WHAT IS COURSE ACTUARIAL SCIENCE

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Actuarial science is the discipline that applies mathematical and statistical methods to assess risk in insurance, finance, and other industries and professions. More generally, actuaries apply rigorous mathematics to model matters of uncertainty. Actuaries are professionals trained in this discipline. In many countries, actuaries must demonstrate their competence by passing a series of rigorous professional examinations.

Actuarial science includes a number of interrelated subjects, including mathematics, probability theory, statistics, finance, economics, and computer science. Historically, actuarial science used deterministic models in the construction of tables and premiums. Science has gone through revolutionary changes since the 1980s due to the proliferation of high-speed computers and the union of stochastic actuarial models with modern financial theory.

HISTORY

Historically, much of the foundation of actuarial theory predated modern financial theory. In the early twentieth century, actuaries were developing many techniques that can be found in modern financial theory, but for various historical reasons, these developments did not achieve much recognition. As a result, actuarial science developed along a different path, becoming more reliant on assumptions, as opposed to the arbitrage-free risk-neutral valuation concepts used in modern finance. The divergence is not related to the use of historical data and statistical projections of liability cash flows, but is instead caused by the manner in which traditional actuarial methods apply market data with those numbers.

WHAT CAN YOU DO WITH AN ACTUARIAL SCIENCE DEGREE?

The primary objective of people that major in actuarial science is to become an actuary.  An actuary is someone that typically works in an insurance company, and is a specialist in quantifying risk. Actuaries use mathematical and statistical concepts in order to determine the likelihood of certain events occurring in the future (and when they’ll occur), as well as the expected financial impact of those events. Using this information, the actuary can calculate a reasonable amount of money that should be put aside now in order to ensure that enough money will be available later to pay for the event if and when it occurs in the future.

Actuarial Science Eligibility Criteria

  • Min Qualification Required: 10+2 (with Mathematics)
  • Min. Marks Required (Aggregate): 50% to 60% varies according to the programme

Actuarial Science

Actuarial Science Selection and Structure:

BBA and ACET:

  • Candidates who seek undergraduate courses in Actuarial Science must have studied Mathematics till class 12.
  • You can apply for the ACET exam in order to pursue the Actuarial Science Course offered by Institute of Actuaries of India (IAI) after passing class 12.
  • However, for other bachelor degree courses, admission is done on the basis of merit in class 12 exams and entrance exams conducted by respective universities.

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MBA and PGDM in Actuarial Science:

Candidates can apply for MBA and PGDM courses in Actuarial Science after passing graduation with at least 60% aggregate marks.

Admissions are done on the basis of management entrance exams (such as CAT, CMAT, MAT) as well as admission personal assessment rounds (Group Discussions, WAT and Personal Interviews).

Myths about Actuarial Science

Actuarial science is all about mathematics and statistics

Mathematics and statistics are tools through which we apply the actuarial principles and hence these subjects’ area foundation of the profession. But along with this, we also have other elements like risk management, economic principles, modelling, communication.

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Actuaries are the highest paid professionals

If there is one myth that needs to be busted, it has to be this. I feel the package in our profession is thoroughly overrated. A lot of people are running their businesses (read coaching centers) on this ground. There are a lot of factors that decide one’s package in this domain; some of which are – the number of papers cleared, the domain you belong to (life insurance, pension, general insurance etc.), the number and quality of work experience that you have, your area of expertise, whether you work for a domestic company or an MNC.

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Actuaries only work for insurance companies

While most of us work for insurance companies, it does not mean we do not work in other domains. Actuaries do exist in other fields’ like- banking, strategy, business planning, risk, finance and even in other unconventional fields like L&D and training.

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Is an actuarial career good for you?

The decision to become an actuary should be taken very seriously.  Becoming one is a much longer-term commitment than most careers due to the actuarial exams. But there are many aspects of an actuarial career that you may love and will make it worth the commitment for you. 

Here are some of them:

  • You get to use math, probability, and statistics all day long (every day).
  • The salary of an actuary is pretty high, especially as you gain more experience (salary details here).
  • The job is fairly low stress.
  • It’s challenging work that will keep you thinking and problem solving daily.
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The second disadvantage of becoming an actuary is the entry-level job market.  It’s fairly saturated right now (in late 2018) which makes it difficult for some actuarial science graduates to get a job as an actuary even if they’ve passed 2-3 exams.

This doesn’t mean that it’s impossible to get a job or that you shouldn’t pursue it if it interests you, but just be prepared to work in a related position for a few years before you move into an actuarial position.  Also, you should develop a back-up plan in case the actuarial route doesn’t end up working out for you.

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By: Debarati Pal

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