Actuarial Science: The Definitive Guide

Actuarial Science-The Definitive Guide

Actuarial science is an integral part of risk assessment, particularly in the insurance sector. It involves assessing and analyzing risk using mathematical & statistical models and programming languages to help managerial or investment decisions.

It is a vital function in modern businesses that face risk in various forms.

Many young students, aspiring professionals, and parents feel intimidated by actuarial science and find it tough to understand its scope.

Are you confused about what exactly actuarial science is?

You are not alone!

Knowing substantially about this fascinating profession will certainly give you the clarity to make the right career choice.

This blog will elucidate different elements of actuarial science, including the scope of the subject, employment opportunities, remuneration, job profile & demand for actuarial science, and much more.

This definitive guide will leave you confident about your understanding of actuarial science.

Read on to find the answers to your questions about actuarial science.

What Is Actuarial Science?

Actuarial science is a discipline that uses mathematical and statistical models to analyze data and assess risk in areas such as insurance, investments, finance, pension, and several other industries and functions.

Actuarial science relies on various disciplines, including but not limited to programming, statistics, computer science, economics, and probability.

Actuaries are commonly known as the mathematical geniuses of the insurance world, and with good reason!

Earlier, actuarial science was limited to the insurance sector. With increasing risk exposure in various industries, coupled with the need for smart analytical minds, actuaries are today demanded across several businesses, such as healthcare, M&A, travel, reinsurance, and even criminal justice.

Interestingly, the US Department of Justice uses actuarial models to set criminal sentencing guidelines using details such as the nature of the crime, age, ethnicity, etc.

This shows that the scope and implications of actuarial science are growing rapidly, making it a worthy profession for young aspirants.

Is Actuarial Science Harder Than CA?

Actuarial science is one of the toughest professions – even tougher than chartered accountancy.

Actuaries deal with data analysis, risk assessments, and financial modeling. While accountants ensure monetary and fiscal compliance and maintain sound financial records.

Actuarial science is more forward-looking and deals with trends, predictions, and future risk mitigation. On the other hand, accountancy deals with financial events that have occurred in the past. Accountants maintain compliance with laws and keep up with taxation requirements.

Actuaries work more with numbers, mathematical models, and a high quantum of data. Accountants work with different stakeholders to maintain financial records. CAs, on the other hand, are extensively involved in accountancy, compliance, taxation, and economics.

Both career paths offer excellent opportunities for career progression and growth.

While the two professions vastly differ in job profiles and skill sets, actuaries have a broader scope of work and study.

This makes it more strenuous to become and be an actuary.

Is Actuarial Science a Good Career?

Actuarial science is a good career option for young minds inclined toward statistics, mathematics, economics, and computer science.

In the US alone, there is an expected 21% increase in actuarial jobs by 2028, according to the Bureau of Labour Statistics. This makes actuarial science a good career option.

There are no surprises here. Actuarial science ranks #8 in the best business jobs in the world and #13 in the best STEM jobs globally as per a report published by U.S News .

Now more than ever, several newer industries are hiring actuaries for the first time to manage their risk exposure to various factors such as currency conversions, investments, disinvestments, etc. actuarial science is no longer restricted only to insurance or finance industries.

Choosing a career involves considering several factors. From remuneration to opportunities for career advancement and demand for skills offered, numerous determinants exist in selecting a suitable career.

Make sure you choose a career that matches your interest and skill set.

Is Practicing Actuarial Science High Paying?

Absolutely! Actuarial science is indeed a high-paying job.

Experienced actuaries can earn anywhere from $150,000 to $250,000 annually, according to a report published by the Society of Actuaries in the US and The Casualty Actuarial Society.

In 2021, the median salary for actuaries was $105,900. The top 25% of salaries paid to actuaries was $153,310 in that year. Salaries for actuaries in the US in 2021 went as high as $235,310 as per the report published by U.S News.

While several determining factors come into play, such as experience, the industry of work, and geographic location, actuaries are well-compensated professionals.

In fact, the average pay of actuaries is higher than other comparable jobs, such as mathematicians, accountants, and financial managers.

Does Actuarial Science Consists of a Lot of Math?

Yes, actuarial science involves high mathematics proficiency.

