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Actuary

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Contents

Overview

What is an actuary / Nature of the Work / Work environment / Related Occupations / Advancement & Job prospects

What is an actuary

  • An actuary is a business professional who deals with the financial impact of risk and uncertainty
  • The actuarial profession has been rated in the top four jobs in America in every one of the five editions of a popular job hunter's guide.
  • Actuaries help to make financial sense of the future. It’s a very rewarding profession, but also an extremely challenging one.
  • Actuaries construct financial models for the future, assess risk and communicate the results in financial terms. They work in life and non-life insurance, consultancy, healthcare, investment, corporate finance, government service, academia and industry.
  • As an actuary, the decisions you make could affect hundreds of thousands of people in all walks of life. You could even be responsible for billions of pounds of investment.
  • It is very demanding – you will need to study hard for the professional exams. It is also very rewarding. An actuarial career can offer intellectual challenge, professional status, job satisfaction and high earnings. You can also expect real diversity – actuaries are increasingly extending their activities beyond traditional insurance and pension roles.
  • A strong background in mathematics is essential; actuaries must pass a series of examinations to gain full professional status.

Nature of the Work

Through their knowledge of statistics, finance, and business, actuaries assess the risk of events occurring and help create policies that minimize risk and its financial impact on companies and clients. One of the main functions of actuaries is to help businesses assess the risk of certain events occurring and formulate policies that minimize the cost of that risk. For this reason, actuaries are essential to the insurance industry.

Actuaries provide professional services in a wide range of business and social contexts.

  • Investment and Financial Services
  • Life Insurance
  • Health Insurance
  • General Insurance
  • Employee Retirement and Benefit Plans

Actuaries assemble and analyze data to estimate the probability and likely cost of an event such as death, sickness, injury, disability, or loss of property. Actuaries also address financial questions, including those involving the level of pension contributions required to produce a certain retirement income level and the way in which a company should invest resources to maximize return on investments in light of potential risk. Using their broad knowledge of statistics, finance, and business, actuaries help design insurance policies, pension plans, and other financial strategies in a manner which will help ensure that the plans are maintained on a sound financial basis.

Most actuaries are employed in the insurance industry. They produce probability tables or use more sophisticated dynamic modeling techniques that determine the likelihood that a potential event will generate a claim. From these tables, they estimate the amount a company can expect to pay in claims. For example, property and casualty actuaries calculate the expected number of claims resulting from automobile accidents, which varies depending on the insured person’s age, sex, driving history, type of car, and other factors. Actuaries ensure that the price, or premium, charged for such insurance will enable the company to cover claims and other expenses. This premium must be profitable, yet competitive with other insurance companies. Within the life and health insurance fields, actuaries help to develop long-term-care insurance and annuity policies, the latter a growing investment tool for many individuals.

Actuaries in other financial service industries manage credit and help price corporate security offerings. They also devise new investment tools to help their firms compete with other financial service companies. Pension actuaries work under the provisions of the Employee Retirement Income Security Act (ERISA) of 1974 to evaluate pension plans covered by that Act and report on the plans’ financial soundness to participants, sponsors, and Federal regulators. Actuaries working for the government help manage social programs such as Social Security and Medicare.

Actuaries may help determine company policy and may need to explain complex technical matters to company executives, government officials, shareholders, policyholders, or the public in general. They may testify before public agencies on proposed legislation that affects their businesses or explain changes in contract provisions to customers. They also may help companies develop plans to enter new lines of business or new geographic markets by forecasting demand in competitive settings.

Consulting actuaries provide advice to clients on a contract basis. The duties of most consulting actuaries are similar to those of other actuaries. For example, some may evaluate company pension plans by calculating the future value of employee and employer contributions and determining whether the amounts are sufficient to meet the future needs of retirees. Others help companies reduce their insurance costs by lowering the level of risk the companies take on. For example, they may provide advice on how to lessen the risk of injury on the job. Consulting actuaries sometimes testify in court regarding the value of potential lifetime earnings of a person who is disabled or killed in an accident, the current value of future pension benefits (in divorce cases), or other values arrived at by complex calculations. Some actuaries work in reinsurance, a field in which one insurance company arranges to share a large prospective liability policy with another insurance company in exchange for a percentage of the premium.

Sample Projects

  • The financial management of their pension plans by collecting employee data, performing actuarial valuations and completing the necessary government filings;
  • Researching and modeling emerging types of insured losses;
  • Merger and acquisition valuations, appraisals and integration issues, plan design and benefit strategy studies, and cost estimates for collective bargaining;
  • The development of medical pricing and cost-containment strategies, and evaluating health care delivery systems and provider risk sharing arrangements;
  • The development of advanced risk management tools for companies to hedge investment guarantees in their products;
  • Conducting industry research and analyzing competitive practices;
  • Providing actuarial, risk and general management services to all types of organizations in the public and private sectors.

