Actuaries: The emerging experts

Actuaries are professionals who evaluate the likelihood of future events, design creative ways of reducing the likelihood of the happening of undesirable events and decreasing the severity of such events if the same do occur.

An actuary’s work is, therefore, intellectually challenging. Actuaries are key players in the management team of companies which employ them. As expert risk managers, actuaries fill a significant void in our society.

Risk management which includes risk identification, risk evaluation, and risk minimisation is an area of active research for inventing new ways to maximise financial results for the stakeholders without exposing them to excessive, avoidable risk. Actuaries develop techniques through the use of statistical, mathematical and economic models to deal with a variety of situations the organisations face.

Basically, actuaries contribute a lot in financial decisions with respect to transactions that involve deferment and uncertainty. Thus, the scope for the profession in the country is unlimited in view of the buoyant economy and the chances of many large infrastructural projects, involving long-term finance, coming up.

Course clues

The basic academic background required to become an actuary is graduation with Statistics /Mathematics/ B.Com(Hons)/ Eco(Hons) etc. Students with this background should, in fact, opt for a career in actuarial science as their preferred option in view of the fact that the profession has been consistently rated as one of the top five jobs in the United States, according to Jobs-related Almanac.

There is at present a yawning gap between the demand and supply of the actuarial professionals.

Training talk

To cater to this ever-growing demand, Amity University at Noida and the Narsimonji Institute of Management, a Deemed University at Mumbai, have launched the M.Sc ( Actuarial Science) and MBA (Actuarial Science) courses, respectively. Some more educational institutions are trying to enter this still virgin field.

These programmes give students a holistic view of the discipline, better conceptual clarity because of teaching by experts and a classroom environment as compared to those students directly writing papers of the ASI (Actuarial Society of India) through self-study.

Placement prospects

As regards the potential employers, life insurance companies are the traditional employers of actuaries in India. But globally, actuaries are also in great demand in the area of non-life insurance, employee-benefits, health insurance, asset-management reinsurance, large insurance broking houses and consulting companies.

In India, the profession till recently was rather unknown. With the opening up of the insurance sector, a lot of interest has been generated among the students with the right background. As a result, a good number of students have enrolled themselves as student members of the Actuarial Society of India (ASI), Mumbai. However, for the systematic development of the actuarial skills i.e first eight subjects of the CT series, it is not only desirable but necessary that both industry and the ASI encourage such programmes. The ASI should evolve a criteria to benchmark the different programmes on certain parameters and give exemptions in certain subjects to students who achieve those benchmarks.

Similarly, industry should provide for opportunities of summer-training and final placements. Such initiatives by industry and the ASI will go a long way in the accelerated growth of the profession in the country. It may not be out of place to mention that such practices are prevalent in the UK, Australia and many other countries. Such initiatives by the ASI would facilitate creation of proper infrastructure and expertise at various centers for the profession to grow. — TNS 

A career worth risking
Mary Ellen Slayter

Mahoney's job is all about risk. She's not a race car driver; she's an actuary, an expert in helping organisations assess the probability of certain events and ensuring that clients are prepared for the costs if they do.

She specialises in pension plans, and as a consultant, she helps companies, non-profit groups and agencies make sure their investment strategies are sound.

It's the sort of job that's always changing, says Mahoney, 40. “As long as you focus on your clients' issues and problems, the job is always interesting.”

Actuaries basically work in the insurance industry. The rest work in a variety of industries, such as healthcare and finance, and in agencies, including those that manage social security and medicare.

This is not a job for the math-phobic. A strong background in mathematics is essential, but that's just the beginning. The series of exams that an actuary must pass to gain full professional status also covers economics, finance and law. Passing all the tests can take several years. It is easy to get sidetracked. “You need to be very self-motivated to get through them while you're also working,” Mahoney says.

But if you can survive those tests, there is a payoff: the median annual salary for an actuary is handsome.

And you thought there was no use for those calculus classes in the real world. 

LA Times- Washington Post