems.

A plus point of actuarial studies is that it can be pursued alongside a full-time job. The profession requires a lot of time and effort but if you like playing with numbers and have the capacity to work hard, there’s nothing that can stop you from achieving your goal.

Director Alpha Mindz

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