What Is & How To Be An Actuary?

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Actuarial science is a science-based on which future financial expected events can be measured and be quantified. It is specialized mathematics used in calculating risk, especially in the insurance business sector. Actuarial science includes several related subjects. For example- mathematics, probability theory, statistics, finance, economics, and computer science. In this blog, you will learn how to be an actuary.

Actuaries are highly specialized analysts. They use data, statistics, and analysis to lessen risk and uncertainty present in asset management and they also design insurance policies. In other words, wherever there is a risk involved, actuaries are involved in it.

Actuaries usually work in corporations such as Pension Funds, Mutual funds, hedge funds, banks and Insurance firms having high risk.

Skills required to make a career as an actuary

Specialized math knowledge

Actuaries should have good Calculus, statistics, probability knowledge.

Management skills

Actuaries should have a strong analytical, project management as well as problem-solving skills with business sense.

Finance, accounting, economics knowledge

A person should be able to understand various terms and how to calculate ratios, etc.

Communication skills

Actuaries should have good oral as well as written communication skills.

Computer skills

Actuaries should be able to formulate spreadsheets, statistical analysis programs, database manipulation, programming languages.

However, these skills are kind of prerequisite. So go for Career Counseling if you find it hard or not interested in certain aspects. If you want to make a career in Actuaries you should enjoy certain habits. For instance, you should enjoy learning, solve complicated problems, writing and talking to people.

Besides, you should also have the ability to work effectively alone or as part of a team, with interest in various historical, social, legislative, and political issues. Apart from this, you should have other personal characteristics like self-motivation, creativity, and also should be ambitious.

But first, ask yourself do you want to make a career in actuaries? For any confusion, I will suggest you go for Career Counseling.

Work-Life as an actuary

If you are actuary your typical day will include the following activities. Like developing various new financial products, analyzing on risk-related, conducting valuations of assets and liabilities, measuring, monitoring and mitigating various risks like enterprise risk, developing a product and testing of profits for an investor’s portfolio, doing assets and liability modeling, advising on various topics like investment strategies.

Apart from this, you have to prepare a presentation, reports, valuations and update your company and client regularly.

Statistical methods are used by actuaries to estimate the probability of future events such as death, retirement, motor accident, movement of stock prices, etc. And on that basis, this calculation risk is analyzed and accordingly insurance these factors are kept in mind.

Actuaries work in the following areas

Enterprise and risk management

Actuaries help companies understand and manage the various risk associated with their business objectives.

Finance and investment

Actuaries work in banking, corporate finance, and corporate investment.

General insurance

Actuaries rate products, advice on reserves and capital requirements for smooth working, and other general insurance activities.

Health and care

Actuaries work on health provision models to meet the requirements in the health sector.

Life insurance

A very important area for actuaries, working for predicting and their contribution is increasing day by day.

Pensions

Actuaries advise companies on various fields related to pension schemes as well as its structure.

See whether you want to work for these sectors and want to make a career in actuary or not. Also, actuarial exams are very hard and sometimes students can take a lot of time to pass them. If you want to be an actuary yourself, you should be ready to work hard and study for at least 10 years to complete the course and excel as an actuary.

Above all, if you are looking to become an actuary you should not only be good in math and statistics but also should be ready to do complex calculations most of the time while working as an actuary. Love mathematical analysis and are willing to study till your late 20’s or early 30’s with the job then you can consider Actuaries.

Certified Actuarial Analyst (CAA) qualification will continue to be in high demand.  In India, actuaries are mostly work in Insurance and Pension sector. Generally, employers usually don’t provide investment actuaries profiles in India.

In India, actuary works for the company but is hired by Insurance Regulatory and Development Authority (IRDA) to make sure that everything is correct and according to guidelines like the policies are priced correctly and following rules and guidelines.

There’s plenty of jobs and demand for Actuaries in India but for only properly qualified actuaries. Lots of people are giving this exam but very few pass the paper. Different kinds of firms hire Actuaries or as a Quantitative Analyst.

