As an expert, an actuary uses mathematical and statistical techniques to assess risks and their financial consequences. Since insurance, finance, and other closely related industries are highly complex, actuaries play a role in helping companies evaluate various risks associated with their activities. To become an actuary, individuals must complete an educational program by the IAI that combines knowledge of mathematics and economics with practical experience.
What does an actuary do?
Actuaries are responsible for analyzing data and predicting the likelihood of certain events occurring in the future. They do this by assessing the probability of making a particular type of claim or the likelihood of an investment portfolio performing well over a certain period. They use their mathematics, statistics, and economics knowledge to develop models that can accurately predict the probability of events and advise businesses and clients on best managing their financial risks.
In addition, actuaries use their expertise to assess the potential financial impact of events. They use this information to develop strategies to minimize the financial losses associated with those events. Actuaries advise businesses and clients on designing and pricing insurance policies and pension plans. Thus, actuaries-
- Analyze statistical data, such as mortality, accident, sickness, disability, and retirement rates
- Develop probability tables to forecast risk and liability for insurance companies
- Calculate premiums and determine the cost of providing insurance
- Analyze financial data and predict the company’s future financial obligations
- Design, test, and implement programs to control risk and maximize profits
- Advise clients on a variety of financial matters, such as investments, pension plans, and insurance policies
- Prepare reports and present findings to management and clients
The Institute of Actuaries of India (IAI)
The IAI is the only professional body of Actuaries in India. It was established in September 1944. The Actuaries Act, 2006 (35 of 2006) established the IAI as a statutory body.
Moreover, it is a full member of the International Actuarial Association (IAA) and the Asia-Pacific Actuarial Conference (APAC). The IAI examines, educates, and trains actuaries in India. The IAI guides and supports its members in their professional activities.
The Actuarial Common Entrance Test (ACET)
IAI conducts the Actuarial Common Entrance Test (ACET) for admission to the actuarial course. It is a three-hour online exam conducted in June and December every year. The exam tests the candidate’s mathematics, statistics, economics, and finance knowledge and skills through multiple-choice questions. It is conducted in English and is open to students from all backgrounds. The exam assesses the candidate’s ability to practically apply their knowledge of the subject. Candidates who pass the entrance exam can enroll in the actuarial course offered by the IAI.
Eligibility Criteria for ACET
A candidate who has passed 10+2 or any other higher courses/examinations or any candidate studying for-
- Diploma
- Finance, or any other stream, but you have skills in Numeracy.
- Mathematical Sciences: Maths, Statistics, Econometrics, or any other.
- Engineering.
- Management.
- Chartered Accountant, Cost Accountant, or a Company Secretary.
Subjects assessed in ACET
- Mathematics
- Statistics
- English
- Data Interpretation
- Logical Reasoning
Enrolled candidates can begin the actuarial course after passing the entrance exam. The final actuarial exams are also in May and November, similar to the entrance exams.
Actuarial Examination
1. Core Principles (Stage 1)
- Actuarial Statistics
- Risk Modeling And Survival Analysis
- Business Finance
- Actuarial Mathematics
- Business Economics
- Financial Engineering And Loss Reserving
- Business Management
2. Core Practices (Stage 2)
- Actuarial Practice
- Modeling Practice
- Communications Practice
3. Specialist Principles (Stage 3)
- Health And Care
- Life Insurance
- Pension And Other Benefits
- Investment And Finance
- Financial Derivatives
- General Insurance Reserving And Capital Modelling
- General Insurance – Pricing
4. Specialist Advanced (Stage 4)
- Health And Care
- Life Insurance
- General Insurance
- Pension And Other Benefits
- Investment And Finance
Tacitly, membership with IAI is granted upon passing the actuarial exams. Aspiring Actuaries should keep themselves informed about the latest developments related to their field through various industry journals and magazines that are published regularly. Moreover, they should take up project-based learning opportunities with any relevant organization that will provide them with hands-on experience while working alongside experienced professionals in the industry.