Work environment

Actuaries have desk jobs, and their offices usually are comfortable and pleasant. They often work at least 40 hours a week. Some actuaries—particularly consulting actuaries—may travel to meet with clients. Consulting actuaries also may experience more erratic employment and be expected to work more than 40 hours per week.

Related Occupations

Actuaries need a strong background in mathematics, statistics, and related fields. Other workers whose jobs involve such skills include accountants and auditors, budget analysts, economists, market and survey researchers, financial analysts and personal financial advisors, insurance underwriters, mathematicians, and statisticians.

Advancement & Job prospects

Advancement depends largely on job performance and the number of actuarial examinations passed. Actuaries with a broad knowledge of the insurance, pension, investment, or employee benefits fields can rise to administrative and executive positions in their companies. Actuaries with supervisory ability may advance to management positions in other areas, such as underwriting, accounting, data processing, marketing, and advertising. Increasingly, actuaries with knowledge of business are beginning to rise to high-level positions within their companies, such as Chief Risk Officer, Chief Financial Officer, or other executive level positions. These generally require that actuaries use their abilities for assessing risk and apply it to the entire company as a whole. Furthermore, some experienced actuaries move into consulting, often by opening their own consulting firm. Some actuaries transfer to college and university faculty positions.

Skills, knowledge and talents needed for an actuarial Career

  • Actuaries need a strong background in mathematics and general business.
  • Sciences, economics and general business.
  • A bachelor’s degree
  • Mathematics: Calculus, probability
  • Analytical, project management and problem solving skills
  • Finance, accounting, economics
  • Word processing programs,
  • Statistics: statistical analysis programs,
  • Database manipulation,
  • Computer programming languages, such as Visual Basic for Applications, SAS, or SQL.
  • Computer skills like the use of spreadsheets
  • Economic and social trends and legislation, as well as with developments in health, business, and finance.
  • Communication
  • Interpersonal skills
  • Business sense
  • Exams of professional bodies

Education, training for a career in actuarial sciences; and their job prospects

Usually, actuaries earn an undergraduate degree in mathematics, statistics or actuarial science, or a business-related field such as finance, economics or business. While in college, students should complete coursework in economics, applied statistics and corporate finance, which is a requirement for professional certification. Furthermore, many students obtain internships to gain experience in the profession prior to graduation. About 100 colleges and universities offer an actuarial science program, and most offer a degree in mathematics, statistics, economics, or finance.

Some companies hire applicants without specifying a major, provided that the applicant has a working knowledge of mathematics—including calculus, probability, and statistics—and has demonstrated this knowledge by passing one or two actuarial exams required for professional designation. Companies increasingly prefer well-rounded individuals who, in addition to having acquired a strong technical background, have some training in business and liberal arts and possess strong communication skills.

Beginning actuaries often rotate among different jobs in an organization, such as marketing, underwriting, financial reporting and product development, to learn various actuarial operations and phases of insurance work. At first, they prepare data for actuarial projects or perform other simple tasks. As they gain experience, actuaries may supervise clerks, prepare correspondence, draft reports, and conduct research. They may move from one company to another early in their careers as they advance to higher positions.

List of educational Institutions in the USA with courses in Acturial sciences and Insurance

Two professional societies sponsor programs leading to full professional status in their specialty: the Society of Actuaries (SOA) and the Casualty Actuarial Society (CAS).

The Society of Actuaries (SOA)

The SOA certifies actuaries in the fields of life insurance, health benefits systems, retirement systems, and finance and investment. The CAS gives a series of examinations in the property and casualty field, which includes car, homeowners, medical malpractice, workers compensation, and personal injury liability.

Three of the first four exams in the SOA and CAS examination series are jointly sponsored by the two societies and cover the same material. For this reason, students do not need to commit themselves to a specialty until they have taken the initial examinations, which test an individual’s competence in probability, statistics, and other branches of mathematics and finance. The first few examinations help students evaluate their potential as actuaries. Many prospective actuaries begin taking the exams in college with the help of self-study guides and courses. Those who pass one or more examinations have better opportunities for employment at higher starting salaries than those who do not.

Many candidates find work as an actuary immediately after graduation and work through the certification process while gaining some experience in the field. In fact, many employers pay the examination fees and provide their employees time to study. As actuaries pass exams, they are often rewarded with a pay increase. Despite the fact that employers are supportive during the exam process, home study is necessary and many actuaries study for months to prepare for each exam.