Being an actuary involves studying & deciphering trends and assessing investment risks to make smart financial decisions. All of this requires superior mathematical skills.

Long story short – math is at the core of actuarial science.

While a day-to-day actuarial job primarily involves the use of probability and financial mathematics, actuary exams and study materials challenge students with various concepts in algebra, calculus, statistical modeling, and more.

Choosing an excellent actuarial program can help students attain proficiency in mathematics. A good actuarial institution can help you build the essential number-crunching skills necessary to be an actuary.

Is MBA a Better Career Choice Than Actuarial Science?

Financial Analysts (MBAs) and actuaries both work primarily in the finance and insurance sectors. But, their scope of work is vastly different.

Rather than choosing between actuarial science and an MBA, approach this question by drawing a trade-off between the skills required.

Let me explain how.

Actuaries can spend years in low-paying jobs until they clear significantly tough exams. On the other hand, MBAs secure well-paying positions in organizations after a two-year degree.

Actuarial science demands a strong proficiency in mathematics and programming. The same is not true for financial analysts.

Business analysis is more people-oriented work, whereas an actuary has more to do with analysis, risk assessment, and financial/mathematical modeling.

MBAs may be required to show proficiency in consulting, regulatory frameworks, and business dynamics. Actuaries have little scope in these areas.

Hence, it is clear that while both MBAs and actuaries may work closely with one another, their scope of work is different.

Choose a profession based on your interest and your skill set.

Are Actuaries in Demand in India?

The demand for actuaries today is more than ever before.

The basic premise of actuarial science is to identify and mitigate risk. Post-COVID-19, the nature, and impact of risk across global economies are unprecedented. Newer businesses and industries are seeking the skills and expertise of actuaries to help make better business decisions.

The Indian business environment is no different. According to a recent research, the demand for actuaries in India is going to rise by a whopping 20% in the coming decade.

As per a news website, India currently has only 9000 qualified actuaries for a population of 1.3 billion people.

Clearly, there is a glaring shortage of qualified actuaries in India.

What Is the Salary of Actuary Job in India?

The salary of actuaries in India ranges from 3.0 lacs per annum to 12.0 lacs per annum as per a recent study.

In India, the average starting salary across industries for an actuary is around 6.1 lacs per annum.

This translates to a monthly take-home of around 46,000-47,000 INR.

An actuary is poised to earn a handsome salary with increased experience.

Actuaries are in high demand across industries such as insurance, risk management, healthcare analytics, consulting, compliance, and more.

Some organizations that consistently demand actuaries in India include WNS, Mercer, Aon, Accenture, and Deloitte, among others.

Is Being an Actuary Worth It in India?

Certainly! There couldn’t be a better time than now to be a qualified actuary in India. The demand for actuarial science in India is three times the supply of actuaries.

As actuarial science is gaining more and more awareness in India, so is the demand for actuarial skills on the rise.

Actuaries today are sought not just by insurance firms but also by investment consultancies, wealth management companies, stock exchanges, healthcare companies, start-ups, pension funds, and more.

Besides being one of the higher-paid jobs in finance and insurance, actuaries command tremendous respect and prestige in social and professional circles.

This makes it a profession worth considering in India.

Is Actuarial Science Better Than CA?

Actuarial science and CA are like two sides of one coin.

Both are instrumental in maintaining order and sanctity in an organization.

While the scope of actuarial science is wider, as it includes mathematics, programming, and statistics, chartered accountancy is more to do with compliance, revenue management, and taxation.

Actuarial science is a future-oriented discipline aiming to predict or negate imminent risks. Whereas chartered accountants handle financial occurrences or events that have already occurred in the past.

Actuarial science candidates need to clear 15 prescribed subjects to qualify as actuaries. This takes anywhere between 5 to 8 years.

On the other hand, chartered accountants have levels of examinations to clear, which can be done at their own pace, taking roughly 5-6 years.

Actuaries require specialization in mathematics, computer skills, keen analysis, and excellent business sense.

CAs require analytical skills, leadership, time management, and regulatory/legal framework awareness.

No one profession is better than the other.

It is wise to match your skill set and interest to the requirements of both professions and identify what’s best for you.

Does NASA Hire Actuaries?

