Who is a Actuary?
This is not some desire to make (the funding situation) look different, ... This is the actuarial audit ~ Greg Smith
An actuary is a member of the Institute of Actuaries of India. He or she is a professional working in the banking and finance sector. An actuary is skilled in determining effects of future contingent events. He or she also performs finance modelling and risk analysis. An actuary works in numerous areas of insurance. He or she is involved in calculating the value of life interests, insurance risks, designing and pricing of policies. An actuary recommends rates relating to the insurance business, annuities, insurance and pension rates. He or she works with a statistician who has expertise in technology, taxation, employees’ benefits and other risk management and investments.
Actuary in a Nutshell
An actuary is someone involved in planning finance for future needs. He or she calculates the probability of occurrence of an event and determines if the financial institute or organisation has enough funds for future claims. An actuary plans, designs, and tests insurance policies for individuals and groups.
Quick Facts for Actuary
Average Salary in India
The career as an actuary is suitable for everyone regardless of their gender identity. Whether candidates are male, female or belong to any other gender, their gender identity neither resists them to follow their passion nor become resistant in their career growth. They can touch the milestone in their career with their skills, knowledge and willingness to achieve more.
Table of Contents for Actuary
What is the role of Actuary?
An actuary’s everyday work responsibilities include designing and pricing of policies, providing promised benefits by monitoring the adequacy of funds. He or she recommends a fair rate of bonus, valuation of the insurance business, insures solvency margin and other insurance risks such as legal liability, profit loss and several other insurance risks. An actuary defines risk factors and recommends re-insurance to be purchased. He or she calculates reserves for carrying out financial modelling and outstanding claims. An actuary may also provide consultation services in multiple disciplines such as insurance, taxation, employees benefit, investment, risk management and several other related disciplines. So how to become an actuary and what does it takes to become one?
Compiling statistical data
Modern computer technology has made everyone’s work easy. Most actuaries work on computers. Their everyday work responsibility includes using database software to compile information. The information is stored to predict the probability of occurrence of an event. They use advanced statistics and modelling software to predict the potential costs of the event. Actuaries determine if the insurance company has enough funds to pay future claims.
Planning insurance policies
Actuaries are responsible for designing, testing and administering insurance policies, investments, and other business strategies. They are involved in developing strategies to minimise risks and maximise profits. Actuaries produce charts, tables and reports to explain proposals and calculations. They are involved in meetings with company executives, clients, shareholders, government officials to explain their findings and proposals.
Working with other professionals
Actuaries usually work in teams. Their team members include managers and other professionals such as accountants, financial analysts, market research analysts and related professionals. These professionals provide support in setting the price for security offerings, forecast demand for new products.
Types of a Actuary
Health Insurance Actuary: A health insurance actuary is a professional who works in the healthcare industry. He or she predicts the expected costs of providing care under insurance terms. A health insurance actuary is responsible for developing long-term care and health insurance policies. He or she makes predictions on the basis of family history, geographic location, occupation and numerous other factors.
Life Insurance Actuary: A life insurance actuary is a professional involved in developing annuity and life insurance policies for individuals and groups. He or she estimates considering the risk factors such as age, gender or tobacco use to determine the expected years of life. A life insurance actuary calculates the expected number of claims due to road accidents. It varies with the insured individuals’ age, sex, driven automobile such as four-wheeler or two-wheeler and several other factors.
Property and casual insurance actuary: Property and casual insurance actuary is responsible for developing insurance policies to assure the insurer against property loss and liabilities caused due to fires, natural disasters, or accidents. He or she calculates the expected number of claims through road accidents that varies depending on the age, gender, driving history and vehicle type of insured individuals.
Pension and retirement benefit actuary: A pension and retirement benefit actuary is responsible for designing, testing and evaluating the company’s pension plans. He or she determines the availability of expected funds in future to ensure payments of future benefits. Pension actuary is responsible for developing retirement plans and providing consultation on planning retirement to individuals.
Risk management analyst: Risk Management Analysts review the investment strategies of a business, particularly overseas investments, and manage the risk associated with the relevant decisions. To forecast possible losses, they use their analytical abilities and make suggestions to reduce risk by diversification, currency exchanges, and other investment strategies. Insurance firms will, among other things, insure cars, properties, assets, along with any policy, there is a risk that an accident could occur and the insurance provider would have to cover the expenses of repair, replacement, or legal liabilities.
What is the workplace/work environment of Actuary like?
A career as an actuary typically demands working in an office environment. He or she may find employment opportunities in insurance and finance companies, professional, scientific or technical services, and government departments.
