How to Become a Actuary

About Actuary

Actuarial is a field of study that deals with the assessment, measurement, and management of financial risks in finance, insurance, and other related industries. Uncertainties are inherent in all businesses. Organizations, on the other hand, must be well-equipped to control and manage such risks as they arise. The role of an actuary—a business professional who is familiar with Actuarial Science—becomes important in this context. Actuarial Science is a feasible and highly rewarding career path for people who want to turn their knowledge of risk evaluation into a full-time job. Risk assessment is a critical component of business management that you can conduct and manage with the assistance of an actuary. Actuaries play an important role in developing business models, evaluating investments, and ensuring that a company's operations can be sustained over time. When businesses take on risk on behalf of their customers, they must be able to make educated guesses about how they will react to various outcomes. 

Actuaries are investment advisors who use their expert knowledge to perform risk assessments and develop plans to mitigate the impact of financial risks. They conduct actuarial science research and case studies to assist businesses and organisations in making financial security and legal responsibility management decisions. Actuaries must have a thorough understanding of math, economics, and computer science, as well as proficiency in calculating probability and interpreting statistics, in order to identify key and minor risk factors and assist businesses in adequately preparing for changing conditions.

Roles and Responsibilities of an Actuary 

Actuaries design, plan, test, and evolve strategic policies using databases, statistical modelling software, and other technological tools. They work with accountants, financial advisors, economists, and market analysis analysts to gain a comprehensive understanding of a company's risks and opportunities. An actuary's role and responsibilities include the following:

• Creating and testing hypotheses about business risk factors
• Data collection and pattern analysis
• Determining the likelihood of various events occurring and predicting the potential consequences
• Investigating common and uncommon risk factors in various industries
• Examining company policies to see how they affect productivity
• Solution-finding for financial risk management
• Individual project risk registers must be completed and updated.
• Justifying their forecasts with market trends and risk assessment theory
• Creating charts and tables to help shareholders and company management understand complex statistics and concepts

Actuaries prioritise different key tasks depending on the industry in which they work. For example, life insurance actuaries design insurance policies based on risk factors such as drug use, age, gender, and style of living. Property insurance actuaries are interested in data about natural disasters and accidents based on their geographical location and the type of assets they insure. Enterprise actuaries are concerned with large-scale issues such as long-term growth plans and how social, political, and economic factors may affect them.

Eligibility to become Actuary

Right from the Class 12, the students must have outstanding skills in Mathematics. People with the good mathematical background will excel in the field of the actuary. Graduate degree in Statistics, Mathematics, Actuarial Science and Finance will open prospects for entry-level jobs in the field of the actuary. Besides pursuing a degree in the field of actuary, students need to upgrade their skills from time to time. The higher-level jobs in the field of actuary can be achieved only through requisite and specialised skills in the field.

Subjects Combination: Students with Mathematics/ Economics/ Commerce as the main subject in Class 12 are eligible to take up Actuarial Science and associated courses like Mathematics and Statistics.

Eligibility:

• For taking up Bachelor’s course in Actuarial Science, Statistics, Mathematics, Finance and associated fields, students must have studied Mathematics/ Economics/ Commerce as the major subjects in Class 12.
• If the students are interested in pursuing a Master’s course in the field of the actuary and associated courses must have a Bachelor’s degree in relevant field.
• For research courses in the field of Actuary, students must have a Master’s degree.
• For master’s and research courses, most universities conduct an entrance exam. Mostly, there is no entrance test for Bachelor’s courses. A few premier institutes conduct entrance for UG level courses.

Steps to Become an Actuary

In order to become an Actuary in India, students must first pass all of the required Actuary exams. The course teaches students how to use statistical and mathematical techniques to solve problems in the insurance, banking, and other financial sectors. School Level Preparation: Aspirants should begin preparing for actuarial courses as soon as they finish 10th grade. If you want to learn Actuary, you must first choose your subject in order to be admitted to this course. As a result, you should major in Science with Physics, Chemistry, and Mathematics, or in Commerce with Mathematics/ Statistics.

Some of the key steps to becoming an Actuary after passing your Class 12th exams are listed below for your convenience.

Preparation at the Undergraduate Level: You can earn a Bachelor's degree in Actuarial Science or a Diploma in Actuarial Science. Many universities, including Christ University, offer a BSc in actuarial science. Aspiring students can take PCM with statistics in class 12 to be eligible for UG level actuarial courses. To seek admission to colleges offering actuarial courses, aspirants must take the Actuarial Common Entrance Test, which is administered by IAI.

Post-Graduate Level Preparation: After having completed an undergraduate degree, a candidate can pursue post-graduate studies in the field of actuarial science. Aspirants can study for an MSc in Actuarial Science or an MBA in Actuarial Science. A bachelor's degree in actuarial science or a similar field from a recognised university is required for admission to PG level courses in actuarial science. After meeting the eligibility requirements, aspirants must take an actuarial entrance exam or a management entrance exam if pursuing an MBA in actuarial science.

Types of Job Roles Actuary

Actuaries are required for diverse jobs. The following are some of the job profiles that Actuaries can take up after obtaining the necessary skills.

