Actuarial Science

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Actuarial Science

The US News and World Report consistently ranks actuaries amongst its “Best Business Jobs” category in America along with their “Best Paying Jobs” and “100 Best Jobs” as well. In particular, actuarial science is a highly technical discipline that deals with insurance risk management, statistical and risk analysis as well as measuring and devising policy instruments. In other words, they hold expertise in what value insurance products hold about the risk factors involved. Taking into account, what a global mammoth international finance and insurance industry has become, actuarial science, although still a niche, is steadily being recognized as one of the industries to look out for in the coming decades.

Shane Hummus
 

What is Actuarial Science

Almost everyone knows what CA is now, but what is actuary science? Different statistical and mathematical methodologies are used in actuarial science to determine the magnitude of financial hazards. Actuarial science analyses and solves financial difficulties involving uncertain future occurrences using probability analysis and statistics. Actuarial science is similar to weather prediction in that it predicts weather conditions using mathematics and assumptions. Actuary specialists advise businesses and people on the future risk of investments based on statistics and probability (basically mathematics). Actuarial science uses various subjects, such as Mathematics, Probability, statistics, finance, economics, and computer science which are somewhat interrelated. As a result, if statistics and mathematics are your strong suits, you might choose a career in actuarial science.

The Job of An Actuary

In a typical actuary profession, technical, research & analysis, and quantitative skills are heavily utilized. From quantifying abstract risk circumstances and scenarios to revising current insurance terms and conditions, the job of an actuary is end-to-end and data-oriented. They use mathematical, statistical, and Financial Analysis tools, on instruments such as life insurance policies, employment benefits, retirement schemes, and risk mitigation activities in sub-areas of insurance, life, health, property, etc. While the companies in the insurance sector are considered to be prime employers, individuals are continuously applying gained knowledge and expertise in closely allied fields around finance and investment. It is a financially rewarding field with designated routes of career growth.

Also Read: Cost and Management Accounting

Certifications & Exams

The field of actuarial science requires individuals to prove proficiency by qualifying for a set of examinations regulated by national bodies. In India, the Institute of Actuaries of India is tasked with conducting and implementing these examinations. A four-staged exam involves ability-testing in the core, specialist, and advanced principles related to specific components like Actuarial Statistics, Financial Engineering, Financial Derivatives, Investment & Finance, and much more. The Society of Actuaries and Casualty Actuarial Society are international associations concerning actuarial certifications. Similar examinations include FRM and CFA courses.

Also Read: Short Term Courses in Finance

A career in Actuarial Science: Courses & Universities

Actuarial Science course offerings have steadily burgeoned across the globe, especially owing to the rewarding career avenues it opens for students. Moreover, one can also look towards programs such as Master of Finance, MBA in Finance, etc. The following is a list of institutions best known for their investment courses in general and actuarial sciences, in particular. Prospective students are also advised that to gain entry into such degree programs, the application procedure requires submission of official GRE/GMAT or IELTS/TOEFL scores along with copies of official transcripts, CV, Statement of Purpose (SOP), and Letters of Recommendation (LOR), amongst others. 

Name of University Location THE World University Rankings 2021 Courses in Actuarial Science [AS]
University of Pennsylvania USA 13th Bachelor of Science in AS
Columbia University USA 17th Master of Science in AS
University of Toronto Canada 18th Bachelor of Science in AS [Hons]
National University of Singapore Singapore 25th ANU/NUS BSc with Joint Honors in Actuarial Studies & Economics
London School of Economics & Political Science UK 27th BSc AS [Hons]
The University of Melbourne Australia 31st Bachelor of Commerce [Major-Actuarial Studies]Master of AS
Master of Commerce [AS]Ph.D. Actuarial Studies [Research]
University of Hong Kong Hong Kong 39th BSc in
Technical University of Munich Germany 41st MSc in Mathematical Finance & AS
University of Manchester UK =51st BSc AS & Mathematics
Ph.D. Mathematics in AS
University of Amsterdam Netherlands 66th BSc in AS
MSc in AS & Mathematical Finance
Ohio State University USA =80th BA AS
BS AS
Master of Actuarial & Quant Risk Management

Entrance Exams for Actuarial Science

Only the Institute of Actuaries of India offers a formal actuarial science education in India (IAI). The Actuarial Common Admission Test is an IAI-created university entrance test (ACET). ACET is held three times a year, in April, June, and December. CT, CA, and ST are the three phases of the test. To have one’s qualifications as an actuary recognized by IAI, one must pass all three phases. After clearing 10 examinations, a candidate becomes an Associate, and after passing 13 exams, they become a Fellow of the IAI An IAI-accredited actuary

Required Skillset for Actuarial Science

  • Problem Solving Skills
  • Mathematical brilliance
  • Technical knowledge
  • Knowledge of Business and Finance
  • Communication and Interpersonal Skills

Eligibility Criteria of Actuarial Science Courses

UG courses

  • The examinee must have taken 10+2 exams in either Commerce or Math.
  • One of the initial language subjects must be English.
  • Candidates taking this test have no age restrictions.
  • A minimum aggregate of 60% in 10+2 and a minimum 70% aggregate in Maths is compulsory.