YES, NASA hires actuaries.

Actuaries are exploring new career paths in never-before-imagined industries, including space travel.

From evaluating the risk of capital investment in new projects to solving spatial problems using mathematical modeling, actuaries have a lot to offer.

Several companies that have never hired actuaries before are now beginning to realize and leverage the value that actuarial sciences have to offer.

This means a broader scope of work for actuaries, more challenging job ecosystems, and greater value to businesses overall.

Is Actuary a Hard Career?

Being an actuary is just a challenging job.

It comes with a high level of responsibility and a constant need to be self-motivated and keep up with market trends.

Actuaries fill multiple roles, such as mathematicians, financial analysts, programmers, business professionals, advisors, economists, and more.

They work with risk exposure and derive data analysis results that influence management decisions. Profiling this risk using mathematical models, projections, and analyses is the daily job of actuaries.

For some, being in such a job can get challenging and over-stimulating over time.

Additionally, the process of becoming an actuary is also extremely arduous. Many candidates give up halfway, which explains the dire shortage of qualified actuaries in India.

There are also several advantages of being in the challenging role of actuaries.

Actuaries enjoy tremendous opportunities for career advancement, superior job growth, consistent demand in the market, and handsome remuneration.

Do Actuaries Do Coding?

Yes, actuarial science involves coding. While actuarial science does not involve extensive and constant coding, there is a need to use certain programming tools.

This is mainly done to organize, analyze and infer useful implications from data. So Microsoft Excel, Python, SQL, and VBA, among other commonly used programming languages, are part of an actuary’s job framework.

There is some good news for those prospective candidates who aren’t proficient in coding.

You don’t have to be a professional at coding. A reputable actuarial college will give you exposure to the basics of coding. Further, many actuaries get better at computer science and coding as they gain experience on the job.

Are Actuaries in Demand?

Actuaries are in demand more than ever before.

Actuarial science is ranked #27 in the 100 best jobs globally. The demand for actuaries is poised to grow at 21% in the decade 2020-2030 in the US alone, much faster than other professions.

Actuaries are also increasingly sought by newer businesses that have not hired actuaries up until now.

Actuaries are no longer restricted to insurance sectors alone and are now employed in healthcare, logistics, space travel, stock investment firms, M&A, international relations, and more.

Overall, the demand and outlook for actuarial science as a profession are very positive.

Why Are Actuaries Highly Paid?

Actuaries offer a niche skill set of mathematical excellence, programming proficiency, and data analysis.

It is not easy for individuals to be proficient in all these disciplines.

Additionally, actuary candidates also clear arguably one of the toughest sets of exams to achieve the tag of an actuary.

With a gestation period of 8 to 10 years, candidates in actuarial science put in tremendous effort and time to become qualified candidates.

Hence, they are paid rightly for their effort and time.

This makes them credible to receive neat six-figure starting salaries.

Additionally, actuaries are always in short supply, making them highly coveted and well-paid across various industries.

There are only 9000 qualified actuaries in India for a population of 1.3 billion.

This gap in demand and supply makes actuaries highly paid.

Which Stream Is Best for Actuary?

Both science and commerce graduates can pursue a career in actuarial science.

There is no restriction or requirement on the education stream to pursue a career in actuarial science.

The only primary requisite for candidates from either background has mathematics and statistics as core subjects.

To become an actuary in India, candidates can pursue B.Sc. and/or M.Sc. in Actuarial science from any reputable and legitimate institution that offers the corresponding course.

Several reputable institutions in India offer courses in actuarial science. These include Chandigarh University, Delhi University, Christ University, and Kerala University, among others.

Can Indian Actuaries Work Abroad?

Absolutely, Indian actuaries can work in several developed and emerging markets abroad.

India has some of the most prestigious institutions to study actuarial science, consistently producing some of the brightest minds in the business.

Hence, it is no surprise that Indian actuaries are offered several international assignments.

According to The Actuary India,’ the Magazine of the Institute of Actuaries in India, several Fellow Members of the institute are currently working on foreign shores.

While foreign jobs may require additional certifications or examinations of the destination country, Indian actuaries find themselves successfully placed in lucrative foreign jobs.