Property and Casualty Insurance Actuaries: These actuaries play a vital role in developing insurance policies that insure the policyholders against the property loss and liabilities resulting from fires, natural disasters, accidents and other calamities.

Pension and Retirement Actuaries: These actuaries play a dominant role in assessing and evaluating the current pension plans and frames future pension plans. They determine whether the company will have sufficient funds in the future to pay off employee pension and other retirement benefits.

Health Insurance Actuaries: These actuaries analyse the life expectancy of a person based on his/ her current medical health, previous health record, occupation, genetic history and geographical location. These factors will help the health insurance actuaries to determine the expected cost of a assured health policy and cost of the organisation for health policy adherence towards long-term and short-term medical expenses.

Life Insurance Actuaries: These actuaries analyse the life expectancy of a person based on high-risk factors such as health status, current age and gender. On the basis of the analysis, these actuaries develop insurance programmes for individuals and groups.

Employment Opportunities for Actuaries:

Actuaries have a good scope to get employment opportunities in the government and private sector. Actuaries are required in the following sectors: -

• Employee Benefits Departments
• Large Corporations
• Government Departments
• Consulting Firms
• Investment Firms
• Hospitals
• Accounting
• Finance
• Underwriting
• Insurance Companies

Top Recruiting Agencies for Actuaries:

Some of the top companies and industries require skilled Actuaries for various positions. The list of top recruiting companies for Actuaries can be checked below.

• Fortis Insurance
• Allianz Cornhill
• Brit Insurance
• Irish Life
• Bartlett Actuarial Services
• Deloitte
• Brian Watson Associates
• HDFC
• Cartwright Consulting
• Zurich Financial Services

Skills Required by an Actuary 

Actuaries should also have the following skills to be the best:

• Analytical Skills: Actuaries use analytical skills to identify patterns and trends in large amounts of data in order to determine the factors that influence certain types of events
• Communication Skills: Actuaries must be able to explain complex technical topics to people who do not have an actuarial background. They must also clearly communicate their work and recommendations through reports and memos
• Computer Skills: Actuaries must be familiar with programming languages and have the ability to use and create spreadsheets, databases, and statistical analysis tools
• Interpersonal Skills: Actuaries serve as leaders and team members, so they must be able to listen to other people's ideas and suggestions before coming to a decision
• Math Skill: Actuaries use calculus, statistics, and probability principles to quantify risk.
• Problem-solving Skills: Actuaries recognise risks and develop risk management strategies for businesses

Pay Scale/Salary of Actuary

Actuaries in diverse sectors earn a satisfactory salary. Most companies pay more for highly skilled and experienced Actuaries. The average salary structure of Actuaries is detailed below.

Note: The above figures are an estimate and may vary from individual to individual and company to company.

Career Scope of an Actuary 

Actuaries are primarily employed by both insurance and reinsurance companies. They can also work as consultants for businesses, banks, financial consulting firms, actuarial consulting firms, the government sector, pension plans, investor advisories, and academic institutions. PwC Actuarial Services India, Max Bupa Insurance, Milliman, IDBI, and many other top companies hire Actuaries. Actuaries are responsible for assessing the risks associated with new policies, capital, and resource allocation. In India, an Actuary can earn between 4 lakhs and 20 lakhs per year, based on their degree of experience and expertise. Furthermore, depending on the corporation for which the employee provides his or her services, they are granted various perks and benefits such as health insurance, apartment, and travel benefits.

Benefits of Working as an Actuary

As you may be aware, this is one of the highest-paying jobs in recent history. As a result, there are numerous advantages to working as an Actuary.

• Good Salary Package: Every year, you can earn a good salary plus a bonus. At the moment, the lowest salary in an actuarial job is INR 5-7 lakh per year, the highest salary is INR 15-30 lakh per year, and the average salary is INR 8-15 lakh per year
• Job Security: There is financial security in this career field because they are primarily responsible for analysing data and assessing risk for finance, insurance, corporate, and investment management firms, among others
• Positive Career Impact: As you may have guessed, this career has a good salary package, job security, work-life balance, and so on
• Unique Experience: Working in different positions as an Actuary provides a unique experience. Even though the job is difficult, if one is interested, he or she can pursue a career as an actuary

Books & Study Material to Become Actuary

Actuaries and future aspirants can refer some of the books listed below to prepare for entrance exams and enhance knowledge.

• Actuaries Survival Guide by Fred Szabo
• Achieving Your Pinnacle by Tom Miller
• Actuary Career by Anne Johnson
• Actuarial Mathematics by Newton L. Bowers, Hans U. Gerber, James C. Hickman, Donald A. Jones & Cecil J. Nesbitt
• Understanding the Insurance Industry by AM Best Company
• Practice Risk Theories for Actuaries by C.D. Daykin, T. Pentikainen & Martti Pesonen
• Actuarial Science – An Elementary Manual by Glen Ninian

Pros of becoming a Actuary

• A career in actuary has great earning potential and rate of growth.
• This career has a great scope to incorporate multiple disciplines.

Cons of becoming a Actuary

• Sometimes, Actuaries have more work pressure.
• More dependent on computer programmes.