Quick, what is the sum of all numbers from 1 to 10? No calculators please. Did you say 55? Well, that was fast. If you used the formula n(n+1)/2, brilliant! This article is for you, on a career with lots of number crunching.The market
Until recently, insurance in India was monopolized by LIC and GIC. All that has changed now. The market is poised for prime time with stiff competition between private and government companies.
Besides, the Insurance Regulatory and Development Authority, IRDA, has made it compulsory for insurance companies to employ actuaries. So anyone with actuarial qualifications is hot property in the market.
Actuaries are the brains behind insurance policies. They are the ones who determine that you pay Rs 2,555 per lakh of medical insurance if you are 25 years old and Rs 2,597 if you are 26. Actuaries use mathematics, statistics and computer modeling tools for their work.
They draw on a broad spectrum of data such as the average life expectancy of an urban Indian, hazards of your occupation etc. to arrive at a premium that provides for some profit to the company without scaring the customer.
Actuaries advise financial product companies (insurance, reinsurance, pension providers and even mutual funds and derivatives) on investment strategies to match cash inflow and liability outflow.
They are also essential to massive projects for risk assessment and management. Did you know that projects like a satellite launch or events like the Olympics can be insured against failure? However, it is too risky even for an insurance company to provide cover for such projects.
This is where reinsurance comes in. Reinsurance companies (such as Lloyd's) provide cover for the liabilities of insurance companies. The reinsurer in turn spreads risks by diversifying its portfolio and operating in multiple geographies. Sounds exciting?
Sure is - in the last five years, the actuarial profession has been consistently rated among the top five jobs in the United States by the Jobs Rated Almanac.
Education
To become an actuary, you need to clear a series of examinations conducted by the Actuarial Society of India (ASI), Mumbai. ASI is a member of the International Actuarial Association, so unlike a lot of other professional qualifications, this one is accepted worldwide. Exams are conducted twice a year during the months of May and November.
There are 16 subjects split as 9+1+5+1 over four groups. The exam fee is around Rs 700 per subject. In addition, there is an annual membership fee. This is a do-it-yourself course - there is no classroom coaching.
However, ASI does provide some course material and past paper solutions.
The first group consists of nine technical subjects covering a lot of ground in Maths, Stats, Finance and Economics. A single subject on actuarial communication skills comprises the second group. The third group has 5 subjects of general industry application.
Finally a specialization like Investment or Pensions in the last group gets you the coveted qualification. Seems like an arduous climb? Despair not; a certificate in Actuarial Techniques (CAT) is awarded on clearing the first group.
Until recently, one had to pass an entrance exam in Maths and English to gain admission. But now, graduates with good record in Maths or Stats (securing more than 55 per cent throughout) are eligible to apply directly.
The ASI also permits candidates who have passed HSC with more than 85 per cent marks in Maths and Stats to apply.
So if you have secured 92 per cent in PCM and are yet staring at a rank of 10,621 in the state engineering admission merit list, you know what to do next. The University of Mumbai also seems to offer a BSc in Actuarial Science.
NMIMS (Narsee Monjee Institute of Management Studies) is introducing a Post Graduate Diploma in Actuarial Science (PGDAS) starting September 2003. This is an intensive (and pricey too, at a cool Rs 1.65 lakh) full time one-year classroom course aiming to cover syllabus equivalent to the first two groups of the ASI curriculum.
This course comprises 33 modules spread over three trimesters of 11 modules each. While it may not have the same recognition as the ASI course, it will certainly put you on the fast track to becoming an ASI Fellow. It also won't be a surprise if prospective employers start queuing up for campus recruitments here.
There is no fixed time duration for becoming a qualified actuary. Typically, you clear three to four core subjects in the first group and take up an entry-level actuarial job at companies like Prudential ICICI, Max New York, Tata AIG or others while pursuing the rest of the course.
Even entry-level jobs have annual pay packets of 2-3 lakh or more. Increasingly, a high level of comfort with computer-based modeling is needed, so you would do well to take computer science as a subject in college.
High aptitude in Maths and Stats is necessary but not enough. You also need to be a good communicator.
