With risk-based capital regime on the anvil, it is estimated that there will be a 30-40 percent increase in number of actuarial positions required by insurers.
For the 300 plus insurance products sold in the country, there are only 375 fully qualified actuaries in the country. With a tough criteria to clear 15 papers of actuarial science, these individuals are responsible for the most crucial aspect of insurance, which is product pricing.
Every insurance company is required to have a full-time appointed actuary who is responsible for assessing the risks associated with writing a business. He/she then ascertains whether this risk can be taken on the insurer’s books and what rate of premium should be charged.
So what the end customer pays and whether or not an individual is to be given insurance is decided by the actuary depending on the risk-taking ability of the company. Every time a price revision is done in a product, it is done on the sole-advice of the actuarial team.
However, since there is a dearth of fully-qualified actuaries, insurers also appoint individuals who have passed 10 papers as an associate in the actuarial department.
The Institute of Actuaries of India currently has 8700 members but only 375 are fully qualified while 160 are associate.
The drop-out rates are high, as much as 35-40 percent, and reason being the level of difficulty of the examination. Officials associated with the testing process said that there are unable to simplify the process, because it is a technical subject.
However, what is still not widely known is that actuaries are paid excellent salaries since they form the base structure of insurers’ core activities. Further, there are good job opportunities available not just in the insurance industry as well as allied companies in the banking and financial services sector.
Over and above this, the implementation of solvency or the minimum capital requirement by insurance regulations is also the job of an actuary. With risk-based capital regime on the anvil, it is estimated that there will be a 30-40 percent increase in number of actuarial positions required by insurers.There are some insurers who offer jobs after a candidate clears two to three papers of the professional examination. But, they are offered a permanent position only after passing the other papers. Quantitative methods, mathematics and statistics are essential part of the examination.
On one hand, while there is a trend of students slowly moving away from traditional engineering and medical science courses, fields like actuarial sciences present a positive opportunity for students who want to do a deep-dive in risk management.While simplification of examination or syllabus may not be an ideal way to attract students, regular incentives to those who pass say five or six papers would be a good start. At the end of the day, it is not the insurers’ business that is dependent on an actuary, what goes out of the pockets of the end customer is also decided by them.