What is an Actuary ?

The future is uncertain. Some of the events that can happen are undesirable. "Risk" is the possibility that an undesirable event will occur. Actuaries are experts in:
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Evaluating the likelihood of future events Designing creative ways to reduce the likelihood of undesirable events Decreasing the impact of undesirable events that do occur.

The impact of undesirable events can be both emotional and financial. Reducing the likelihood of these events helps relieve emotional pain. But some events, such as death, cannot be totally avoided. So, reducing their financial impact is very important. Actuaries are the leading professionals in finding ways to manage risk. It takes a combination of strong analytical skills, business knowledge and understanding of human behavior to design and manage programs that control risk. Actuaries love what they do. Their work is intellectually challenging and they are very well-paid. Actuaries are key players in the management team of the companies that employ them. In a fast-changing world, with new risks and the need for ever-more creative ways to tackle them, there are constant opportunities for personal and professional growth in an actuarial career, and the pleasure of life-long learning. Most actuaries work in a pleasant environment, alongside other professionals, and enjoy the respect of their peers. This is why the actuarial profession has consistently been rated as one of the top five jobs in the United States according to Jobs Rated Almanac. Actuaries are the analytical backbone of our society's financial security programs. They are the brains behind the financial safeguards we have implemented in our personal lives, so we can go about our daily lives without worrying too much about what the future may hold for us. These are the safeguards that protect us from life's catastrophes. The insight into risk that actuaries have also helps to ensure that our savings are working hard for us, so that everything we love and cherish can grow and flourish. The work of actuaries benefits all of us.

What is risk and how do actuaries manage risk?

Explaining what an actuary does would not be complete without also explaining risk itself. Risk comes in many forms. Every person and organization faces risk. As experts in measuring and managing risk, actuaries fill a significant need in our society. Their contribution to society's psychological, physical and economic well-being is immense. If the risk management programs actuaries develop didn't exist, our economy would not be able to grow as it does. Consider the following: 1. Would as many people be willing to own a home if fire insurance did not exist? 2. Would a company build a factory that could be destroyed in an earthquake if it were not protected by insurance? 3. Would people spend money today and still be confident about their future if there were no retirement programs or social security? 4. Would the cars people drive be safe if the parts were not rigorously tested to last for many years using mathematical techniques actuaries routinely use? 5. Would parents enjoy risky and adventurous recreational activities such as rock climbing or skiing if their children faced financial disaster in the event of an accident? 6. Would the banks (and the money deposited in them) be safe if their assets and liabilities were not carefully managed to control financial risk? 7. Would the returns on our investments be high if financial institutions such as mutual funds, banks, and insurance companies did not use sophisticated techniques to improve returns without increasing risk too much? There are many ways to manage risk. While there are some well-established techniques, both academics and practicing actuaries, are constantly inventing new ways to maximize financial results for the participants in our economy, without exposing them to excessive risk. Some popular techniques include:
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Offsetting one risk with another. Under certain circumstances, two harmful events might possess the characteristic that when the likelihood of one goes up, the likelihood of the other goes down. Thus, if we know that when coffee prices go up, soda prices go down, we might want to invest in both coffee and soda stocks, to manage our risk. Risk is a matter of perspective. What might be harmful to one party, might be good for another. For example, when the value of the dollar goes down against the French Franc, that might be bad for an American business, but

favorable for a French business. By trading off the consequences of an undesirable event with another party who is affected favorably, both parties are made better off. Focus on catastrophic risks. Mathematical theory shows that the greatest relief from risk (and consequently, the greatest increase in peace of mind) comes from eliminating the consequences of events that are very unlikely, but result in very big losses. Thus, families should think about what might happen if the breadwinner dies, their house burns down, or they lose all of their savings. They should then implement solutions that reduce the likelihood of these events, as well as manage their financial impact. This might involve purchasing a life insurance policy or investing the savings in many different stocks, to reduce the exposure to any one company's fortunes. Generally, a few simple measures taken to address catastrophic risks have a great impact on our well-being. Diversify, diversify, diversify. It is better to take on many small risks than face one big risk. Many small risks generally average out, to give an outcome that is not too extreme in one direction or another. Results become more predictable. Thus, diversification is an important tool in managing risk.

Where do actuaries manage risk?

At this time, the majority of actuaries work in careers that are associated with the insurance industry, though growing numbers work in other fields. They are heavily involved in insurance because that is society's most powerful answer for managing risk. We reduce our risk of financial loss by transferring it to an insurance company that accepts the risk for a price (which is the insurance premium). Actuaries play a key role in designing insurance plans by determining the premium, monitoring the profitability of insurance companies, and recommending corrective action when appropriate. Actuaries working in insurance companies also ensure that insurance companies have set aside enough funds to pay claims and provide advice on how to invest the insurance companys assets. Actuaries work in all sectors of the economy, though they are more heavily represented in the financial services sector, including insurance companies, commercial banks, investment banks, and retirement funds. They are employed by corporations as well as the state and federal government. Many work for consulting firms. Some are self-employed, enjoying financially rewarding careers that also come with the great flexibility of being one's own boss.

