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Life is unpredictable. We do not know what the future has in store for us. But how do we protect ourselves from these unforeseen dangers? We buy insurance policies. An insurance policy like a health insurance policy or a car insurance policy protects our lives and valuable assets from unexpected accidents and damages. But how do these insurance policies work? Insurance policies are agreements that we buy from an insurance company or a financial institution like a bank. An insurance policy is an agreement against which we pay insurance premiums at regular intervals as contingent to safeguard the future of our loved ones and our property from losses, damage, or theft. Now the question is, how do these insurance companies or banks determine the amount to be paid as premiums. This is where the role of Actuarial Science emerges.
Actuarial Science is an excellent career path and has great career prospects in India and abroad. People who work in this field are called actuaries and have a great analytical mind, have a detailed understanding of statistics, mathematics, and financial models, and are good at risk management. So, what is Actuarial Science? Let’s dig in.
What is Actuarial Science?
Actuarial Science is the study of financial risks, data analysis, profit/loss, legal liability, and risk management for insurance companies, business organisations, investments, and financial institutions through the implementation of proper data, logic, statistics, and mathematical calculations. An actuary is a highly skilled job and promises a handsome salary.
Actuarial science is an interesting career especially for those with a good analytical mind, a strong background in Math and Statistics, and an interest in finance and economics. Following is an easy guide that will help you start a career in this field.
How to Start a Career in Actuarial Science?
The Institute of Actuaries in India (IAI) is responsible for admission, training, and education of actuaries in India. For admission, a student needs to clear the ACET (Actuarial Common Entrance Test) exam.
Eligibility Criteria:
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Candidates who have passed their 10+2 exam and are of 18 years of age are eligible to sit for the ACET entrance test.
Candidates who have passed their 10+2 exam and are of 18 years of age are eligible to sit for the ACET entrance test.
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Graduation or Post-Graduation in Mathematics/Statistics/Commerce with Mathematics/Economics/Computer Science/Engineering can apply.
Graduation or Post-Graduation in Mathematics/Statistics/Commerce with Mathematics/Economics/Computer Science/Engineering can apply.
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Students who have cleared Chartered Accountancy/Cost and Works Accountancy/Company Secretary/MCA/MBA in Finance can also apply.
Students who have cleared Chartered Accountancy/Cost and Works Accountancy/Company Secretary/MCA/MBA in Finance can also apply.
Skills Required:
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In-depth knowledge in Mathematics, Calculus, and Statistics.
In-depth knowledge in Mathematics, Calculus, and Statistics.
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Analytical skills.
Analytical skills.
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Business acumen.
Business acumen.
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Good communication skills.
Good communication skills.
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Ability to forecast risks.
Ability to forecast risks.
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Mortality analysis.
Mortality analysis.
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Calculation of compound interests.
Calculation of compound interests.
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Knowledge about Financial Economics.
Knowledge about Financial Economics.
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Ability to handle large chunks of data.
Ability to handle large chunks of data.
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Sound technical skills.
Sound technical skills.
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Handling huge workloads.
Handling huge workloads.
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Knowledge about business profit/loss and financial models.
Knowledge about business profit/loss and financial models.
Top 5 Careers in Actuarial Science
After you complete your Bachelor’s or Master’s Degree in Actuarial Science, you can pursue lucrative careers in insurance, finance, healthcare, retail, investment banking, business, and the consultancy domains. Here are the top 5 job careers to look for:
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Actuarial Analyst
Actuarial Analyst
Actuarial analysts mainly work in the insurance industry and finance sectors. Their job is to compile and analyze data, make a profit/loss analysis, ascertain risk projections for insurance companies and create statistical models to build insurance policies for policyholders to protect them from liabilities, natural calamities, and accidents.
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Financial Analyst
Financial Analyst
A financial analyst helps a company to make investment plans, forecast financial risks, and analyze the cost-effectiveness of marketing campaigns. They also support management in the decision-making process regarding investment and creating monthly and annual budgets.
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Insurance Underwriters
Insurance Underwriters
Underwriters determine whether to accept an insurance application or not. They collect the background information of the applicants such as their health, age, and other demographics, analyze statistical data, calculate risks, create policies, and determine premiums that are both acceptable by the policyholders and are profitable for the company.
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Actuarial Consultants
Actuarial Consultants
Actuarial consultants are professionals who work in different sectors like finance, insurance, banks, and government organizations. Consulting actuaries help in risk assessment, help in calculating insurance premiums, make pension plans, design appraisals to help in mergers and acquisitions for companies, and investment plans.
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Financial Risk Analysts
Financial Risk Analysts
Financial risk analysts are responsible for predicting potential financial risks, research and forecast market trends, and evaluate operational risks. They help the management in the decision-making process through statistical analysis and data evaluation process and recommend contingency plans for emergencies that will help improve the business. Financial risk analysts mainly work for government agencies, commercial businesses, and insurance companies.
Top Institutes to Study
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Institute of Actuaries of India (IAI).
Institute of Actuaries of India (IAI).
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Amity School of Insurance, Banking, and Actuarial Science (ASIBAS), Noida.
Amity School of Insurance, Banking, and Actuarial Science (ASIBAS), Noida.
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Bishop Heber College, Tiruchirappalli.
Bishop Heber College, Tiruchirappalli.
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Narsee Monjee Institute of Management Studies (NMIMS), Mumbai.
Narsee Monjee Institute of Management Studies (NMIMS), Mumbai.
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Delhi University.
Delhi University.
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National Insurance Academy (NIA), Pune.
National Insurance Academy (NIA), Pune.
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