Casualty Actuarial Society (CAS)

The process for gaining certification in the Casualty Actuarial Society is predominantly exam based. To reach the first level of certification, the Associate or ACAS level, a candidate must complete seven exams, attend one course on professionalism and complete the coursework in applied statistics, corporate finance, and economics required by both the SOA and CAS. This process generally takes from 4 to 6 years. The next level, the Fellowship or FCAS level, requires passing two additional exams in advanced topics, including investment and assets and dynamic financial analysis and the valuation of insurance. Most actuaries reach the fellowship level 2 to 3 years after attaining Associate status.

The certification process of the Society of Actuaries blends exams with computer learning modules and coursework. After taking the initial exams, candidates must choose a specialty: group and health benefits, individual life and annuities, retirement benefits, pensions, investments or finance/enterprise risk management. To reach the Associate or ASA level, a candidate must complete the initial four exams, the coursework in applied statistics, corporate finance and economics required by the SOA and CAS, eight computer modules with two corresponding assessments and a course in professionalism. This process generally takes from 4 to 6 years. To attain the Fellowship or FSA level, a candidate must pass two additional exams within a chosen specialty and must complete three computer modules and a professionalism course. Attaining Fellowship status usually takes an additional 2 to 3 years after becoming an Associate.

Pension actuaries

Specific requirements apply to pension actuaries, who verify the financial status of defined benefit pension plans for the Federal Government. These actuaries must be enrolled by the Joint Board of the U.S. Treasury Department and the U.S. Department of Labor for the Enrollment of Actuaries. To qualify for enrollment, applicants must meet certain experience and examination requirements, as stipulated by the Board.

Job prospects for actuaries in the USA

  • Median annual earnings of actuaries were $82,800 in 2006. The middle 50 percent earned between $58,710 and $114,570. The lowest 10 percent had earnings of less than $46,470 while the top 10 percent earned more than $145,600. According to the National Association of Colleges and Employers, annual starting salaries for graduates with a bachelor’s degree in actuarial science averaged $53,754 in 2007.
  • Employment opportunities should remain good for those who qualify, because the stringent qualifying examination system restricts the number of candidates.
  • Employment of actuaries is expected to increase by about 24 percent over the 2006-16 period, which is much faster than the average for all other occupations. Employment growth in the insurance industry—the largest employer of actuaries—is expected to continue at a stable pace, while more significant job growth is likely in other industries, such as health care and consulting firms.
  • Steady demand by the insurance industry should ensure that actuarial jobs in this key industry will remain stable during the projection period. Although relatively few new jobs will be created, actuaries will continue to be needed to develop, price, and evaluate a variety of insurance products and calculate the costs of new risks. The demand for actuaries in life insurance has been growing rapidly as a result of the rise in popularity of annuities, a financial product offered primarily by life insurance companies. In addition, the risk of terrorism and natural disasters has created a large demand for actuaries in property insurance.
  • Some new employment opportunities for actuaries should also become available in the health-care field as health-care issues and Medicare reform continue to receive attention. Increased regulation of managed health-care companies and the desire to contain health-care costs will continue to provide job opportunities for actuaries, who will also be needed to evaluate the risks associated with new medical issues, such as genetic testing and the impact of new diseases. Others in this field are involved in drafting health-care legislation.
  • A significant proportion of new actuaries will find employment with consulting firms. Companies that may not find it cost effective to employ their own actuaries are increasingly hiring consulting actuaries to analyze various risks. Other areas with notable growth prospects are information services and accounting services. Also, because actuarial skills are increasingly seen as useful to other industries that deal with risk, such as the airline and the banking industries, additional job openings may be created in these industries.
  • Despite the increase in employment overall, there has been some decline in the demand for pension actuaries. This is due in large part to the decline of defined benefit plans, which required review by an actuary, in favor of investment based retirement funds.
  • Actuaries held about 18,000 jobs in 2006. Over half of all actuaries were employed by insurance carriers. Approximately 21 percent work for professional, scientific and technical consulting services. Others worked for insurance agents and brokers and in the management of companies and enterprises industry. A relatively small number of actuaries are employed by government agencies.
  • Employment of actuaries is expected to grow rapidly through 2016. Job opportunities should remain good for those who qualify, because the stringent qualifying examination system restricts the number of candidates.
  • Opportunities for actuaries should be good, particularly for those who have passed at least one or two of the initial exams. In addition, a small number of jobs will open up each year to replace actuaries who leave the occupation to retire or transfer new jobs. Candidates with additional knowledge or experience, such as computer programming skills, will be particularly attractive to employers. Most jobs in this occupation are located in urban areas, but opportunities vary by geographic location.
  • About 6 out of 10 actuaries are employed in the insurance industry.

