What is an Actuarial Science?

These days, the roles of an Actuary is in high demand, leading us to the field of Actuarial Science.
Actuarial Science has become one of India’s most high-demand jobs. This is the perfect field for someone excellent in Mathematics, Statistics, Probability, Finance, Economics and Computer Science.
Actuarial science has now become a very trending topic amongst various Maths enthusiasts. Hence let’s begin with what is an actuarial science?
Actuarial Science is a field that uses mathematical and statistical methods to assess and evaluate an organization’s risks and find possible solutions to overcome or reduce them. In addition, it helps solve important problems concerning an organization’s financial area, due to which Actuarial Science has become one of the highly demanding jobs.

To get a job as an actuary, you need to have a strong hold over mathematics, statistics and data analysis. Having a good knowledge of probability will help you analyze future risks and their likelihood of occurring. Having this knowledge can help you take the required actions to prevent it.

Looking for a Career in Actuarial Science ?

In actuarial science, you also require a strong finance, economics and computer science base.

The reason for enrolling in an actuarial science academy is to develop all skills and knowledge required to pass the actuarial science exam. Once you are recognized by the Institute of Actuaries of India, you would be qualified to bag a job with a good salary in the field of Actuarial Science.

It isn’t necessary that you remain in the field of actuarial science after studying it. You can explore other fields too. For example, you can enter into accounting, auditing, or a business analyst or financial/ risk consultant.

But having a background in actuarial science will surely be an advantage for you.

In this ever growing time of growing industry, each business setup requires a person who can help them predict future risks. Not only that, but also analyze and determine possible solutions to avoid. An actuary covers this all. Hence the demand for this role is increasing profusely. It is an interesting job for people who truly enjoy working with stats and maths and have a good grasp of probability. So if you have planned to take up this field, go ahead, as it gives you a good amount of opportunities and salary as your experience keeps increasing.

Eligibility for Actuarial Science

There are a set of eligibility for actuarial science that the candidates must cross-check before applying for actuarial science. Given below are the basic requirements to qualify to pursue Actuarial Science.

  • You can pursue actuarial science after UG as well as PG. 
  • The basic requirement is that you pass your 10+2 examination with a minimum of 60% and 70% aggregate in Maths. 
  • Your first Language must be English.
  • There is no age limit for taking the exam.
  • Mathematics and Statistics should be major subjects during graduation.
  • The candidate should have a minimum 50% aggregate while passing B.Sc./B.Com.

Actuarial Science Entrance Exams

The Institutes of Actuaries of India (IAI) conducts the university-level entrance exam for Actuarial Science. The exam is Actuarial Common Entrance Test (ACET).

Following is the information regarding the same that you should keep in mind:

  • It is taken in three stages CT, CA and ST.
  • The ACET exam is conducted thrice a year- April, June and December.
  • A candidate has to qualify all 3 stages to become an actuary.
  • It consists of 15 exams in total.
  • A candidate clearing 10 exams qualifies as an Associate.
  • A candidate clearing all 13 exams qualifies as a Fellow by IAI.
  • It is compulsory for candidates that have qualified ACET to register themselves before 3 years for the membership.

Actuarial Science Course

Several subjects are covered under the Actuarial science course. However, the entire course mainly focuses on Mathematics, Statistics, Probability, Finance, Economics and Computer Science.

The list below consists of the important subjects that are found common irrespective of the institute you take admission in.

A very important subject that builds the foundation of an actuary, especially if they are planning to apply for a field that involves risk analysis.
One of the interesting subjects that will have you engaged and also be highly rewarding during your job.
The knowledge you will get through this will create a strong base that will be highly beneficial for executing various tasks.
If you are interested in making a career as a Mathematician and interested in Research and Development, this should be your focus point.
It is essential to build the required base for managing future risks, which will help you bag good opportunities in future.

  • Having good knowledge of this subject will help you with financial analysis.

  • An addition to your skill set that will widen your range of opportunities.

  • This subject helps you assess the risk and minimise the cost of that risk, especially when it comes to mathematical, statistical and financial modelling.

  • A subject which readies you to enter the field of the Insurance sector.

  • This helps you gain knowledge of how to study information in different areas of the business to maximise profit and productivity.

  • This gives a clear understanding of the production and sale of goods and services in different countries.