PG courses

Candidates must have passed B.Sc./ B. Com with 50% aggregate mark. Candidates should, however, have Mathematics and Statistics as two of their core subjects in college.

Course Fees Actuarial Science

Courses  Minimum Fees Maximum Fees
UG 1.35 Lakhs 5.22 Lakhs
PG 18.00 K 4.80 Lakhs
DIPLOMA 7.90 K 7.90 K

Course Subjects

  • Calculus
  • Statistics and Probability
  • Mathematical Functions
  • Actuarial accounting
  • Foreign economics
  • Actuarial economics
  • General Insurance
  • Mathematics
  • Liability insurance
  • Business research
  • Global Business research

A career in Actuarial Science: Major Options

In addition to the quintessential job of an actuary, individuals can explore innumerable career pathways around the periphery of insurance, risk management, Financial Economics, and Financial Accounting, amongst others after pursuing Actuarial Science. A few of the popular ones have been given a rundown below: 

Also Read: PGDM in Finance

Statistician

The job of a statistician or statistical analyst is highly revered in both academic and industrial circles. It involves heavy usage of statistical tools and software to learn patterns in data and work out solutions to the real world. In recent times, the mobility of individuals has been both ways, with prior actuaries moving on to jobs of statistical analysts and vice versa. Common work responsibilities of this popular actuarial science work profile include design and analysis of surveys, data collection, refinement, interpretation as well as further reporting of data.

Financial Analyst

Expertise in the actuarial science sector also prepares me for a career as a financial analyst in investment banking, fund management, or wealth management firms. Typical work responsibilities may range from an analysis of market trends, financial instruments research, the historical performance of stock and companies, and making recommendations/predictions on future performance. Furthermore, as a financial analyst, one is also required to possess in-depth knowledge of financial accounting, tax, corporate finance, risk management, etc.

Also Read: Equity Research Analyst

Insurance Underwriter

As an insurance underwriter, individuals deal with actual insurance applications, assess eligibility, risk, and other factors, conduct background checks, and set up contracts and terms. Typically hired by insurance companies and banks, a solid understanding of insurance products, schemes, the application process, and approval formalities along with being on par with recent development in the industry is also a must. However, they only interact with insurance field agents and other professionals and do not engage directly with clients, working merely as an important intermediary between the insurance firm and agents. Prior experience in the financial sector and a concrete grasp of computer software are recommended to build a career in actuarial science through this profile. 

Mortgage Advisor

Banks and financial corporations hire mortgage advisors to facilitate smooth loan/mortgage catering. Particularly, a mortgage is an instrument that acts as collateral security taken out against property, usually a house. It is a modern financial invention that has transformed the real estate and banking industry and spurred growth in the past few decades. As a mortgage advisor, one is tasked with relaying information related to suitable mortgage schemes, and loan conditions, and setting up contracts and terms along with a host of other elements. Prior experience working in the financial sector is preferred.

In addition to the above-mentioned job profiles in the actuarial science field, one can also work in similar professions such as:

  • Business Analyst
  • Investment Analyst
  • Tax Assistant
  • Economic Analyst
  • Pricing Analyst
  • Data Analyst
  • Researcher

Average Salary

Job Position Average Annual Salary
Actuary Rs. 7 – Rs. 10 lakhs p.a. (approx.)
Accountants and Auditors Rs. 2.5 – Rs. 5 lakhs p.a. (approx.)
Budget Analysts Rs. 3.5 – Rs. 6 lakhs p.a. (approx.)
Cost Estimators Rs. 5 – Rs. 8 lakhs p.a. (approx.)
Economists Rs. 7 – Rs. 12 lakhs p.a. (approx.)
Financial Analysts Rs. 3.5 – Rs. 6 lakhs p.a. (approx.)
Insurance Underwriters Rs. 4 – Rs. 7 lakhs p.a. (approx.)
Mathematicians Rs. 7 – Rs. 9 lakhs p.a. (approx.)
Postsecondary Teachers Rs. 10 – Rs. 15 lakhs p.a. (approx.)

Top Recruiters 

  • Prudential
  • Max Bupa Health Insurance
  • E&Y
  • PwC Actuarial Services India
  • Liberty Mutual
  • The Travelers
  • Towers Watson
  • The Hartford
  • ING
  • Allstate
  • Nationwide
  • Towers Watson
  • Aon Hewitt

Related Articles: Investment Banking Jobs

Scope of Actuarial Science in India and Abroad

The growing Indian economy and burgeoning entrepreneurship have boosted the demand for experienced actuaries who can forecast trends. Actuarial specialists are in great demand in developed nations. Actuaries can also pursue globally recognized courses like the Chartered Enterprise Risk Actuary (CERA) accreditation to be the finest in the worldwide market. Even those who are not interested in living overseas have a good chance of finding work in India, given there are only 9000 actuaries out of 1.3 billion people. Even for a fresher, actuarial science promises you one of the top paid occupations.

Actuarial science offers exciting career pathways not only in the insurance sector but also in data analysis and other research-oriented fields. Needless to say, the demanding nature of the exams and certifications involved requires heavy preparation and effort. Prepare your personalized plan under the guidance of the industry-recognized experts and mentors at Leverage Edu and take a step towards a fulfilling career! 

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