Consulting Actuaries

  • Association of Consulting Actuaries UK London Tel: 020 7382 4594 acahelp@aca.org.uk
  • DW Simpson Global Actuarial Recruitment serves the Actuarial profession Worldwide in all disciplines, recruiting at all levels from Entry-Level through Fellowship, and works with clients on both retained and contingent searches. Established in 1989, we are the largest firm dedicated to Actuarial Search and have a working relationship with most firms that employ Actuaries. We have an actuarial recruitment staff of 50 and all fees are paid by the hiring company. Please take a look today at a few of the hundreds of Actuarial Positions that we are currently working on, and simply Click and Submit those that interest you.

List of educational Institutions in the UK with courses in Acturial sciences and Insurance

Towers Perrin is among the world’s largest employers of actuaries. Their HR Services line of business provides actuarial consulting in the areas of health and welfare, and retirement/pension benefits. Their INDIA representatives for only their HR practice (and not their acturial practice )is Cerebrus Consultants


List of educational Institutions in India with courses in Acturial sciences and Insurance

Actuarial Society of India / Institute of Actuaries in India (Globe Chambers)

The Institute of Actuaries of India through Avinash Ingle: Executive IT & Web _ 302 Indian globe Chambers, 142 Fort St, Mumbai 400 001: Ph 2269 1049/207. They have a Student Handbook

Eligiblity Criteria

A person is eligible to be considered for admission as student member if he satisfies the following conditions .

  • Should have completed 18 years of age
  • Should have attained anyone of the following Educational Standards
    • Passed 10+2 (H.S.C) or equivalent with at least 85% in Mathematics / Statistics
    • Graduate or Post Graduate in Maths/Stats/Econometrics
    • Any Engineer / CA / CS / MBA (Finance) / MCA
    • Any member of Society of UK / US / Australia
    • Fully qualified members of following Professional bodies such as
      • The Institute Of Chartered Accountants of India(ICAI)
      • The Institute of Cost and Works Accountant of India (ICWAI)
      • The Institute of Financial Analyst of India(IFAI)
      • The Insurance Institute of India (III) passing with subjects 81- mathematical Basis of Insurance and 82- Statistics
    • A students of following actuarial bodies provided atleast one subject has been passed from these bodies
      • Society of Actuaries , USA
      • Casualty Actuarial Society, USA
  • An application should be recommended by a member of professional body like such as Institute Of Chartered Accountant of India, Institute of Cost & Works Accountant of India and Institute Of Company Secretary of India
Examination

The study course of ASI is divided into four stages :

  • Core Technical Stage : This consists of 8 subjects each with one paper of 100 marks ( CT1 to CT8) and all are compulsory
  • Core Application Stage : This consists of 2 compulsoy subjects ( CA 1 to CA3) , CA1 consists of two papers 9 CA 1 and CA 1 2) whereas CA2 and CA3 shall have one paper each
  • Specialist Technical Stage : This stage consists of 6 papers ( ST1 to ST6) and the students would required to choose any two
  • Specialist Application Stage : This again shall consist of 6 papers (SA1 to SA6) and the student has to clear anyone.
List of Institutions In India
  • Bishop Herber College, Trichy, Tamil nadu - 620 017 Website : www.bhc.ac.in
  • Ernakulam Insurance Institute, C/O LIC Of India Divisional Office, Jeevan Prakash, M.G.Road, Ernakulam - 682 011
  • The National Insurance Academy, Balewadi Bancer Road, Pune.
  • College Of Insurance, Greeshnan Assurance Building, Sir PM Road, Fort Mumbai - 400 001
  • Insurance Training Centre , 25 Baranshi Glash Street, Calcutta - 700 007
  • College Of Vocational Studies, Delhi University , Triveni (Sheikh Sarai) Delhi - 110 017
  • Directorate of Distance Education, Alagappa University, Karikudy, Tamil Nadu 630 003
  • Tolami Institute Of Management Studies, P.B.No.11 Adupur, Gujarat - 370 205
  • Kalyani University, Kalyani Nadia Dist West Bengal - 741 235

See Also:

Under-graduate courses in actuarial science in India

There are at least four options available.

The Insurance Institute of India Mumbai _ Universal Insurance Building

This offers courses in actuarial science, ranging from six months to two years. It conducts qualifying examinations for the insurance sector. The Insurance Institute of India formerly known as Federation of Insurance Institutes (J.C. Setalvad Memorial) was established in the year 1955.

