All about Actuary in India

The world is changing, and so is its dynamics with the business environment. During the 17^th Century, corporations started to overcome geographical boundaries. Consequently, the reach to their prospective potential customers increased exponentially. Since then, every ongoing business is exposed to some unavoidable risks. Also, it would be fair to mention that expansion and innovation demand a certain level of a risk-averse business individual. But, at the same time, every artificial/real person demands a certain quantification of their risk. Here, the role of an actuary comes into play.

As per Institute of Actuaries of India (IAI), “Actuary” means a person skilled in determining the present effects of future contingent events or in finance modelling and risk analysis in different areas of insurance, or calculating the value of life interests and insurance risks, or designing and pricing of policies, working out the benefits recommending rates relating to insurance business, annuities, insurance and pension rates on the basis of empirically-based tables and includes a statistician engaged in such technology, taxation, employees’ benefits and such other risk management and investments and who is a fellow member of the Institute.

In simplified terms, an actuary is a certified professional who examines the financial repercussion of the risk. They apply mathematics, statistics and financial theory to study uncertain upcoming events, particularly those of, related to insurance and pension programs.

How to become an actuary in India?

Details of Exam:

ACET Exam:

Actuarial Common Entrance Test: the entrance test is an eligibility test with 50% score as pass percentage.

Eligibility: Candidate must have appeared 10+2 examination or an equivalent examination with English as one of the subjects at 10 + 2 level.

Registration fee: INR3000 inclusive of the cost of one Sample Question Paper, Indicative Solution and Online Exam

Structure of Exam:

The examination will be a three-hour computer-based exam of 100 marks which will have 70 MCQ with one correct answer for each question. The allocation of Marks will be as under:

Mathematics – 30 marks
Statistics – 30 marks
Data Interpretation – 15 marks
English – 15 marks
Logical Reasoning – 10 marks

The total distribution of questions would be:

45 questions – 1 mark each
20 questions – 2 marks each
05 questions – 3 marks each

After you pass the ACET exam, you’re eligible to become a member of IAI and can follow the procedure for the admissions in the link below:

https://www.actuariesindia.org/downloads/OnlineAdmissionusermanual.pdf

After you register to IAI you need clear 15 papers in 4 stages to successfully qualify as an Actuary from IAI

Stage1: Core Technical (CT)

In stage 1 Core Technical Exam, it is mandatory to clear all the 9 below-mentioned exams:

CT1 Financial Mathematics

CT2 Finance and Financial Reporting

CT3 Probability and Mathematical Statistics

CT4 Models

CT5 General Insurance, Life and Health Contingencies

CT6 Statistical Methods

CT7 Business Economics

CT8 Financial Economics

CT9 Business Awareness Online Module (Practical Exam)

Stage 2: Core Application (CA)

In stage 2 Core Application Exam, it is mandatory to clear all the 3 below-mentioned exams:

CA1 Actuarial Risk Management

CA2 Model Documentation Analysis and Reporting (Practical Exam)

CA3 Communication (Practical Exam)

Note: No minimum internship or work experience is required as per IAI but in order to become an associate or a fellow member of the institute you need to have certain years of work experience.

After a candidate qualifies all the 9 CT papers and all the 3 CA papers, that is 12 papers in aggregate and with 1 year of min work experience, you are qualified to become an Associate Member of the IAI.

Stage 3: Specialist Technical (ST)

This stage offers specialization to choose any 2 subjects out of the 6 offered:

ST1 Health and Care

ST2 Life Insurance

ST3 Pension and Other Employee Benefits

ST4 Finance and Investment A

ST5 Finance and Investment B

ST6 General Insurance Reserving and Capital Modeling Specialist Technical

ST7 General Insurance Pricing Specialist Technical

ST8 Enterprise Risk Management

Stage 4: Specialist Application (SA)

Here as well you can choose 1 subject from any of the following (it is likely to be corresponding with the ST Subjects)

SA1 Health and Care

SA2 Life Insurance

SA3 General Insurance

SA4 Pension and Other Employee Benefits

SA5 Finance

SA6 Investment

And, after a candidate qualifies all the afore-mentioned 15 papers he/she can become a Fellow Member of the IAI.

However, to register as a Fellow member of the IAI he/she must have 3 years of work experience

So there is no Compulsory articleship/internship to become an actuary unlike in CA/CS but to even qualify to register as an associate/fellow member, a candidate needs to work for 1/3 year(s).

Where does an actuary work?

The various areas/Job opportunities where an actuary works have been listed below:

Insurance Industry: An insurance industry primarily works by assessing the risks associated with an individual and thereafter quantifying the same in terms of periodic premium. This industry opens the door for actuaries, demand the very core function upon which the whole sector depends i.e, assessment of risk.

MNCs/Private Co-operations: The MNCs always welcome a proficient view which can help them to frame their premeditated managerial decisions. The financial and budgetary decisions are taken after due considerations of risk management experts

Consultancy Firms: Being a professional, actuaries can also run their own consultancy firm advising start-ups and other mid-level companies in drafting business plans, evaluation of assets and liabilities, risk assessment of portfolios of executive-level individuals.

The aforementioned list is not exhaustive; hence an actuary can have numerous other opportunities in or outside India wherever there is a scope of managing and quantifying risks.