Moreover, Indians have a neutral accent and can work long hours in high-pressure scenarios.

This makes Indian professionals, including actuaries, easily moldable to different work environments abroad.

Do Actuaries Have a Future?

Yes, qualified actuaries have a bright professional future.

They enjoy opportunities for career advancement, lucrative remuneration, respect in social circles, and a secure future, among other factors.

United States Bureau of Labour Statistics predicts a 21% increase in the number of jobs in actuarial science between 2020 and 2030.

The demand for actuaries is growing above the average growth rate of jobs across other professions.

Actuarial science is also ranked #8 in the best business jobs rankings.

Additionally, Actuaries are now sought in newer industries that earlier had no scope for actuarial sciences, such as logistics, tech, and healthcare start-ups.

These factors ensure actuaries have a bright future with a consistent demand for their skill sets.

Which Country Is Best to Work in as an Actuary?

Some countries that offer the highest remuneration to actuaries include France, Germany, the United States, Japan, and Australia.

Here are some of the entry-level salaries offered to actuaries in different countries:

  • United States: $84,575
  • Japan: $78, 618
  • Australis: $78.730
  • Germany: $76,721

Switzerland has topped the charts as the country offering the highest actuarial remuneration, with an entry-level paycheck of 95,000 USD.

Having said that, let’s also remember that remuneration reflects demand exceeding supply. It also indicates a skill set or knowledge that is superior to one’s peers.

With the world evolving into one ‘global’ economy, risks, returns, and rewards across all countries are interdependent.

In such a scenario, risk managers and actuaries are sought in every country worldwide.

Actuaries are in demand worldwide, both in developed countries and emerging markets.

There is plenty of opportunities for actuaries in developed and developing countries.

Do Actuaries Have Stressful Jobs?

Actuaries do not have stressful jobs or long working hours. They also typically do not need to chase targets or deadlines.

Actuaries enjoy a fairly less stressful environment and rarely clock in more than fifty hours a week consistently.

Actuaries also typically work in an office setting and usually do not travel extensively for work. This eliminates any possible stress arising from travel for work.

Having said that, actuaries also have a big bag of responsibilities.

They are in charge of their client’s financial decisions, with a large amount of money riding on these decisions.

Actuaries also use complex mathematical, statistical, and programming models to make these financial decisions. Needless to say, this job profile is fairly intense.

But actuaries also enjoy strong opportunities for career advancement, good job growth, and good remuneration.

What Level of Math Is Needed to Become an Actuary?

Being an actuary requires an advanced level of mathematical knowledge.

Disciplines such as calculus, algebra, statistics, and probability are some of the streams of math that require mastery.

As math is at the core of actuarial science, one must be highly proficient in the same to succeed as an actuary.

Actuaries leverage their understanding of mathematics to draw up models using computer science and programming.

These models are used to analyze data, predict occurrences and help management make financial decisions.

The actuarial syllabus and exams help aspirants develop proficiency in mathematics, paving the way for a successful career.

Why Is Actuary as a Profession Not Popular in India?

Actuarial science is not a popular profession in India for several reasons.

Firstly, actuarial science is one of the toughest qualifications, requiring candidates to pass a rigorous set of examinations. Actuarial science candidates need to clear 15 prescribed subjects to qualify as actuaries.

The success rate for these examinations is as low as a meager 3% – yes, you read that right. Many candidates drop out due to their inability to clear the examinations and put in consistent effort in their studies.

Secondly, there is a long gestation period to become an actuary. Candidates must complete an internship and clear examinations, which can take 5 to 8 years. Some candidates take as long as a decade for their effort to pay off and become qualified actuaries.

Thirdly, despite the demand actuaries enjoy in India, only some legitimate institutions offer a course in actuarial science. The industry recognizes only 50% of the actuarial courses.

Many students fall for marketing gimmicks and fraud institutions that do not offer a legitimate actuarial science course.

These factors make actuary a not-so-appealing career proposition in India.

What Degree Is Best for Actuary?

Mathematics is at the core of actuarial science, with risk management and financial analysis as supporting disciplines.

Hence, choosing a degree with mathematics and statistics as the central theme is the best option for becoming an actuary.