  • It sells study material on Actuarial Science.
    • IC A1 Foundations of casualty Actuarial Science - Part1 General Rs. 75
    • IC A2 Foundations of casualty Actuarial Science - Part2 General Rs. 75
  • The contact info is Universal Insurance Building, 6th Floor, Sir P.M. Road, Fort Mumbai – 400 001.

Tel. 2287 2923 no reply on Monday @ 1045 hrs /2287 4722 busy on Monday @ 1045 hrs / 2285 1879 busy on Monday @ 1045 hrs / 2289 4800 no reply on Monday @ 1045 hrs / 2289 4870 / 2289 4871 /2289 4872/2289 4867.. Fax 91-022-22873491 Email: iiiexams@vsnl.net

  • Actuarial Science Exam : Subject Code / Subject / Branch / Exam Date / Exam Time

01 Principles of Insurance Life/Non Life 04-May-2008 9.30 A.M. - 12.30 P.M.

11 Practice of general Insurance Non Life 04-May-2008 2.00 P.M. - 5.00 P.M.

A1 Foundation of Casualty Actuarial Science A1 Actuarial Science Examination 11-May-2008 9.30 A.M. - 12.30 P.M.

A2 Foundation of Casualty Actuarial Science A2 Actuarial Science Examination 18-May-2008 9.30 A.M. - 12.30 P.M.


  • It has a College Of Insurance (Gresham Assurance House ) under its wings. They do not have any acturial courses. They are however accredited by the Insurance Regulatory and Development Authority (IRDA) as an approved training institute for conducting training to the candidates before appearing for agents pre-recruitment test to act as insurance agents.

Address: Gresham Assurance House, 4th Floor, Sir P.M.Road, Fort Mumbai – 400 001. Tel.: 2266 0095 busy on Mon @ 1030 hrs., Fax 91-22-22693419 , Email: college_insurance@yahoo.co.in

Registrar C. S. Nair , phone (D) 91-022-2265 0760 (no reply on Mon @ 1030 hrs )E mail: insfeder@bom5.vsnl.net.in

Brochure mentions a cell phone : 93246 10215 is with a knowledgeable person.

St. Xaviers' College for the Statistics Course

St. Xaviers' College

D. S. Institute of Acturial Sciences, Juhu under the D. Y. Patil Open University

D. S. Institute

Post Graduate Courses in Acturial Sciences in India

Job prospects In India for actuaries

  • Job prospects In India for actuaries
    • Actuary specialist, 0-4 years, Student / professional Acturies with 1 to 2 papers passed ASI or Masters in Stats/MATHS who want to persue carrer in Acturial Sciences
    • Manager 0-5 years, 4-10 lacs, Actuarial Team Members. Graduate in Statistics/Mathematics. Should have passed at least two papers of the examination conducted by Actuarial Society of India.
    • Assistant Manager - Product Management - Medical Underwriter for a Leading Insurance Company., 2 -6 years of work experience into Insurance Industry.
  • Darwin Rhodes (India) P. Ltd The Mumbai office is part of one of the world's leading recruitment consultancies specialising in the placement of actuarial professionals. 501 C1, Poonam Chambers, Shivasagar Estate, Dr. Annie Besant Rd., Worli, Mumbai, 400 018 / Tel 3048 1666 Recruit-In@DarwinRhodes.co.In

Consulting Actuaries

  • K A Pandit & Co., Churchgate House, 32/34 V. N. Rd., Fort, Mumbai 400 001 INDIA. Tel +(91-22) 2204 2231 & 6631 8420, DK.Pandit@KA-Pandit.com . He has asked that we contact Mr. Pandit at C/201 Remi Biz Court, Off. Veera Desai Rd., Andheri(W), Mumbai 400 058 INDIA Tel. 66952119 & 26732006 Akshay@ka-pandit.com
  • Thanawalla & Co., Mumbai ( Arpan Thanawalla ? )
  • NR Associates, Hyderabad India provides Business and Actuarial Valuation Services. N.R. Rao established the firm in 2002 after his successful career with an Engineering and Consultancy Company.
  • R Ramakrishnan, Chennai. Consulting actuary. Retired Chief Actuary, Life Insurance Corporation (LIC)

Readings upon the subject of the Actuarial Profession

To dos

  • Enroll at the The Institute of Actuaries: then study the course material of the actuarial course (also to enquire the distinction between the Actuaries Society and the Institute )
  • Get some work experience. This will give an opportunity to see what the job entails. It also gives a chance to network this will be a help if one decides to pursue a long-term career as an actuary.
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