Actuarial Organizations of Some Countries are:

  1. Institute of Actuaries of India (IAI)
  2. Institute and Faculty of Actuaries (IFoA) the UK
  3. Society of Actuaries (SoA) in the USA

Almost all actuarial organizations have minimum eligibility of passing the 12th or HSC and along with certain other criteria that differ from organization to organization. So, you can start after passing 12th at such an early stage is its advantage.

However, in India, you can Make a Career in Actuarial science and you can become an actuary by clearing 15 Actuarial exams. Similarly, for clearing the Actuarial exam you need to take membership from IFoA or IAI.

1. IAI

IAI is a statutory body which does the regulation of the profession of Actuaries in India and is established under The Actuaries Act 2006. Its objectives are to promote, uphold and develop the standards of professional education, training, knowledge, practice, and conduct amongst Actuaries. Also, they promote the status of the Actuarial profession; also regulate the practice by the Members of the profession of Actuary.

You can purchase the study material for this online and the material will be sent to you by post or other similar means.

Study material is of two types namely Compulsory material and Optional material. Compulsory Material as the name suggests is required to be purchased for appearing in an exam, whereas Optional Material is for revision purposes only.

Compulsory Material will be given in Hard copy as well as in online format. Whereas Optional material is only available in Hardcopy format.

Fee structure of exam conducted by IAI

Core Technical Stage (CT) 2500 per subject

Specialist Technical Stage (ST) 4000 per subject

Specialist Applications Stage (SA) 5000  per subject

(as of 13th November 2016)

Who can become an Actuary by applying through IAI?

HSC passed, graduate, postgraduate, Engineer, MBA, CA, ICWA, etc. with sound knowledge in Mathematics & Statistics. IAI Actuarial Exams are divided into 2 types. Namely three hour Written examination and Practical examinations.

The written examination comes in four stages.

1. Core Technical Stage (CT)

There are 9 subjects in this and you have to pass all the following 9 subjects are:

Subject CodeSubject detail
CT1Financial Mathematics
CT2Finance and Financial Reporting
CT3Probability and Mathematical Statistics
CT4Models
CT5General Insurance, Life and Health Contingencies
CT6Statistical Methods
CT7Business Economics
CT8Financial Economics
CT9Business Awareness Online Module(Practical Exam)

 

2. Core Application (CA)

You are required to pass all 3 subjects.

Subject CodeSubject detail
CA1Actuarial Risk Management
CA2Model Documentation Analysis and Reporting (Practical Exam)
CA3Communication (Practical Exam)

 

3. Specialist Technical Stage (ST)

The student has to choose 2 Subjects.

Subject CodeSubject detail
ST1Health and Care
ST2Life Insurance
ST4Pension and Other Employee Benefits
ST5Finance and Investment A
ST6Finance and Investment B
ST7General Insurance Reserving and Capital Modeling Specialist Technical
ST8General Insurance Pricing Specialist Technical
ST9Enterprise Risk Management

 

4. Specialist Applications Stage (SA)

The final stage of the examinations is one specialist subject chosen from the list below:

Subject CodeSubject detail
SA1Health and Care
SA2Life Insurance
SA3General Insurance
SA4Pension and Other Employee Benefits
SA5Finance
SA6Investment

 

2. IFoA

The Institute and Faculty of Actuaries (IFoA) came into being on 1 August 2010. They have members in 100 countries and exam centers in 80 countries. Also, they have organized 20th AAG recently. If you want to Make a Career as an actuary you need to apply at the Institute and Faculty of Actuaries (IFoA) as a student member. After that, you need to pass the exams and gain a satisfactory level of work-based skills.

CERA – Certified Enterprise Risk Actuary to become an Associate and you have to pass ST9 and attend a CERA seminar. For Indian Actuaries, it’s almost the same but there is an entrance exam called ACET which tests Math and English of the applicant and whether he is fit for an actuary or not.

While UK Exams are held mostly in April and September end weeks, so they have a high probability to clash with your University exams. However, IAI exams are held in May and October. Because of this, they don’t usually clash with your University exams. While entry-level test ACET is held in June and December.