Scope of Actuarial Science in India

The roles of an actuary is in high demand all across the globe. This signifies the importance of Actuarial Science as a course. The opportunities for an Actuary keep on increasing because of the growth of Industries and several Enterprises. And so, each of these successful companies requires a skilled actuary who can help them predict trends and future risks and develop strategies to avoid or lessen the risks. The most recognized certification for an actuary is by Chartered Enterprises Risk Actuary (CERA). You will find more opportunities for Actuarial Science in India because of the scarcity of actuaries. Due to this, actuarial science will guarantee you high-paying jobs as you keep building on your experience.

Salary & Roles of an Actuary

As an actuary, you can bag various kinds of job roles and get a good hike over the years of experience you gain. Below is the list of popular job roles pursued by individuals who have taken up actuarial science.

SR. NO. JOB ROLE AVG. SALARY PER ANNUM
1. Financial Analyst Rs. 4.3 Lakhs
2. Data Analyst Rs. 4.6 Lakhs
3. Senior Financial Analyst Rs. 6.1 Lakhs
4. Accountant Rs. 2.5 Lakhs
5. Finance Manager Rs. 10.5 Lakhs
6. Senior Business Analyst Rs. 10.18 Lakhs
7. Mathematicians Rs. 8.5 Lakhs
8. Postsecondary Teachers Rs. 12.5 Lakhs 

 

The three factors that affect the salary range are:

(i) Experience: More experience you have in the field, the higher your salary gets. You will see a noticeable hike after only one year of experience.

(ii) Expertise: Your number of skills will only take you higher. Two types of skills are present in this field- popular skills and highly sought-after skills. Focus more on the highly sought-after skills.

(iii) Location: Where you plan to join is also essential. Places like Mumbai will offer you a good salary compared to a few others in question.

Skills Required for Actuary

There are certain skill sets that are required when it comes to the field of actuarial science. These mentioned skills will surely come in handy in terms of executing your work.

  1. Problem Solving Skills– You must be a problem solver with analytical skills that will identify patterns in complex data for a particular outcome.
  2. Outstanding Mathematical Skills– The role of an actuary is all about maths; hence you need to have maths as one of your fortes.   
  3. Knowledge of Business and Finance– Having a strong grasp of this area can help you bag good job opportunities in MNC and renowned financial firms.
  4. Communication and Interpersonal Skills– As an actuary, you will have to explain technical terms in simple language to the common people, due to which you must have good communication skills.

The roles of an actuary is fun and interesting in the long run. Especially if you have most of the skills mentioned above, the path of actuarial science will be smooth while you enjoy its benefits.

Actuarial Science is a profession where Actuaries use their mathematics and statistics skills to understand, assess and solve problems related to the
financial impact of risk and uncertainty in the business, thereby help us take informed decisions which will lead to the least probability of financial losses.
Actuaries help to manage risk by helping organizations plan for the future and protect themselves from loss.

Actuaries are experts in-

  • Evaluating the likelihood of future events-using numbers.
  • Designing creative ways to reduce the likelihood of undesirable events.
  • Decreasing the impact of undesirable events that do occur.

For example- Establishing retirement plans, determining minimum contribution to be paid by employer and employee, funding level of the scheme, determining the amount of car premium charged by insurance company from its customers by making an allowance for profit, expenses and a contingency margin, determining the premium to be charged by life insurance company in case of death benefit to be provided to member insured. undertaking asset liability matching.

One has to clear 13 subjects in the actuarial science exam conducted by IAI or IFoA. The exams are globally recognized.

With the recent changes in employment opportunities available for actuaries Exam Curriculum has changed to reflect the skills, knowledge and attributes required in an ever changing business environment.

Core Principles Stage

It comprises of seven subjects covering following areas-

CS1 – This will be examined in a set of 2 papers. CS1A is 3 hours paper based assessment to taken at examination centre and CS1B is 1 hour 45 minutes online exam which can be taken at home or in office and tests R programming along with Statistics. Both elements need to be taken at the same examination sitting. Failure to reach the overall pass mark will require both elements of assessment to be retaken.

  • Risk Modelling and Survival Analysis

CS2 – This will be examined in a set of 2 papers. CS2A is 3 hours paper based assessment to taken at examination centre and CS2B is 1 hour 45 minutes online exam which can be taken at home or in office and tests R programming along with Statistics and Modelling. Both elements need to be taken at the same examination sitting. Failure to reach the overall pass mark will require both elements of assessment to be retaken.

CM1 – This will be examined in a set of 2 papers. CM1A is 3 hours paper based assessment to taken at examination centre and CM1B is 1 hour 45 minutes online exam which can be taken at home or in office and tests Excel programming along with Actuarial Modelling and mathematical techniques. Both elements need to be taken at the same examination sitting. Failure to reach the overall pass mark will require both elements of assessment to be retaken.

