Science or not? All you need to know about Actuarial Science

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Science or not? All you need to know about Actuarial Science

Business Management has boomed unlike no other career option in the recent years. With globalization integrating world economies, the need for qualified business and management professionals has been on a tremendous rise. In the recent years, the number of B-Schools in India have shot up with increasing number of students aspiring for a coveted MBA or CA degree that offered attractive entry-level pay packages to students with these degrees. In the past 2-3 years the demand for graduated MBA students has gone down by 40%. This has resulted in many students give a second thought to pursue an MBA specially those who want to go abroad. Given the course fees, is the future demand in this field likely to improve in the years to come? Or will they be running from pillar to post, with the MBA degrees in hand searching for a job? What alternative career option lies for those from a management background?

Well, this blog is going to answer all these questions and tell you about an off-beat lucrative career which is gaining a lot of popularity in India- Masters in Actuarial Science (M.Sc. Actuarial Science). So what exactly is it? Masters in Actuarial science involves application of mathematical and statistical methods to assess risk in the insurance and finance industries. It includes a number of interrelated subjects, including probability and statistics, finance, and economics. Well, this ensures the subjects you studied for your undergraduate degree will see practical application here.

The next question that will pop in your head is what exactly is the work of an actuary? To answer that, Actuaries play an instrumental role in the conduct of the insurance business, ranging from product development, product pricing, underwriting, and claims reserving to asset liability management. He or she designs products (the benefits to be paid) for life or general insurance or pension plans; calculates the premium to be charged from policyholders for a product and what reserves a company should set aside for policies it has already sold; decides on investment strategies; analyses the performance of the company in various areas and fixes the bonus to be paid to policyholders. This would involve a detailed analysis of data related to rates of mortality, sickness, injury, retirement and property loss from theft, accident, fire or any other hazard. On the basis of data thus collected, he/she analyses claims from corporation or company. He/she also creates new and attractive policies to further the organisation’s business. Thus, an actuary is the backbone of the insurance company.

For a M.Sc. Actuarial Science degree, students are required to have cleared the Actuarial Common Entrance Test (ACET) at a 10+2 level, graduate or post-graduate in Mathematics, Statistics, Economics, Computer Science, Engineering, MBA (Finance) and other similar qualifications. This will make them student members of the Institute of Actuaries in India (ICAI). Students are expected to clear 15 papers from ICAI along with 3 years of practical experience to be a full-fledged actuary. Let me point out that the Actuarial Science degrees in the U.S.A and U.K. are different, while Indian students generally prefer to go to the U.K due to the Mutual Recognition Agreement. After clearing some easy papers from ICAI before switching over to Institute and Faculty of Actuaries, UK. (IOFA). Students wishing to become members from IOFA may please note the cost of education is a notch higher than with ICAI, but however, the chances for becoming an actuary are higher from IOFA given that the pass percentage from ICAI is barely 2-5% depending on paper difficulty level. The number of papers you clear could vary, but it is generally suggested to clear 9 papers or CT level in India before going abroad.

Here’s a quick list of leading universities in U.K offering M.Sc. Actuarial Science degrees:

  • University of Manchester
  • London School of Economics
  • University of Kent
  • University of Leicester
  • Cass Business School

And several more.

So if you think you are good with analytics, have love for numbers and fairly well at lateral thinking along with a deep passion for insurance and risk management, this course is made for you. Students from this background are in high demand and command lucrative starting salaries across the industry. The leading employers of actuarial talent are life insurance companies, reinsurers, actuarial consulting firms and general insurance companies are the leading employers. They are also employed by Property consultants, brokers and agents, and a few KPO/ BPOs, which are providing actuarial services to their clients abroad.
And yes, Avanse offers highly customised Education loans to all those future actuaries tailored to meet their educational needs.

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