Careers in Actuary
Overview:
Actuarial
science deals with risk management. A qualified professional in
Actuarial science is called an Actuary. An actuary is a business
professional who analyzes the financial consequences of risk. One of the
main functions of actuaries is to help businesses assess the risk of
certain events occurring and to formulate policies that minimize the
cost of that risk. For this reason, actuaries are essential to financial
and insurance industry.
Actuaries
assemble and analyze data to estimate the probability and likely cost
of the occurrence of an event such as death, sickness, injury,
disability, or loss of property. Actuaries also address financial
questions, including those involving the level of pension contributions
required to produce a certain retirement income and the way in which a
company should invest resources to maximize its return on investments in
light of potential risk. Using their broad knowledge of statistics,
finance, and business, actuaries help design insurance policies, pension
plans, and other financial strategies in a manner which will help
ensure that the plans are maintained on a sound financial basis.
Actuaries basically
- Design and evaluate insurance/financial products
- Periodically evaluate assets vs. liabilities
- Prepare investment strategy
- Design
and evaluate employment related benefits for their clients. The
benefits include pension, provident fund, gratuity, medical etc
Professional Bodies for Actuarial Science:
In Pakistan, a Fellow of
Institute of Actuaries, UK ("FIA"), or a Fellow of the US Society of
Actuaries ("FSA") is regarded as a fully qualified actuary. Time taken
to complete fellowship depends on individual ability and hard work. It
ranges from 4 years to 10 years or more. The general average for the UK
Institute and the US Society is around 6 to 7 years. The UK Institute
and the US SoA conduct their exams in Karachi. So without leaving
Pakistan, a person can complete all the exam requirements for the
internationally respected FIA or FSA status.
I. Society of Actuaries (SOA), USA :
The Society of Actuaries is a professional
organisation for actuaries. The Society’s members are mainly involved
in the life, health, and pension areas of the actuarial profession. The
three designations offered by the Society are “Associate of Society of
Actuaries” (ASA), “Fellow of the Society of Actuaries” (FSA), and
"Chartered Enterprise Risk Analyst" (CERA), which was introduced in
2007.
Requirements for membership for the SOA include the actuarial exams, a
comprehensive series of competitive exams. Topics covered in the exams
include mathematics, finance, insurance, economics, interest theory,
life models, and actuarial science. Only Associates and Fellows are
considered members of the Society.
- Associateship
Has an understanding of the
basic mathematics underlying actuarial science and of the
application of fundamental mathematical concepts to technical
actuarial problems
- Fellowship
Has knowledge of the
business environments within which financial decisions concerning
pensions, life insurance, health insurance, and investments are
made including the application of mathematical concepts and other
techniques to the various areas of actuarial practice. The Fellow
further demonstrates an in-depth knowledge of the application of
appropriate techniques to a specific area of actuarial practice.
- Chartered Enterprise Risk Analyst
Has demonstrates a
comprehensive knowledge of enterprise risk management. The CERA
has been trained to apply both qualitative and quantitative
insights to risk management and is qualified for such positions as risk
analyst, risk manager and chief risk officer.
Society of Actuaries USA held examination twice each year in the
Spring and Fall. Exam Includes Exam P (probability), Exam FM (Financial
Mathematics), Exam A (Actuarial Model), Exam C (Construction and
evaluation of actuarial model). Exams 1/P, 2/FM, and 4/C are
administered by SOA. The Society of Actuaries offers required and
elective self-study courses. After successful completion of Exams 1/P
through 7, and attendance at the CAS Course on Professionalism, satisfy
the membership requirements as an Associate. After achieving Associate
ship status and usually after gaining a few years of work experience,
most actuaries complete the Fellowship exams. SOA candidates choose one
of five specialty tracks: group and health benefits, individual life
and annuity, pensions, investments, or finance. Several required and
elective courses make up each track. Detailed information can be
obtained by logging on to
II. Institute of Actuaries (IOA), UK:
The Institute of
Actuaries is the professional bodies representing actuaries. An
actuarial qualification from the Institute of Actuaries consists of a
combination of the completion of various examinations and courses. The
examinations are split into four sections: Core Technical (CT), Core
Applications (CA), Specialist Technical (ST), and Specialist
Applications (SA). Following are the courses offered in each stage;
Core Technical – CT Stage
- CT-1: Financial Mathematics
- CT-2: Finance and Financial Reporting
- CT-3: Probability and Mathematical Statistics
- CT-4: Models
- CT-5: Contingencies
- CT-6: Statistical Methods
- CT-7: Economics
- CT-8: Financial Economics
- CT-9: Business Awareness Module
- Each of CT1–CT8 is examined by one paper of three hours duration.
