What is Actuarial Science:
Actuary is the Science of Predicting, Assessing & Controlling Risk.
Actuary Science combines deep knowledge of Mathematics, Statistics, Finance & Economy to help companies primarily in the insurance & banking sectors to manage their and their client’s risk better. However, Actuaries are now getting more demand from companies in other sectors as well.
In India, IAI – Institute of Actuaries of India governs the framework for examination and selection of Actuaries
Is this lucrative?
Actuaries are among the top-most paid professions abroad and in India with a good work-life balance (as compared to other consultants & investment bankers). Here is a compilation of what the top job-search engines say about Actuaries:
- Glassdoor: Actuaries are among the top 25 professionals with the highest salaries in America.
- Monster: One of lowest stress jobs with a well-balanced work-life equation. Usually Actuaries get over $100k salary (in USA) and the top consultants make about $300k. This is very impressive when you compare that the average pay for MS from the Top Ivy league institutes in USA is in the range of $80-$120k.
- CareerCast: Actuaries rank #11 among 200 jobs with an impressive individual ranking of #15 on work environment, #67 on stress (that’s low stress to be precise), and #22 on projected growth
- In India, Actuary graduates have a salary of 15 to 20 lakhs whereas that of experienced actuaries is much more. Even the Actuarial students can make some money as they start clearing their basic exams. More on this later in the article
Who is it for and what do Actuaries do:
Actuaries analyze different types of data to calculate and manage risk. They are the ones who help insurance companies and banks to determine the premiums and other rates. They deeply analyze facts, figures and trends to come up with sound policies.
The typical work responsibilities of Actuaries include the following:
- Designing financial policies and monitoring if there are enough funds in the company.
- Determining the rate of interest to be given to customers for insurance policies.
- Keeping a check on insurance risks to minimize losses.
- Predicting the occurrence of various illnesses such as heart disease, cancer, etc., among different groups, to incorporate these risks when designing insurance policies.
- Assessing risk for the financial planning of the company.
Who can become an Actuary – Eligibility:
The only criterion required to be eligible to take the first step towards becoming an Actuary is to pass the 12th Standard / HSC exam. However you can always apply even if you are a graduate or a postgraduate, are a CA or Financial Analyst, etc. The basic eligibility is just 12th Standard.
How to become an Actuary?
With great money comes great hard-work. Let us understand one thing straight – it is not easy to become an Actuary. There are a total of 15 exams which students need to clear apart from 3 years of Practical Work Experience in order to become an Actuary.
Let us take a step-by-step approach to understand the process to become an Actuary:
Step 1: Become eligible. One just need to clear the HSC / 12th Grade examinations to be able to be eligible (either Science or Commerce). After 12th , while there is no specific eligibility requirement for graduation, but B.Sc in Mathematics or Statistics or Actuarial Science is recommended since they allow one to develop a strong base in mathematics, statistics, probability concepts, analytical and problem-solving skills.
Did you know the Gujarat University offers an Integrated 5 years M.Sc. program for Actuary Science – Read more about it here
Step 2: Appear for ACET (Actuarial Common Entrance Test)
ACET is a 3 hour, 100 marks online exam which has 70 MCQs with one correct answer for each question (and no negative marking). ACET is conducted in 24 centres in India (Ahmedabad is one of them) and is conducted 3 times in a year. The passing percentage in ACET is 50%
Allocation of Marks in ACET:
- Mathematics – 30 marks
- Statistics – 30 marks
- Data Interpretation – 15 marks
- English – 15 marks
- Logical Reasoning – 10 marks
Step 3: Clear Actuarial Science Stages
Since Actuarial Science is a professional course – there are per say no regular colleges or mandatory classes that need to be attended. One only needs to clear the different examinations/stages. These are written as well as practical exams conducted by the IAI.
There are a total of 15 papers divided into 4 stages:
|Stage No.||Stage Name||No. of exams in this stage||Milestone / Salary|
|Stage 1||Core Technical (CT)||9 exams|
|Clearing 5 stages are enough to get a basic job of 4-5 Lakhs per Year|
|Stage 2||Core Application (CA)||3 exams (all mandatory)||Associate of IAI|
|Stage 3||Specialist Technical (ST)||2 exams|
(2 out of 8)
|Salary of about 15-20 Lakhs per year|
|Stage 4||Specialist Application (SA)||1 exam|
(1 out of 6)
|+ 3 years of experience – Fellow|
50-60 Lakhs per year for a Fellow with 10+ years of experience
Frequently Asked Questions for Actuarial Science
Should I take Science or Commerce in my 11th Standard to become an Actuary?
As discussed earlier Actuarial Science is a field about numbers and statistics. Thus, it is imperative to be very strong in Mathematics and Statistics to make a successful career in it. Commerce with Mathematics or Science with Mathematics (PCM) can be opted in Class 11th and 12th. However, we recommend Commerce with Mathematics for 2 reasons:
- Economics is a part of the Commerce Curriculum and is also important for Actuary Science.
- Other subjects of Commerce (eg. Business Studies) are lighter than Physics & Chemistry of Science stream. So if the student is very clear that he/she wants to become an Actuary, he/she can start preparing for ACET right in 11-12th
Is Actuary Science for me:
- Data, numbers & analysis excites you
- Interest & strong hold on subjects like statistics and advanced mathematics
- High concentration and long-duration work doesn’t bog you down.
What if I am not able to clear all the 15 exams of Actuary?
While the salary becomes much better after completing all the exams, even a student and an associate has enough demand in the market at different levels. Right from Rs. 4-5 Lakhs per year salary for a fresh student (who has cleared about 5 exams) to 15-20 lakhs after clearing 14 exams, there are many options
Is clearing a B.Sc or M.Sc in Actuarial Science the same as becoming an Actuary?
No. In order to become an Actuary one needs to clear the 15 exams conducted by IAI – Institute of Actuaries of India. The B.Sc and M.Sc courses simply help one get a degree and acts as a fall-back option in case one is not able to clear all the exams.
Is it all positive with Actuary?
Actuary has its own set of mixed opinions and while largely it is very positive there are some views which says it does not always live upto the hype.
I like numbers & maths. Should I do MBA (Finance) or Actuarial Science:
Actuarial Science is a far more niche topic as compared to MBA (Finance). While a top actuary and an MBA (Finance) from a Top-Tier institute can make roughly the same money, Actuaries are more specialized and therefore difficult to replace J
However, if you like to keep your options open then go for MBA (Finance) and you can also appear for Actuary tests in parallel.