Factors affecting your selection

1. Where you want to work

If you want to work in any country outside choose their country organization or a country that has some agreement with.

But, if you want to work in India you can go for either IAI or IFoA. As they are recognized in India, they have an agreement but IAI and SoA don’t have an arrangement like that.

2. Fee

Usually, IAI fee is 1/5th that of IFoA. So, if many matters high in your case choose IAI rather than going for IFoA which will be expensive for you. Or if it is no problem for you then you can choose any of the organizations.

3. Passing rate

It is higher in the case of IFoA than IAI.

You can also do a B.sc in actuarial science from a university like Amity. However, B.sc in actuarial science from any Indian university does not have such a high value. For it has not been recognized by IAI and does not grant any benefit like an exemption for any paper, etc.

So, you can do it if you want but you have to appear for IAI or IFoA exams.

The actuary has many benefits. Why you should Make a Career in it? 

1. Unlimited Scope

You can work across various organizations in various sectors. You work in corporations such as Pension Funds, Mutual funds, hedge funds, banks and Insurance firms having high risk.

2. Actuaries are high in demand

Apart from easy placements, you can get additional benefits like high pay packages. Also, you can easily switch between companies if you don’t like one.

Growth in this sector is also high. As it is a very difficult job to enter in, it also provides high job security in recession times.

3. Specialized Analysts

Actuaries are highly specialized analysts and they use data, statistics, and analysis to lessen risk and uncertainties. Moreover, it is a science that includes knowledge from various subjects. Like mathematics, probability theory, statistics, finance, economics, and computer science.

Because of the work involved actuary is highly challenging and interesting.

Some difficulties you can face while going to Make a Career in Actuary

1. The job is highly stressful and highly demanding

You are given various responsibilities. For instance, developing various new financial products, analyzing on risk-related, conducting valuations of assets and liabilities, measuring. Other tasks include monitoring and mitigating various risks like enterprise risk, developing a product and testing of profits for an investor’s portfolio, doing assets and liability modeling, advising on various topics like investment strategies.

2. It is very hard to pass the paper

As there are many papers to crack. As a result, it is also academically demanding as you have to study various subjects. It requires extensive as well as deep knowledge about a topic. It also requires a lot of time to crack you have to study with your job till the late ’20s or early ’30s.

3. It is a very Competitive Profession

In this only the best goes to the top because the exam passing rate is low it is very competitive and challenging. Hence you cannot rely fully on it because of the low passing rate.

4. Not many people are aware

Not many people are aware of this profile because of that people can sometimes underestimate you. You should be prepared for dumbfounded expressions when you tell them that you are an Actuary.

The insurance market is all around the world and after its globalization, the complexity has further increased. Similarly, the risk associated with it. Because of this, there are a huge demand and supply gap for a professional actuary.

Therefore, the importance of qualified Actuaries is increasing with actuaries enjoying exponential growth. This career has high rewards in terms of status, intellectual challenge, financial return, and job satisfaction.

Conclusion

Though it is not that popular and lacks a well-established network or platform in India, it is very easy to build a career abroad with a high package. If mathematics is your cup of tea then you should consider this profession.

After that, if you are not able to decide and you are in a dilemma I will suggest you go for a career counseling session using a professional career counseling platform, which will help you decide.

Also, I will suggest going for IFoA if money ain’t a problem as it has high passing rates. Also with it, you can make your career abroad but if money is a problem go for IAI as it is cheaper and works in India.

However, a degree in this does not give much help in terms of exemption from a paper if you have a degree. So, no additional advantage is there.

Therefore, one should try to make a Career in an actuary. Take advantage of less awareness of such a rewarding career. This career is very valuable in the world.

Although it is slightly challenging it is been overweight by rewards and its interesting nature. If you have an interest in Math then you must think of this as a career. This career can give exceptional growth in life.

Looking for a professional Career Counselor? Let us know at partner@edu4sure.com or simply call us at 95.5511.5533

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