Actuarial Science

Actuarial Science refers to the mathematical and statistical discipline that is applied to assess risk and uncertainties in insurance, finance, banking and other similar industries. An Actuary is a professional who has qualified the necessary assessments in this discipline from a recognized university or institute.

Actuaries help companies quantify financial impact of each and every risk of business which helps company remain solvent. Their predictions are based on complex mathematical and statistical models. They possess knowledge of Insurance, finance, statistics, mathematics, economics and accounts.

History of Actuarial Profession

History of application of Actuarial concept dates back to 1762 when Society for Equitable Assurances on Lives and Survivorships as a mutual company was formed in London. Examination system was first started 2 years after the Institute of Actuaries (UK) was established in 1848. Later on many actuarial bodies were established to conduct exams and develop the profession and its regulations continually. Today we have an actuarial body in more or less every major country. Institute of Actuaries of India, formally established in year 2006, is the governing body of Actuarial Profession in India. Prior to Institute of Actuaries of India’s formation, Actuarial Society of India was conducting Actuarial exams since 1944.

Who Can become an Actuary?

To become an Actuary one has to pass a series of examinations. Candidate must have amazing interest in mathematics and statistics to be able to become an Actuary.

Minimum Qualification recommended is 10+2 to start writing actuarial exams.

Any candidate with the required qualification, skills and interest can become an Actuary.

Where do Actuaries Work?

Actuaries are globally found in major risk prone businesses like

  • Insurance industry (either property and casualty or life and health)
  • Financial institutions (Banks, Funds etc)
  • Consulting firms
  • Government agencies
  • Consumer Industry
  • Research firms
  • Risk Advisory companies  etc.


Actuary as a Profession

For Qualified Actuary


Work Life Balance
Excellent
Pay Scale
Excellent
Working Conditions
Excellent

For Actuary Aspirants (Students)


Difficulty level to become an actuary
Highly Difficult
Work Life Balance
Average
Pay Scale
Average
Working Conditions
Above Average
Scope of Growth In Career
Excellent

Studying Actuarial Science


To study Actuarial Science one can opt for a graduate or a post graduate program in Actuarial Science with some recognised university or write exams directly from Institute of Actuaries of their respective countries. In India, Exams passed from Institute of Actuaries of India or Institute and Faculty of Actuaries, UK, is recognised by employers. Some universities in India also provide Actuarial education in various cities at graduate or post graduate level.

Actuaries have signing authority on various reports as per rules and regulations of the Government of India.  To attain the signing authority one has to become the fellow member of the Institute of Actuaries of India for Indian reports. Only getting a degree from university does not qualify a candidate to authorise (sign) reports.

Institute of Actuaries of India and Institute and Faculty of Actuaries, UK have mutual recognition agreement. This mutual recognition agreement allows a candidate to claim exemption from one institute if the candidate has already passed the exam in another institute. Candidate can have membership of any number of actuarial societies of any number of countries at the same time. In India, it is popular among students to have membership of both Indian and UK institutes.

To become a fellow one has to pass a series of 13 exams as described below. Some universities abroad are recognised by institute and Faculty of Actuaries, UK and based on the exams appeared in the recognised university, as many as 8 exams are exempted and the candidate only needs to pass the rest of the exams to achieve the fellowship of the institute. List of colleges with exemption agreement with Institute and Faculty of Actuaries is available on the website actuaries.org.uk.

The Candidate aspiring to become an Actuary should have the following skills by default or must be willing to develop these skills before entering the profession

  • Interest in Mathematics and Statistics
  • Excellent communication skills – spoken and written.
  • Strong Logical Reasoning
  • Focus and commitment
Membership and Exam Process

First step is to get the Student Membership of one or both of these institutes

The Institute of Actuaries of India (IAI)

You should clear Actuarial Common Entrance Test (ACET), after which you are eligible to sit for next levels. ACET is an objective type questions test of 100 marks which contains following topics,

  • Mathematics
  • Statistics
  • English
  • Data Interpretation
  • Logical Reasoning

Institute and Faculty of Actuaries (IFoA), UK 

 You should have scored 80% or above in mathematics and/or statistics subject at 10+2 level or at least 55% aggregate average of all semesters of graduation with mathematics as a major subject or a professional qualification etc.

