What is Actuarial Science| Career and more

Have you ever wondered what do Actuaries really do, career prospects for Actuaries, the future, and the scope of Actuarial Science?

If not, then, let’s get you started!

What is Actuarial Science?

Actuarial science is the discipline that applies mathematical and statistical methods to assess risk in insurance, finance and other industries and professions. It includes a variety of interrelated subjects like mathematics, finance, economics, computer programming and probability. It is used to get a comprehensive picture of the risks relating to contingent events and for scientific valuation of financial products in the fields of insurance, investments, retirement etc.

An insurance actuary is a professional that analyzes financial risk using mathematics, statistics and financial theories. Most actuaries work in the insurance industry and help insurance companies determine good risks or those the companies are less likely to have to pay out claims to as the result of a loss.

What are the various domains in which Actuaries work?

Tradition Fields for Actuaries

Traditionally, Actuaries work in insurance companies and consultancies to support crucial tasks in the following businesses:

Actuaries in Insurance

  • Pricing new products that various companies launch,
  • Reviewing the pricing strategy of existing products,
  • Preparing premium charts for the company as per the level of risk that a policyholder carries,
  • Reserving a set amount of money aside to pay for liabilities of the company as and when they arise.
  • You can read more about it here.

Actuaries in Pensions

  • Preparing financial reports assessing the health of solvency of various products/pension funds by carrying out their valuations and reporting the same to companies, regulators.
  • Communicating the results of their findings to the Stakeholders
  • Explanation to the concerned authorities
  • Executing a particular decision as recommended by the actuarial team.
  • You can read more about the work of Actuaries in Pensions here

The actuarial teams are small in each company as there are specific tasks that these teams perform. So, a small team is capable of handling most of the work of the company due to their expertise.

But with Insurance sector penetration holding a large potential, there is a huge scope of Actuarial Science as a career in India and abroad! To understand how you can become an actuary and to learn about it more, along with the syllabus, follow here.

There are 34 Non-life insurers out of which 5 are standalone health insurers, 24 Life Insurers, One National Reinsurer (General Insurance Corporation, GIC-Re) in India as of now.

Non Tradition Fields for Actuaries

Nowadays, career prospects actuaries are moving to work in non-traditional areas. Future for actuaries hold dominance in the following domains:

  • Risk analysis and consulting
  • Investment Banking/ analysis
  • Strategic planning
  • Climate Change
  • Banking: to analyze its investment portfolio
  • Gaming industry
  • Secondary data analytics

Actuaries have made a drift from their traditional Insurance specific work in the decade. While, a major component of core Insurance pricing and reserving work still remains under an Actuary’s area of specialization.

In many countries, the future for actuaries means employment in the finance ministry of the governments to assist them in Budget analysis, Demand forecasting, and revenue projections.

Which companies hire Actuaries?

If you are an actuarial professional, you can be employed by either of the following:

  • Core Insurers such as Met Life, Prudential, Aegon Life, Bharti Axa Life insurance, DHFL Pramerica, Aviva Life Insurance, Iffco Tokio General Insurance, Liberty Mutual, Allstate Insurance Group etc.
  • Reinsurers such as GIC Re, Munich Re, Swiss Re.
  • Consultancies such as WNS, Aon, EXL, Willis Towers Watson etc.
  • Big 4 Audit firms such as Deloitte, PWC, KPMG, EY also employ actuarial professionals to hire their expertise in providing services to their clients.

Earnings in Actuarial- What they really are?

  • As an entry-level intern/analyst , you can expect to earn somewhere between 3-6 lakhs in India based on your skills/ number of exams cleared / domain in which you are working and the company for which you are working!
  • Your package increases as your experience increases and you add more and more to your skills.
  • Companies also add to your package / give you a bonus of certain amount as you clear each additional Actuarial exam. The amount depends from Company to Company.
  • A newly qualified actuary in India doesn’t earn any less than 15 lac – 20 lac per annum.
  • However, you can always earn more based on your skillset, competencies and professional experiences. With the growth of career prospects of Actuarial Science in India. Also, your ability to apply your knowledge to new areas for problem solving.

A candidate can expect to have a decent entry level job in actuarial profile after the clearance of 4-5 CT papers. However, people with lesser or more number of papers may also get a job.

Positions in which actuarial professionals are employed

The scope of work for actuarial professionals is to work as:

  1. Budget Analysts for businesses.
  2. Pricing Analysts for various insurance and reinsurance products.
  3. Reserving Analysts for various insurance and reinsurance products.
  4. Financial Analysts
  5. Reporting Analysts
  6. Auditors
  7. Appointed Actuaries for Insurers, Reinsurers

Can Actuaries start their own practice?

Yes, Actuarial Entrepreneurship is in growing stages as a career prospect for actuaries in India. You can start providing your own consultation to companies as and when you network strong enough to attract clients. The scope of Actuarial Science combined with Entrepreneurship is a well-constituted package for growth in India.

Some of the Actuarial Entrepreneurship companies are:

Pramarth – Founded by Mr. Mahidhara Davanagere in 2014.
KP Actuaries and Consultants – Founded by Khushwant Pahwa in 2013.

FAQs on Actuarial Science

How much do Actuaries earn?

The starting salary for an actuarial professional in India lies in the range of 3-6 lacs, which increases with an increase in the number of papers cleared by the individual and experience in their field.

Non Tradition Fields for Actuaries

Successful actuarial professionals in India and worldwide are hired by core Insurance companies in the domains of Life Insurance, General Insurance, Pensions, or by consultancies such as WNS, Aon, Mercer for their consulting work in these areas.

How can I appear for Professional Examination of Actuaries?

There are various Actuarial bodies across the globe that conduct actuarial examinations to qualify candidates in this profession. Two of them are :
1.       Institute of Actuaries of India
2.       Institute and Faculty of Actuaries – UK

Is there a demand for Actuaries?

Employment of actuaries is projected to grow 20 percent from 2018 to 2028, much faster than the average for all occupations. With their technical expertise, they will be required to evaluate and quantify new and emerging business risks in this fast-changing world!
The career prospects for actuarial science and its scope in India look promising!

So, What are your thoughts on what else future holds for Actuaries?

The Actuarial Club
A dedicated website to provide students with the latest news about actuarial and related domains and a website to help students in solving their problems and provide recent info about trends in actuarial

    2 Comments

  1. Avatar
    Ali Hyder Mulji
    August 7, 2020
    Reply

    Great article! I am an aspiring actuary having cleared 1 paper. I am planning to clear my entire CP series by the end of my graduation. How difficult will it be for me to find an entry-level job once I get out of college with a BCom degree + 6 papers cleared + fluent in (Python + Rstudio)?

  2. Anmol Kaur
    Anmol Kaur
    August 8, 2020
    Reply

    Hi Ali,

    Its great to see you planning all this at the right time. Having papers cleared along with knowledge of R and Python will surely give you an edge over other candidates. But one more thing that you should focus on is on your networking and communication skills. You will have enough time to connect with like-minded people who will help you grow in your career path. This may be done by connecting them on linkedin or being actively involved with organizing seminars, conferences at the college level with relevant people. After all, what use all the knowledge is of, if you can’t exhibit it to the right people at the right time. So, focus on these three aspects- Actuarial Papers, Programming languages and Communication and Networking skills, and you will be unstoppable on your journey!

    All the best!
    Best Regards,
    Anmol

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