"Actuary" is Rated One of the Best Jobs in America!

"Actuary" was recently included as one of the Best Careers of 2007 in US News and World Report. The job "actuary" has also been rated the second best job in the United States by the Jobs Rated Almanac (Sixth Edition, 2002). The popular reference book lists the actuarial profession above other highly regarded careers such as accountant or attorney. Only "biologist" rated higher. The Jobs Rated Almanac printed five previous editions between 1988 and 2001. In two editions, "actuary" was rated as the best job and in two others, "actuary" was rated second best. "Actuary" has never been rated lower than fourth, a ranking it received in the fifth edition before climbing two spots in the most recent edition. The editors compiled statistics on 250 occupations, from accountant to zoologist. The occupations are ranked on the basis of six key criteria: environment, income, employment outlook, physical demands, security, and stress. The data comes from government sources, such as the U.S. Bureau of Labor Statistics and the U.S. Census Bureau, as well as studies from trade associations and industry groups.
The Ten Best Jobs

1. Biologist 2. Actuary 3. Financial planner 4. Computer-systems analyst 5. Accountant 6. Software engineer 7. Meteorologist 8. Paralegal assistant 9. Statistician 10. Astronomy

Professional Actuarial Designations

Actuaries earn professional designations based on the organization they belong to and their status in the professional exam system. When an actuary has met certain professional educational standards by passing a series of exams, he or she achieves the designation of Associate. Actuaries who specialize in property and casualty practice receive the ACAS designation. It stands for Associate of the Casualty Actuarial Society. Actuaries who practice in life, health, finance, investments or pensions receive the Associate of the Society of Actuaries, or ASA, designation. After achieving the Associate designation, the actuary can elect to continue to take exams to achieve the highest designation, Fellow. Casualty actuaries are Fellows of the Casualty Actuarial Society, or FCAS. Fellow of the Society of Actuaries, or FSA, is the designation achieved by life, health, pension, finance, and investment actuaries. Below are the different actuarial designations and the organizations that grant them. Check out the actuarial alphabet.

FCAS Fellow of the Casualty Actuarial Society ACAS Associate of the Casualty Actuarial Society FSA Fellow of the Society of Actuaries ASA Associate of the Society of Actuaries MAAA Member of the American Academy of Actuaries FSPA Fellow of the American Society of Pension Professionals & Actuaries MSPA Member of the American Society of Pension Professionals & Actuaries FCA Fellow of the Conference of Consulting Actuaries

ACA Associate of the Conference of Consulting Actuaries FCIA Fellow of the Canadian Institute of Actuaries EA Enrolled Actuary

Actuaries in India
Actuarial profession was formally established in 1848, with the formation of Institute of Actuaries, London. In India, traditionally actuaries were found only in the life-insurance sector but now with the opening up of the economy they are wanted by non-life insurance companies, banks, stock exchanges, private and government agencies and this is one field where demand exceeds supply. The Actuarial Society of India (ASI), the only professional body of Actuaries in India was formed in 1944 and was admitted as a member of the International Actuarial Association (IAA), an umbrella organization to all actuarial bodies across the world, in 1979. It was registered in 1982 under registration of Literacy, Scientific and Charitable Societies Act XIII of 1960. Its objectives include the advancement of Actuarial profession in India, providing opportunities for interaction among members of the profession, facilitating research, arranging lectures on relevant subjects and providing facilities and Guidance to those studying for the professional Actuarial Examination. The Institute of Actuaries Of India (IAI or formally ASI) was initially started as a non-examining body when Actuaries used to get qualified from Institute of Actuaries or Faculty of Actuaries of UK. The Institute of Actuaries of India started conducting Entrance Examinations in India for students of Institute of Actuaries, UK, in 1975. In 1989, it started conducting examinations for its Indian qualification up to Associate ship level, and in 1992, it started conducting Fellowship level exams. The IAI has been following the UK pattern of examinations since November 2000 with an eye to be a part of global standards set by the International Actuarial Association (IAA). To become an actuary one must be a Fellow of a recognised professional examining body like the Actuarial Society of India (ASI), Mumbai or the Institute of Actuaries, London. The work of an actuary involves a lot of number crunching and the nature of work is quite tedious, nevertheless it offers rewards in terms of intellectual challenge, status, job satisfaction and earnings. As their judgment is the basis of decision making for many business activities, their career paths often lead to upper management and executive positions.

Institute of Actuaries in India Members of the Council

As constituted, effective 4th September, 2010 Liyaquat Khan A.D. Gupta Rajesh Dalmia Tarun Bajaj Dr. R. Kannan Anand R. Prabhu Anil K. Singh G.L.N. Sarma K. S. Gopalakrishnan K. K. Wadhwa Saket Singhal T. Bhargava N. Kalpana Vibha Bagaria President Vice President Hon. Secretary Member Nominated as per Govt. of India Member Nominated as per Govt. of India Member Member Member Member Member Member Member Member Member