Actuarial science is a profession deals with various mathematical and statistical methods to analyze the present and past data to model future possibilities. It is one of the best career to choose if you have enough skills and interest doing this job. We will see here in this article about an actuary, the work role, education qualifications required, the skills required, and how to become an actuary.
What is an actuary?
Actuary is a person who analyzes the past and present scenarios and assess their impact on future uncertainties. This analysis involves various mathematical and statistical methods related to the business management, insurance problems and risk management. They help to take finance decisions by more analysis, assessing the risk involved, and modeling the future in financial terms.
Actuaries provide assessments of financial security systems, with a focus on their complexity, their mathematics, and their mechanisms (Trowbridge 1989, p.7) [From Wikipedia (on 15 Oct. 2016)]
Roles and Responsibilities of an Actuary
The role an actuary perform will vary over time, by country, practice area, relationship to the financial institution, corporate structure and culture. Actuaries have to work with other professionals but not limited to like accountants, auditors, lawyers, risk managers, senior executives and board members of insurance companies, trustees of pension funds, elected officials, civil servants, underwriters, investors, etc.
They also have to prepare different reports and presentations like valuation reports, risk reports. So they must also have to possess good presentation and communication skills.
Different roles an actuary has to do includes but not limited to designing and pricing of policies in insurance, valuation of insurance business, ensuring solvency margin and adequate liquidity for insurance policies, define risk factors and determine premia to be charged, etc. The role has now been extended to risk management investment, employee benefit, taxation, revenue growth, controllable margin, client relationship etc.
An actuary evaluates the likelihood of future events using numbers which obtained from past and present scenarios. They make the insurance companies to understand the risks involved and plan their future accordingly.
Actuaries work role also involves to maintain a balance between designing and pricing products so that company has enough money to run business and has enough business to continue running.
Educational Qualification Required
The minimum educational qualification required to become an actuary is HSC (10+2) passed with English as one of the subjects at 10+2 level. Bachelor’s degree in subjects like maths, statistics, finance, economics etc. will be a good advantage when you want to become an actuary. 10+2 is a minimum qualification and all the graduates, post graduates, engineers, MBAs, CAs, ICWAs, etc. can become an actuary.
Knowledge and Skills Required
An actuary is expected to have good knowledge in mathematics, finance, statistics, financial modeling, risk management, quantitative techniques, etc.
The basic skill requirements are logical reasoning and problem solving, communication skills, excellent business awareness skills, presentation skills, development and application of financial models, innovative thinking, risk management skills, quantitative problem solving, etc.
How to become an Actuary?
To become an actuary one have to pass exams conducted by actuarial bodies and to attain membership in those bodies. One has to become a student member to write the exams. The qualification exam for becoming a student members is Actuarial Common Entrance Test (ACET).
Actuarial Common Entrance Test (ACET) is the test you need to pass to get qualified for applying to a student membership in an actuarial body. This is the first step to become an actuary and the exam will be held twice in a year. This test includes questions from Mathematics, Statistics, Data Interpretation, English, and Logical Reasoning. Now the exam is conducting only in online mode.
Syllabus, details of examinations, process of application, fees and payments, centers of examinations, date of examinations are available at websites. For more details visit: http://actuariesindia.org
Where do I get the job?
The job opportunities for actuary are plenty. The scope of actuary is in different fields includes health and care insurance, life insurance, general insurance, pensions and other employee benefits, finance, investment, enterprise risk management (ERM), academics, regulatory, consultancy, etc.
Visit website of actuarial bodies for more details. Some of the actuarial bodies and their websites are:
- Institute of Actuaries of India (IAI)
- Institute and Faculty of Actuaries (IOA), UK
- Institute of Actuaries of Australia
- Society of Actuaries, US
- Casualty Actuarial Society, US
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