  • Loss Reserving and Financial Engineering

CM2 – This will be examined in a set of 2 papers. CM2A is 3 hours paper based assessment to taken at examination centre and CM2B is 1 hour 45 minutes online exam which can be taken at home or in office and tests Excel programming along with Reserving and financial market techniques. Both elements need to be taken at the same examination sitting. Failure to reach the overall pass mark will require both elements of assessment to be retaken.

  • Business Finance

CB1- It is 3 hours paper based assessment to taken at examination centre.

  • Business Economics

CB2- It is 3 hours paper based assessment to taken at examination centre.

  • Business Management

CB3- It is a practically focused programme consisting of business game, completion of workbook and an online test. Candidates are encouraged to have work experience before entering for CB3. The final assessment will continue to be an online test and not a 3hrs examination.

Core Practices Stage

It comprises of three subjects covering following areas-

  • Actuarial Practice

CP1 consists of 2 papers. Paper 1 is 3 hours 15 minutes written assessment to be taken at examination centre and Paper 2 is 45 minutes reading time and 2 hours 30 minutes paper based assessment to be taken at examination centre.  Both the elements need to be taken at same examination sitting.

  • Modelling Practice

CP2 is an online exam consisting of 2 papers. Both paper 1 and paper 2 are 3 hours 15 minutes problem based assessment which can be taken at home or in office. Both the elements need to be taken at same examination sitting.

  • Communications Practice

CP3 is an online exam consisting of 3 hours paper based assessment to be taken at home or in office.

Specialist Principles Stage

It comprises of 9 subjects covering following areas out of which we have to clear only 2 to be qualified as Fellow. Each of them will be assessed using 3 hours and 15 minutes paper based exam.

  • SP0- Master’s Level Thesis
  • SP1- Health and Care
  • SP2- Life Insurance
  • SP4- Pensions
  • SP5- Investment and Finance
  • SP6- Financial Derivatives
  • SP7- General Insurance- Reserving
  • SP8- General Insurance- Pricing
  • SP9- Enterprise Risk Management

Specialist Advanced Stage

It comprises of 6 subjects covering following areas out of which we have to clear only 1 to be qualified as Fellow. Each of them will be assessed using 3 hours and 15 minutes paper based exam.

  • SA0- Research Master’s Thesis
  • SA1- Health and Care
  • SA2- Life Insurance
  • SA3- General Insurance
  • SA4- Pensions
  • SA7- Investment and Finance

To qualify as an Associate, you will be required to complete following examinations-

  1. Core Principles
  2. Core Practices

To qualify as a Follow, you will be required to complete following examinations-

  1. Core Principles
  2. Core Practices
  3. Specialist Principles
  4. Specialist Advanced

Those who plan to enroll as student members of IAI, they have to clear ACET – “Actuarial Common Entrance Test” to enter into the world of actuary. The only eligibility criterion is that the student must have passed secondary level examination or an equivalent examination with English and Mathematics subjects at secondary level. For more information Click Here.

Those who have scored a minimum 85% in class XII Mathematics or 55% marks in graduation (Mathematics or Statistics) or 55% marks in MBA Finance are straight away eligible for the membership of the institute. However, if students fail to meet the above criteria then he/she is required to clear a non membership examination (CM1/CS1) to be eligible for a membership. For more information Click Here.

  • Colleges and universities
  • Banks and investment firms
  • Public accounting firms
  • Labor unions
  • Rating bureaus
  • Life Insurance Companies
  • General Insurance Companies
  • Pension Fund Companies
  • Reinsurance Companies
  • Risk Management Companies
  • Consultancies

The Academic Junction aims to support you throughout your career so that you can develop or enhance the knowledge, skills and attributes appropriate to both current and future needs of actuarial practice. We are preparing our students for better education, problem-solving and analytical skills and the ways to succeed in this competitive global economy. We ensure to provide superior quality education and job assurance and a life worth living and thriving for. We are leading trainers in Actuarial Science Coaching in India. Our Services are not just restricted to India but we provide global services too. You are invited to visit us or call us for any counseling sessions that you might be interested in and help us to serve you better and make it easy for you to be business leaders. We also provide career counseling sessions to help students decide which streams to choose after class XII. Our faculties are there to interact personally with students to guide them in the right direction to help them achieve a big success in their lives. We follow the highest level of professionalism and maintain integrity in all our operations and actions.