If you do not qualify for any of these, then other way of entering the profession is by passing the Subject CS1 or CM1 which you can write as a non-member. You become eligible for membership once you clear one the said subject.

Once you become a member

 After taking membership you can appear for the rest 12 or 13 exams. If you are member of Indian Institute then you must clear all 13 exams. If you have applied for UK Institute membership based on your qualifications then also you need to appear for all 13 exams but if you have gained membership by clearing CM1 or CS1 then you need to clear remaining 12 exams.

Exams can usually be appeared in any order without any restrictions but certain subjects assume knowledge of other subjects and hence judgement should be applied or expert opinion should be taken before deciding on the order of exams.

Outlined below is the curriculum of Actuarial Profession applicable from 2019!

Actuarial Curriculum is divided into 4 groups. Details are given below.

Core Principles Group
You are required to pass all 7 papers at this stage and these are as follows:

Subject CodeSubject Detail
CM1Actuarial Mathematics
CM2Loss Reserving and Financial Engineering
CS1Actuarial Statistics
CS2Risk Modelling and Survival Analysis
CB1Business Finance
CB2Business Economics
CB3Business Management

Core Practice Group
You are required to pass all 3 papers at this stage and these are as follows:
(Once you pass this group along with Core Principles group, you become an Associate Actuary)

Subject CodeSubject Detail
CP1Actuarial Practice
CP2Modelling Practice
CP3Communications Practice


Specialist Principles Group
After Core Practices, comes the Specialist Principles stage. Here, You choose what area of work you’d want to specialize in.You are required to select any two papers out of available options:

Subject CodeSubject Detail
SP1Health and Care Principles
SP2Life Insurance Principles
SP4Pensions and Other Benefits Specialist Principles
SP5Investment and Finance Principles
SP7General Insurance Reserving and Capital Modelling Principles
SP6Financial Derivatives Principles
SP8General Insurance Pricing Principles
SP9Enterprise Risk Management Specialist Principles

Specialist Advance Group
This is the last stage before you get signing authority and tag of “Fellow Actuary” You are required to pass any one paper out of the available option.

Subject CodeSubject Detail
SA1Health and Care Advanced
SA2Life Insurance
SA3General Insurance
SA4Pension and Other Employee Benefits
SA7Investment and Finance Advanced

Important points to note!
  • Passing Criteria is not disclosed by the any of the two institutes in advance.
  • IAI results only state pass or fail. If result is not in favor, candidate is given a grade based on his/her marks from FA to FD.
  • IFoA declares passing marks and marks scored together with results. While attempting the exam it is not known in advance how much marks are required to pass the exam. Passing marks vary based on overall performance of the students across the globe.

Difference between IAI and IFoA,UK.

Sr. No. IAIIFoA
1Membership criteria- Pass ACET
- 85+ in 10+2 in Mathematics
- Pass CM1 or CS1 as Non-Member
2Entrance feesACET- INR 3000CT1 or CT3 Non Member – GBP 165 if you annual income is less than GBP 7230 (i.e. less than 600,000).
Otherwise, GBP 265
3Membership feesINR 3000GBP 241 if you annual income is less than GBP 7230 (i.e. less than 600,000).
Otherwise, GBP 371.
4Membership Renewal feesINR 1500GBP 73 if you annual income is less than GBP 7140 (i.e. less than 600,000).
Otherwise, GBP 241.
5SyllabusExactly same as IFoA
15 Exams.
6Recognition in IndiaEqualEqual
7Recognition outside IndiaMay be lessMay be more
8Difficulty levelDifficult as compared to IFoA (as per students review)Slightly easier as compared to IAI (as per students review)
9Exam ScheduleMarch and SeptemberApril and September
10No. of exams allowed per attemptMax. 3 subject per attemptNo Limit
11ExemptionEvery exam passed from IFoA is exempted in IAIEvery exam passed from IAI is exempted in IFoA

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