Core Applications - CA Stage
- Core Applications Concepts
- Modelling
- Communications
Specialist Technical Stage
- Alternative Specialist Technical
- Health and Care Specialist Technical
- Life Insurance Specialist Technical
- General Insurance Specialist Technical
- Pensions and other Benefits Specialist Technical
- Finance and Investment Specialist Technical A
- Finance and Investment Specialist Technical B
Specialist Applications Stage
- Research Dissertation Specialist Applications
- Health and Care Specialist Applications
- Life Insurance Specialist Applications
- General Insurance Specialist Applications
- Pensions and other Benefits Specialist Applications
- Finance Specialist Applications
- Investment Specialist Applications
In addition to examinations
and courses, it is required that the candidate both complete at least
three years work as an actuary and be at least 23 years of age, for one
to qualify as a “Fellow of the Institute of Actuaries” (FIA).
Institute of Actuaries, UK conducts examinations twice a year, in April
and September. Candidate can take as many exams as he/she like at each
sitting. Detailed information can be get by logging on to
Membership details for IOA:
- Student actuaries are members of the Institute who are taking exams;
- Associates are members who
have completed both the CT and CA subjects and have completed one
year's worth of relevant work-based skills experience;
- Affiliates are members of
the Institute of Actuaries who are kept up-to-date with the
developments within the Actuarial Profession through publications
and affiliates are able to participate in meetings, research and
conferences;
Fellows are full members of the Institute who have met the training
demands by both completing all the examinations and meeting the work
experience requirements. Fellows have the right to call themselves
'Actuaries'.
Study Route:
Educational Institutions:
- University of Karachi, Department of Statistic, Karachi
- BS in Actuarial Science and Risk Management - 4 years
- University of the Punjab, Institute of Statistic, Centre of Actuarial Science, Lahore
- MSc in Actuarial Science - 2 years
State Life and NJI Actuarial Trainee Programme:
NJI and State life Insurance
Corporation offers career opportunities to Intermediate and A Level
students to qualify as fellow of the Society of Actuaries, USA and
Institutes of Actuaries, UK. They train candidate for two years and
during the training period they provide monthly stipend to student
After completion of the training programme student are offered
permanent job in the organisation . On passing the exam of SOA / IOA
the candidate offer career advancement and salary escalation options by
the company. Usually the insurance companies require application from
the student who are not more than 20 years and either completed
intermediate examination with minimum 75% and at least 80% mark in
mathematics or done O level with at least five subjects and minimum two
passes at A-level, one of the A-Level passes must be mathematics with
at least A grades and other Passes must be at least C grades.
Working Condition:
Actuaries have desk jobs, and
their offices usually are comfortable and pleasant. Some
actuaries—particularly consulting actuaries—may travel to meet with
clients. Consulting actuaries also may experience more erratic
employment and be expected to work more than 40 hours per week.
Potential Employer:
- Insurance Companies
- Investment / Commercial Banks
- Leasing companies
- State Bank of Pakistan
- Consulting Firm
- Government Organisation
- Academic Institution
Career Prospects:
- Actuaries
- Executive Officers
- Financial Analyst / Advisor
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