Ideally, candidates may start by earning a graduate actuary degree: A bachelor’s in actuarial science or a degree in mathematics/statistics is the preferred foremost step to becoming an actuary.

To be eligible for a bachelor’s in actuarial science, candidates can take up science or commerce with a specialization in mathematics and statistics.

Further, candidates may also pursue a post-graduate degree in actuarial science or a post-graduate diploma in actuarial statistics.

Many countries have their own actuary entrance examinations and internship programs to become a qualified actuary.

Is Actuary a Respected Job?

Absolutely! Being an actuary is a matter of tremendous prestige and adulation! Actuaries are paid handsomely, enjoy respect and prestige in professional circles, and are lauded for their skills and knowledge. Actuaries are indeed valuable assets for the firms they work with.

Actuaries play a pivotal role in managing investments, mitigating risks, and making high-level organizational decisions. This makes them well-respected and internationally recognized professionals.

The fact that actuaries are in tremendously short supply makes them all the more coveted and sought-after.

Additionally, more and more organizations realize the value of having an actuary on their team. Actuaries are in demand across healthcare, stock trading firms, pension funds, hedge funds, M&A, and more, not just the insurance and finance sector.

Not just in professional circles, actuaries are also greatly respected in social circles and communities for their level of knowledge and expertise.

Do Companies Hire Actuaries?

Yes! Companies across various sectors are hiring qualified actuaries more than ever before.

Actuaries are now in demand by insurance companies and other industries, such as pension funds, healthcare, logistics, and more.

Newer sectors and companies that have never hired actuaries before are waking up to these mathematical geniuses’ necessity in their teams.

Actuaries have a near-zero unemployment rate. [Source]

That’s right. Actuaries are almost always in demand.

Are Actuaries Better Than Accountants?

Actuaries and accountants are pivotal to an organization’s smooth functioning and success.

Actuaries deal with data analysis, risk assessments, and financial modeling. While accountants ensure monetary and fiscal compliance and maintain sound financial records.

Actuarial science is more forward-looking and deals with trends, predictions, and future risk mitigation.

On the other hand, accountancy deals with financial events that have occurred in the past. Accountants maintain compliance with laws and keep up with taxation requirements.

Actuaries work more with numbers, mathematical models, and a high quantum of data. Accountants work with different stakeholders to maintain financial records.

Both career paths offer excellent opportunities for career progression and growth.

No business can be successful without either of these functions. Hence no profession is better than another.

Choosing between the two largely depends on your area of interest and skill set.

Do Actuaries Use Python?

Yes, actuaries use python, VBA, SQL, SAS, and several other programming languages.

But, as an aspiring actuary, knowing all programming languages is not compulsory.

Knowing one programming language for an actuary is sufficient. So choose one that comes naturally to you and in which you can build proficiency. It can be any language that one may find relatively easier.

In recent research, 64% of actuarial employers prefer a candidate who knows a programming language.

Hence, even from the employability perspective, actuarial candidates should know about computer science and programming.

Do Actuaries Travel a Lot?

No, being an actuary usually does not involve a lot of travel.
Being an actuary is largely a full-time job in an office setting.

As actuarial science involves a lot of number crunching, programming, and modeling, it requires focus and involvement in a calm and quiet atmosphere.

That said, there may be travel involved to meet clients or handle individual projects in different parts of the country or the world.

The amount of travel also depends on the industry in which an actuary works.

Actuaries working in healthcare, M&A, and hedge funds may typically enjoy more travel than those working in the insurance sector.

Can Technology Replace Actuaries?

According to a ‘risk of automation´ study for actuarial science, there is a 52% chance that this practice can be automated. [Source]

Having said that, the human element of actuarial sciences is very high and very important.

Pivotal skills such as negotiation, forethought, persuasion, and logic are lost on robots. One cannot expect these humane skills to be automated.

For this reason, actuaries do not face such a high risk of automation.

Is Actuarial Science Stressful?

Being an actuary is not stressful.

Actuaries do not face significant stress at work and typically do not work beyond 50 hours a week.

It is a stimulating career with a lot of thought-provoking concepts and ideas, but there isn’t much stress in terms of sales, targets, or deadlines.

Having said that, the process of becoming an actuary may be stressful. Actuaries have a rigorous study period of about 8-10 years until they’re fully qualified.

