If you enjoy delving into the realm of mathematics or have a passion for crunching numbers, you may consider a career in actuarial science. What is actuarial science? In essence, it involves assessing risk in the insurance industry, with the aid of mathematical and statistical methods. “With the Indian insurance industry growing by about eight per cent a year, the prospects of making a career in this field are bright,” says Ashok Poddar, regional manager, actuarial, Life Insurance Corporation of India, Calcutta.

Actuarial science is a specialised field and all students are required to pass a qualifying exam — which calls for proficiency in mathematics and statistics — from the Institute of Actuaries of India (IAI), Mumbai.

Students wanting to qualify the IAI exams could come from a range of backgrounds. They can either have a Plus Two qualification with 85 per cent in mathematics or statistics or a graduate or postgraduate degree with mathematical subjects that include any discipline of engineering, computer sciences and econometrics. While an MBA in disciplines comprising mathematical or statistical content is considered, qualified chartered accountants, cost accountants and chartered financial analysts are also eligible.

“An actuary studies insurance schemes and interacts with clients every day regarding their financial commitments. He regularly looks out for patterns in the soaring or plummeting of market prices in different shares and mutual funds,” says Bhudeb Chatterjee, partner of B. Chatterjee and Company, an actuarial firm in Calcutta.

A qualification in this area comprises several stages, which are offered by the Institute for Prospective Actuaries. The initial actuarial exams are the CT (core technical) and CA (core applications) stages. “The core technical stage is designed to give students a solid grounding in key actuarial techniques,” says A.G.D. Wagle, secretary general of IAI. There are nine subjects, including financial mathematics, probability and mathematical statistics, and studies in general insurance and life and health contingencies.

The CA stage has three subjects that underpin actuarial concepts such as risk and funding. The main concepts subject is assessed by two papers covering assets, liabilities and asset-liability management. “Communications is also a CA topic that evaluates a candidate’s ability to communicate with a general audience,” adds Wagle.

Actuaries are expected to have a sound knowledge of demography and strong logical and analytical skills. “Besides, they have to interact with lay people on financial and insurance projects but sometimes are unable to get across their point since they tend to speak in technical terms,” says Poddar. He emphasises it is essential for actuaries to be able to discuss schemes with clients lucidly.

Students who pass all the subjects in the CA and CT series become associate members of the IAI. Students enrolled for the CT and CA series can work as actuarial apprentices at any insurance company. Explains Poddar, “We recruit actuarial apprentices with a background in mathematics, statistics and financial economics and give them a chance to pass three or four subjects from the IAI.” They are then absorbed as regular employees.

Among the few private institutes offering actuarial science courses in India is Mumbai’s Narsi Monji Institute of Management Science (NMIMS), which offers an MBA in actuarial sciences.

Number game

The number of seats is 30 and candidates have to be graduates in subjects related to mathematics. Non-graduates need 85 per cent in mathematics. “The two-year course costs Rs 4 lakh,” says Shweta Dixit, who’s in charge of actuarial sciences at NMIMS.

The Amity School of Actuarial Science and Insurance in Delhi has an MSc in actuarial science, an MBA in insurance and a postgraduate diploma in insurance. For the MSc course, students should have done their graduation in a maths-related subject with at least 65 per cent marks. A CAT / MAT score is needed, in addition to 50 per cent marks at the graduate level for the MBA programme and 45 per cent marks for the postgraduate diploma in insurance. “The courses offered by the private institutes are not accredited with the IAI but the Amity School has applied for recognition from IAI,” says R.R. Grover, director of the Amity School of Insurance and Actuarial Science.

The Indian Statistical Institute (ISI) has an agreement with the Institute of Actuaries in India that exempts ISI graduates from passing some professional examinations of IAI. “Graduates of the BStat (hons) MStat and MS (quantitative economics) are exempted from some CT qualification exams provided they perform well in the relevant examinations conducted by ISI,” says Debasis Sengupta, professor, applied statistics unit, ISI, Calcutta.

Students who have cleared the CT and CA stages at IAI can progress to the specialist technical and specialist applications level qualifications. Students have to opt for two subjects out of six to pass the specialist technical stage. The last stage of the qualifications offered by IAI is special applications where students choose one subject for specialisation. Those who have passed all the examinations of CT, CA, ST and SA series are entitled to be Fellows of the IAI. “Getting an IAI Fellowship is a difficult task. Only three out of 100 qualify,” says Chatterjee.

“In addition to both general and life insurance companies, actuaries are employed by the Tariff Advisory Committee, firms of consulting actuaries and the industry’s regulatory body, the Insurance Regulatory and Development Authority (IRDA),” reveals Wagle. Employment opportunities are pretty good in social security schemes, such as various life insurance schemes, or as financial analysts. “LIC alone hired around 150 actuarial apprentices last year. Not all go on to become fellow actuaries. We have around 10 full fledged actuaries,” says Poddar. “The shortfall of actuaries in the Indian industry is 20 to 25 per cent,” he adds.

There are chances of overseas jobs too since students with IAI qualifications are recognised by the Institute of Actuaries in the UK and are able to practice across the world.

Salaries for actuaries start from Rs 8,000-10,000 and can rise as high as Rs 50 lakh a year for individuals with 10 years’ experience. “Our students, on an average, receive job offers of Rs 4 lakh a year,” says Grover. “The job is also very rewarding and the liberal economy can only add to the benefits,” he adds.

So if you are hooked to numbers, why not be an actuary?