Does Actuary require travelling?
A career as actuary does not require traveling on a regular basis. Actuaries working with consulting firms may occasionally require to travel to meet clients.
A career as actuary requires them to work full time. Part-time, hourly basis, on-call or work from home career is not available in this career. The career falls in a certain shift. An actuary requires to work full-time. He or she usually works from early mornings to late evenings.
The contractual term of employment in the career as an actuary entirely depends on the requirement of the organisation. It could be extended depending on the work performance of the candidate.
A career as actuary typically requires them to work in an office environment. An actuary is involved in working with a computer on numerous software for data compilation, so the information could be analysed further to plan design or test insurance policies.
Presence in Geographical Area
Urban and semi-urban areas provide promising opportunities for actuary as a career. The financial institutions are more established in urban cities such as Pune, Mumbai, New Delhi, Bengaluru and Chennai.
Yes, actuaries work under frequent time pressure to deliver their services. It requires time to analyse data, plan, design and test the insurance policies for individuals and groups. An actuary determines the probability of occurrence of an event depending on various factors and minimises the unfavourable outcomes. Therefore, it is usual to extend standard working hours of week. They have to work under deadlines.
The career as an actuary often requires them to work overtime. An actuary may require to work extended hours to meet the deadlines or complete the task in a specific duration of time. He or she works a minimum of 40 hours a week. It is usual for him or her to work extended standard week hours. An actuary works under deadlines.
Weekly Hours of Work
Min 40 Hours
A career as actuary typically demands working a minimum 40 hours a week. He or she works five days a week. The standard hours of work typically increase due to work pressure.
How to become a Actuary?
What are the skills and qualities required to become a/an Actuary?
Problem Solving Ability: An actuary requires examining complex data and identifying patterns and trends. He or she determines numerous factors that are responsible for specific outcomes. An actuary evaluates the probability of occurrence of an event based on these factors. He or she looks for ways to minimise the undesirable outcomes.
Mathematical skills: An actuary must be proficient in instant calculations. They should be able to add, subtract, multiply and divide instantly on fingers. An actuary is required to be quick and accurate while dealing with numerical values. His or her work involves calculus, probability and statistics as he or she is required to quantify risk and determine the probability of occurrence of certain events.
Computer Skills: An actuarial has to compile data on various statistical modeling software. He or she has to use models and tables to evaluate large amounts of data. An actuarial is also required to proficient in statistical programming language. His or her career demands him or her not to limit to just Microsoft office.
Communication skills: An actuary spends most of his time alone working on a computer system. He or she is required to work with other professionals of the banking and finance industry such as accountants, programmers, statisticians and senior management. An actuary must be proficient in oral communication to explain complex and technical details to non-technical persons.
Also read - Career as financial planner
Which certifications and internships can be helpful in becoming Actuary?
Internships are a great initiative to have a thorough understanding of your career and it works as a first step on your journey to how to become a actuary. Internships play a crucial role in bagging a full-time job role. Employers prefer to hire candidates with prior work experience. Internships bring industry insights and increase the chances of getting full-time employment in the same organisation. An actuarial intern is put in an actuarial team such as modeling, testing, valuation, or reinsurance team on the basis of skillset. He or she is required to complete project work assigned to him or her under the guidance of the manager. An actuarial intern gets actuarial skills training during the internship schedule. He or she provides support to the team members as per the requirement. An actuarial intern is required to give a project presentation at the end of their internship.
Career Path Progression for Actuary
Accountant: An accountant is a professional responsible for performing accounting related activities such as account analysis or auditing. He or she is involved in maintaining sales and cash flow reports. An accountant works on various accounting software such as tally, excel, ERPnext, and Quickbooks.
Statistician: A statistician is a commerce professional who analyses the data to predict the probability of the outcome of an event. He or she identifies the pattern to provide support to make decisions. A statistician provides advice on findings and recommends the strategy to shareholders, client and management.
Risk Management Analyst: A risk analyst is a professional who provides help to businesses by determining the number of financial risks involved in the businesses concerning investments and operational costs.
Financial analyst: A financial analyst is a professional responsible for examining financial data and using their findings to help management to make business decisions. He or she may also recommend to buy or sell a company’s stock depending on the market conditions and its overall performance.
Insurance advisor: An insurance advisor helps his or her clients by providing them with the right financial advice depending on their requirements such as retirement planning, investing, or protection against the risk factors. He or she analyses hir or her clients’ financial needs that include existing insurance and risk analysis, assets, liabilities, and tax status.