Actuarial science candidates need to clear 15 prescribed subjects to qualify as actuaries.

With hundreds of hours put into studying complex subjects and several exams to pass, the process of becoming an actuary can be stressful. This also explains why the majority of candidates drop out of their pursuit to become actuaries.

Is Actuary Easier Than CA?

Becoming an actuary is tougher than becoming a chartered accountant.

Actuarial exams test candidates on much tougher concepts, and the exams get more difficult as candidates progress to higher levels.

Actuarial science candidates need to clear 15 prescribed subjects to qualify as actuaries. This takes anywhere between 5 to 8 years.

On the other hand, chartered accountants have levels of examinations to clear, which can be done at their own pace, taking roughly 5-6 years.

The scope of actuarial science involves a lot of mathematics, programming, and statistics, whereas the scope of accountancy is not as wide.

Actuaries deal with risk mitigation for events occurring in the future.

They use mathematical and financial modeling to predict events of risk. On the other hand, accountants deal with compliance, taxation, and legal implications for financial events that have occurred in the past.

Having said that, both career paths have good demand and opportunities for career progression.

Who Earns More – Accountants or Actuaries?

Actuaries typically make more money than accountants.

In a study conducted in the US, the median salary of actuaries was found to be $111,030 versus the median salary of accountants, $73,560.

That’s a big pay gap – which is largely justified by the fact that the skills of an actuary are hard to find. Actuaries are always in demand and have near-zero employment rates.

There are hundreds of more accountants in the market compared to much fever qualified actuaries.

Actuarial science is also a tougher qualification to earn as compared to chartered accountancy.

This explains the pay gap between actuaries and accountants.

How Many Years Is Actuarial Science?

A candidate aspiring to become a qualified actuary takes a minimum of 8 years to complete their qualification.

This period is broken up into different phases:

  • Undergraduate phase Bsc in Mathematics, Actuarial Science or Statistics– 3 years
  • Honors or Masters Degree in Actuarial Science – 1 or 2 years
  • Internship of 4 years as an actuarial intern

Many students drop out of the pursuit of becoming qualified actuaries primarily due to the long gestation period.

What Is the Salary of a Fully Qualified Actuary in India?

The average entry-level salary of a qualified actuary in India is Rs.9,75,615.

Salaries for a qualified actuary at an entry-level can go up to 13.0 lacs per annum.

With coveted employers such as McKinsey & Company, Genpact, PwC, Oracle, and more, actuaries in India enjoy an excellent entry-level salary.

As actuarial science is a profession with a near-zero employment rate, qualified candidates almost always find themselves employed with reputable firms.

As your experience as a qualified actuary increases, so does your remuneration.

Did You Know?

Actuarial science is over 250 years old!

James Dodson’s work in the field of long-term insurance contracts that have the same premium every year is considered a path-breaking landmark in the history of actuarial science.

This led to the formation of the Society for Equitable Assurances on Lives and Survivorship in London in 1762 – what is commonly known as Equitable Life today.

Equitable Life first used the term “actuary” for its CEO way back in 1762. Up until then, an actuary simply meant an official who recorded decisions or “acts” in a court of law.

Do you know what’s fascinating about Equitable Life?

All other companies that didn’t use mathematical and scientific models often failed in their actions. This forced them to adopt the methods and practices that Equitable Life initiated.

Interestingly, William Morgan is known as the father of modern actuarial science for his monumental contribution in the 1780s and 1790s.

Now Over to You!

This brings us to the end of the definitive guide to actuarial science.

Everything there is to know about actuarial science is here for you to absorb.

You now have a fair understanding of the scope of actuarial science, the job profile of actuaries, and the future of actuaries both in India and globally.

With this knowledge, you can make an informed decision on your career path and whether actuarial science is the right profession for you.

With hard work, dedication, and willpower, aspiring actuaries can qualify for the examinations and make a lucrative career out of practicing actuarial science.

After reading this guide on actuarial science, we would like to know your thoughts on this challenging yet rewarding career path.

What’s your opinion on actuarial science? Is this fascinating subject a probable career path for you?

Leave us a comment and tell us what you think of actuarial science and its future in the modern global economy!

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