Do you ever wonder how designs insurance policies for insurance companies? They are the actuaries who design the insurance policies. Just imagine how fascinating the job of an Actuary is.
The Actuary has to analyze lots of data and predict the future. They design insurance policies based on these predictions. If you are someone who likes to analyze data then becoming an Actuary might be a dream job for you.
Becoming an actuary is the best career option for you if you are good at analysis. In this article, we are going to deep dive into the field of actuarial sciences.
What is Actuarial Science?
Actuarial science is the branch of science that uses applied mathematics, statistics, and Probability principles to access the risk of companies belonging to insurance, finance, and other industries.
Actuarial Science also includes several different subjects like finance, economics, and computer science.
What did you mean by actuaries?
An individual who had pursued a minimum Bachelor’s degree in Actuarial Science is called an actuary. An actuary is a problem solver of an organization. They are the ones who analyze the past data and predict the future and also access the risk.
These are the people who create different insurance policies for insurance companies. Just imagine how curial role does actuaries plays for insurance companies.
Actuaries also work for the government and industries other than the insurance industry for future planning.
Why to Choose Actuary as a career?
Actuaries are in demand in almost every country. But in India, there is a huge gap between the demand and supply of actuaries. We have a population of 138 crores but we currently only have around 460 actuaries.
So you can see the potential of being an actuary. According to the U.S Bureau of Labor Statistics, the Employment Projections program around 30,000 jobs will be produced in the field of actuarial science by 2028.
All the above mention facts are enough to answer the question of why should you choose an actuary as a career?
Required Skillsets to become an Actuary:-
1. Analytical Problem Solving skills:-
As I had said, actuaries are the problem solvers. They have to analyze the complex data and figure out the factors that are creating problems for the companies.
An actuary also tries to identify the significance of each factor. After this, they try to find the to minimize the problem. To do so an actuary should have excellent analytical problem-solving skills.
2. Mathematical skills:-
An actuary has to deal with numbers and complex mathematical problems every day. Having great mathematical skills is very important in the field of actuarial science because mathematics, statistic, and probability are the core subject of it.
An actuary should also know calculus since the predictions are done using it.
3. Knowledge of Business and finance:-
Since the main job of the actuaries is to solve the problems of the business and for that, they should have a deep understanding of the business.
The actuaries mostly work for the business belonging to the finance industries. They have to advise the business on how to limit the financial risk. Due to this, it is very curial for an actuary to have good knowledge of business and finance.
4. Computer skills:-
Nowadays analyzing data manually is nearly impossible because of the size of data. You need computers to do that for you, and so do Actuaries.
An actuary should have excellent knowledge of computers. They should also know programming languages like python, ruby, etc to perform the different operations on data.
5. Communication and interpersonal skills:-
Actuaries often have to work with people from different departments like programmers, accountants, etc so to work effectively with them they should have good communication skills.
Actuaries have to make future strategies for the business. Let’s say you are an actuary working for an insurance company you had made a brilliant insurance policy that can boost the company.
But you fail to explain your policy to the management and they reject it. So an actuary needs to communicate his/her strategies in an effective way.
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Types of Actuary:-
There are in total 12 different actuaries that are employed by various industries. The Insurance industry is the top recruiter of actuaries.
1. Life Insurance Actuary:-
Life Insurance Actuary is one of the most common actuaries. They work for insurance companies that provide products like life insurance and term life insurance.
A job of a life insurance Actuary is to help the insurance company properly price the premium of life insurance and term life insurance. They use a metric called mortality rate to determine the percentage of people that will die in any given year.
The mortality rate depends on different factors like age, medical history, and habits that affect health like smoking, etc. This mortality rate help actuaries price the premium of different policies.
A person who is likely to live longer has to pay a lower premium compared to a person who is likely to live less.
2. Health insurance actuary:-
Health insurance actuaries work with health insurance companies. They help the health insurance companies to predict the actual cost of the healthcare covered under insurance.
They do these predictions based on the factors like family history, occupation, geographical location, demographics, lapse rate, claim frequency, etc.
This type of actuary uses a lot of data for analysis and the majority of the data is collected from existing policyholders.
3. Pension Actuary:-
A retired employee gets a monthly pension either from the organization he/she had retired from or any pension plans he/she had enrolled for. Did you ever tried to find who makes this pensions plans, you guess it right pension actuaries are the ones who create these plans.
While creating these plans they consider different factors like disability, death, and termination of employment.
4. Property And Casualty Actuary:-
Property and casualty actuaries work for general insurance companies. They help them to design the insurance policies that insure against property loss and liabilities resulting from accidents, natural disasters, or any other event.
This type of actuaries has to analyze the risk from climate change, ride change, automated vehicles, etc.
5. Enterprise Risk Management actuary:-
The task of Enterprise Risk Management actuaries is to identify the risks faced by the organization, analyze them, measure the financial impact of the risk, and find out effective solutions to minimize the risk.
This type of actuary work for companies from different industries. They play a crucial role for the companies since they are the ones who are protecting them from huge losses.
6. Investment Actuary:-
This type of actuary manages investments. They manage it directly or advise the organization or individual on how to manage investments.
Investment actuaries work in different areas like investment banking, investment consulting, and retail financial advice. This type of actuary should have very good analytical skills and a deep understanding of financial markets.
7. Finance Actuary:-
The main task of the financial actuary is to analyze the data and reduce the financial risk of the companies. Finance actuaries work in different areas like Corporate finance, mergers and acquisitions, capital management, and financial reporting.