Actuary Jobs and Salaries
Risk Management Analyst
- Average Salary 42000
- Junior Level Salary 40000
- Senior Level Salary 100000
A risk analyst is a professional responsible for identifying the risks involved in a business concerned with investments, business deals, diversification of currency exchanges or numerous other business decisions. He or she examines the investment portfolio that includes overseas investments. A risk analyst utilises his or her analytical skills to determine potential losses. He or she makes recommendations to limit risks.
The salary varies depending on skills and work experience of candidates. There are numerous other factors that affect salary bars. The size of the organisation and area where it is located also affects the salary bars. An entry-level risk analyst could earn more than Rs.500,000 per annum. A senior-level risk analyst could earn more than Rs. 1,200,000 per annum.
- Average Salary 25000
- Junior Level Salary 21000
- Senior Level Salary 65000
An insurance advisor is responsible for providing specialised guidance and advice for investment in various insurance schemes. He or she performs a number of functions that involve intermediation, sales, compliance management and advisory roles.
The salary varies depending on work experience and skills of the candidate. An early-level insurance advisor could earn more than Rs.400,000 per annum. A senior-level insurance advisor could earn more than Rs. 800,000 per annum.
What is the job outlook for Actuary?
There are numerous job opportunities for the career of actuaries. Earlier it was not that popular, but now people have started recognising it and it has gained popularity. A large number of job openings are expected in the coming up years. The finance and banking sector is continuously booming giving more opportunities to individuals. The areas of actuarial work are related to the banking and finance sector such as general insurance companies, health insurance companies, actuarial consulting firms and numerous other organisations require services of actuaries. There is also a huge demand for actuaries abroad as well whether it is for developed markets or emerging markets.
Frequently Asked Questions for Actuary
Que. What is the average starting salary of an entry-level actuary?Ans.
The salary varies depending on skills and work experience of candidates. The academic degree also plays a crucial role in salary parameters. Candidates who have cleared 2 papers of IAI, IFoA, or any other foreign actuary institute recognised globally are offered a higher salary than B.Sc. or M.Sc. actuarial science graduates. An actuarial student can start working at an entry-level position and earn an average salary of Rs. 500,000 to Rs.600,000 per annum.
Que. What is the average fee charged for B.Sc. Actuarial Science?Ans.
The fee varies from institution to institution. Private universities and colleges charge a hefty amount of fee. While government institutions charge an economical amount of fee. The average fee for B.Sc. The Actuarial Science programme ranges Rs. 50,000 to Rs. 300,000 for the duration of three years.
Que. What is the eligibility for registering as the student member of the Institute of Actuaries of India?Ans.
Candidates who have appeared in 10+2 examinations are required to qualify ACET. There are several other conditions that are required to meet in lieu of qualifying ACET to register as a student member of IAI. We have mentioned below these conditions.
M.B.A. (Finance) graduate with an aggregate of 60 per cent of marks
B.E. graduate with an aggregate of 60 per cent of marks
Fellow member of Insurance Institute of India
Given two papers of any of the following actuarial institute -
Institute of Faculty of Actuaries (IFoA)
Society of Actuaries (SOA)
Casualty Actuarial Society (CAS)
The Actuarial Society of South Africa (ASSA)
Institute of Actuaries of Australia (IAAust)
If the candidate meets any of the above-mentioned requirements, he can directly register for student membership in IAI without appearing for ACET.
Que. What are the other academic programmes one could opt for working as an actuary?Ans.
There are full-time actuary degree programmes, diploma and certifications programmes in actuarial science offered by numerous government and private institutions. We have mentioned below the major actuary degree programmes for actuary career.
MBA (Master of Business Administration) Finance (passed with 60 per cent of marks or equivalent)
M.Sc. (Master of Science) Actuarial Sciences
B.E. (Bachelor of Engineering) (passed with 60 per cent of marks or equivalent)
Que. When one should prepare for ACET?Ans.
Candidates should start preparing for ACET after appearing in 10+2 examinations. They are required to register themselves for ACET through the official website of IAI. The study material is provided by IAI for preparation after successful registration for ACET.
Questions related to Actuary
Should I pursue BA Eco or BA Eco Honours from DU if i want to pursue acturial science along with it? (I am a PCM student without economics in +2)
Actuarial science is a difficult course and would need all your focus and attention. However, if you want to pursue a degree in economics you can go for any of the two.
There's is not much difference between BA economics and BA economics honours , except the later has a more in depth curriculum.
So you can choose the degree that suits you best!
I hope that cleared your doubt.
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