What is Actuarial Science?

Actuarial science is the discipline that applies mathematical and statistical methods to assess risk in the insurance and finance industries. Actuaries are professionals who are qualified in this field through examinations and experience.

Actuarial science includes a number of interrelating subjects, including probability and statistics, finance, and economics. Historically, actuarial science used deterministic models in the construction of tables and premiums.

Appointed Actuary System

The IRDA has introduced the system of Appointed Actuaries both for life insurance business and general insurance business carried on in India, and no insures can transact life insurance business in India without an appointed Actuary.  Perceiving a crucial role for the appointed Actuary, the Insurance Regulatory Authority, while defining the privileges and the obligations of the Appointed Actuary, has also laid down eligibility criteria in the regulations. The regulations require that each life insures shall have an Appointed Actuary as a full time employee. However, a relaxation has been made in case of non-life insurance companies, that they can appoint a consultant actuary. 

The growth of the insurance industry coupled with the entry of private sector in the last two years, has impacted the evolution of the system of Appointed Actuary.

Life insurance
General insurance
Health insurance
Reinsurance Companies
Pension funds
Consultants
Investments
Government
Academics
Risk Management

Life, General, Health Insurance and Reinsurance Companies

Traditionally Actuaries work with Life Insurance Companies, but their importance lies equally in General and Health Insurance Companies also.

The areas of their concern include:

The Appointed Actuary of a Company has the responsibility of demonstrating financial stability of the company to the State Regulatory Authorities at all times.

Pension Funds

Designing a Scheme of Benefits to the Members of the Pension Scheme Calculating the Past Service Cost and the Future Service Cost of Benefits

Certifying to the Regulator that the Fund Assets are sufficient to meet the liabilities and that the Assets are invested as per the Investment Pattern prescribed

Calculating and Certifying the Pension cost on Acquisitions and Merger of Companies.

Investments

Quantifying the risk and the amount of investment returns available in the market Projecting the market expected investment returns using scientific methods and judgment to project the inflation rates, returns on the various market segments - manufacturing, technology, pharma, etc. Choosing an Investment Strategy which strike an appropriate balance between risk and returns Analyzing and identifying the Opportunities for increasing the returns

Advising on the Investment Pattern to match the cash inflow and liability outgo for Insurance companies, pensions funds, banks, mutual funds, etc.

Consultants

Consultants can act as Appointed Actuaries for General Insurance companies They also provide actuarial advice and their opinion on actuarial matters for Insurance Companies, Pension Funds, Government, etc.

They provide investment advice to individuals that best suit their needs and family circumstances.  They calculate the reversionary interests of members of Trusts.

Government

Population projections

Managing State Pension Schemes

Identifying the regional differences based on geographical location, life style, income level, diseases prevalent, common occupation, etc.

Regulatory role for Insurance Companies, Reinsurance Companies, Pension Funds

Their role is increasing in designing Social Security Schemes, allocation of funds for development projects

Risk Management

Fast Evolving field in recent days, for any massive project with lot of uncertainties.

Identifying the various stages in the project while execution

At each stage, identifying all the risk which may result in not meeting the expected outcome or estimated time

Assigning a probability parameter to each of the identified risks

Finding out a suitable measure to avoid or transfer those risks

Processing the above-identified stages to various steps after allowing for the risk measures.

A person is eligible to be considered for admission as student member if he / she satisfies the following conditions:

           1. Mathematics or any any of its branches

          2. Statistics or any of its sub classifications such as Mathematical Statistics and Applied Statistics.

           3.  Econometrics

           4.  Computer Science

Subject in Science such as Physics or its branches The admission under these groups will, however, be subject to following conditions;

The total marks secured in the subjects coming under the classification of Mathematical subjects taken together in all the years of the degree course not less than 55%.

The content of Mathematical subjects content in all the years of the course taken together is not less than 50% of the total content. This is measured by the ratio which the maximum marks allotted to Mathematical subjects in all the years of the Course bears to the total maximum marks allotted to all subjects included in the examination of the entire course excluding languages.

      C) MBA/PGDBA or equivalent in disciplines having mathematical/statistical   content. Each case to be examined on case to case basis.

      D) Fully qualified members of following Professional/Educational specified as under;

  i. The Institute of Chartered Accountants of India (ICAI)
  ii. The Institute of Cost and Works Accountant of India (ICWAI)
  iii. The Insurance Institute of India (III) passing with subjects 81-Mathematical Basis of Insurance and 82-Statistics Full qualification would mean completion of all required examination leading to designation based on such full qualification such as ICA in case of Institute of Chartered Accountant of India. In case of Insurance Institute of India it would however mean AIII plus pass in subjects 81-Mathematical Basis of Life Insurance and/or 82-Statistics.

E) A student member of following actuarial bodies

i. Institute of Actuaries, UK
ii. Faculty of Actuaries, UK
iii. Institute of Actuaries of Australia

F) A student of following actuarial bodies provided atleast one subject has been passed from these bodies

i. Society of Actuaries, USA
ii. Casualty Actuarial Society, USA

3) The medium of Instruction in final stage of examination based on which admission is sought should be English.
Source & More information about visit :  Institute of Actuaries of India