8. Pricing Actuary:-
Pricing Actuaries are the ones who decide the right price of the products for financial companies or insurance companies.
To do profitable product pricing they have to collect and analyze statistical data to determine the claim payout in event of death, serious injury, property loss, or any other type of casualties.
9. Valuation Actuary:-
Any insurance company should have enough reserves to pay for the expenses and claims that will be due in the future.
Valuation Actuaries are the ones who calculate the reserves for insurance companies. The main job of Valuation Actuaries is to ensure enough reserves and also to create a source of income for companies.
They also calculate the valuation of companies while mergers and acquisitions.
10. Reinsurance Pricing Actuary:-
The role of the Reinsurance Pricing Actuaries is the same as the role of Pricing Actuaries. The only difference is that Reinsurance Pricing Actuaries prices the products for reinsurance companies while Pricing Actuaries does it for insurance companies.
11. Corporate Actuary:-
The corporate Actuaries work for corporates and they are mostly responsible for product development, financial reporting, and valuation. They are also involved in corporate mergers and acquisitions.
12. Forensic Actuary:-
The role of a Forensic Actuary is to provide litigation support in Insurance and Reinsurance cases. They are responsible to resolve disputes for insurance policies or reinsurance contracts.
If you want to know more about the above mention types click here.
I think now you have a good understanding of what is an actuary and its type so now let’s see what are the steps to become one.
How to become an Actuary in India?
Becoming Actuary in India is not an easy task you need to have intense determination to achieve your goal. You can start preparing for an actuary right after your 10th.
You should select a science stream with Physics, Chemistry, and Mathematics or Commerce stream with Mathematics or statistics.
After the 12th you should go for B.Sc in Actuarial Science. If you want to do further studies you can go for M.Sc in Actuarial Science, PG Diploma in Actuarial Science, or MBA in Actuarial Science.
B.Sc in Actuarial Science:-
| Particulars | Details |
| Course duration | 3 Years |
| eligibility | 10+2 in science with PCM or commerce with Mathematics and Statistics |
| Admission process | The admissions are done through the entrance exams. Some colleges also give admissions on a merit basis. |
M.Sc in Actuarial Science:-
| Particulars | Details |
| Course duration | 2 years |
| eligibility | The candidate must have a bachelor’s degree in Actuarial Science or in science or commerce with Mathematics/statistics. |
| Admission process | The admissions are done through an entrance exam. |
PG Diploma in Actuarial Science:-
| Particulars | Details |
| Course duration | 1-year |
| eligibility | The candidate must have a bachelor’s degree in Mathematics/statistics. |
| Admission Process | The admissions are done through the CMAT entrance exams. Some colleges also give admissions on a merit basis. |
MBA in Actuarial Science:-
| Particulars | Details |
| Course duration | 2 years |
| eligibility | The candidate must have a bachelor’s degree. |
| Admission Process | Through entrance exams like CMAT or CAT |
Actuarial Common Entrance Test:-
The actuarial Common Entrance Test is conducted by the IAI (Institute of Actuaries of India). The admissions for B.Sc and M.Sc in Actuarial Science are done through this exam.
This Exam is conducted three times a year. They are conducted in the months of January, March, and June.
Details for January Session:-
| Particulars | Details |
| Application Date | Oct-Dec 2021 |
| Admit Card Release Date | Dec 2021 |
| Date of Exam | The second week of Jan 2022 |
| Date of Results | Third week of Jan 2022 |
Details for March Session:-
| Particulars | Details |
| Application Date | Jan-Mar 2022 |
| Admit Card Release Date | Mar 2022 |
| Date of Exam | Last week of Mar 2022 |
| Date of Results | The first week of April 2022 |
Details for June Session:-
| Particulars | Details |
| Application Date | Apr-Jun 2022 |
| Admit Card Release Date | Jun 2022 |
| Date of Exam | Fourth week of Jun 2022 |
| Date of Results | The first week of July 2022 |
Salary of an Actuary:-
The salary depends upon various aspects like experience, types of actuary, industry, sector, etc. But I can give you a rough estimate.
| Experience | Salary |
| Fresher | INR 5,00,000 per annum |
| Experienced | INR 15,00,000 per annum |
Top 6 institutes in India that offer courses in Actuarial Science:-
| Institute | Courses |
| BISHOP HEBER COLLEGE – [BHC], TIRUCHIRAPPALLI | B.Sc and M.Sc in Actuarial Science. |
| AMITY UNIVERSITY, NOIDA | B.Sc and M.Sc in Actuarial Science. |
| YCMOU NASHIK | B.Sc and M.Sc in Actuarial Science. |
| UPES DEHRADUN | B.Sc in Actuarial Science. |
| JAIN UNIVERSITY, BANGALORE | B.Sc and M.Sc in Actuarial Science. |
| THAKUR COLLEGE OF ENGINEERING AND TECHNOLOGY – [TCET], MUMBAI | B.Sc in Actuarial Science. |
Wrap Up,
I hope we had to discuss everything you should know about Actuary. We discuss What is Actuarial Science, the skillset required to become an Actuary, the Types of actuaries, and how to become an actuary in India.
As we had discussed there is a huge demand for actuaries in India. So if you have an interest and are determined for becoming Actuary you should go for it. And all the best for your Journey.
If you think I miss to cover something or you have any doubt regarding the above topic then feel free to comment below.
