A PROJECT ON:

ROLE OF ACTUARY IN INSURANCE

BACHELOR OF COMMERCE

BANNKING & INSURANCE

SEMESTER (VI)

(2017-2018)

SUBMITED BY:

REEMA DEVENDRA CHAVAN

ROLL NO: 10

PROJECT GUIDE:

MR.MILIND SARAF

K.J.SOMAIYA COLLEGE OF ARTS & COMMERCE,

(AUTONOMUS)

VIDYAVIHAR (EAST), MUMBAI-400077

1
 PROJECT ON:

ROLE OF ACTUARY IN INSURANCE

BACHELOR OF COMMERCE (BANKING & INSURANCE)

SEMESTER (VI)

(2017-2018)

Submitted

In Part Fulfilment of the Requirement

For the Award of the Degree of

Bachelor of commerce-Banking & Insurance

Banking & Insurance

REEMA DEVENDRA CHAVAN

Roll no-10

K.J.SOMAIYA COLLEGE OF ARTS & COMMERCE,

(AUTONOMUS)

VIDYAVIHAR (EAST), MUMBAI-400077

 CERTIFICATE

This to certify that MIS.REEMA DEVENDRA CHAVAN ROLL NO :10

Student of K.J. Somaiya College of Arts & Commerce (B.COM BANKING AND
INSURANCE) SEMESTER V (2016-2017) has successfully completed the project on
ROLE OF ACTUARY IN INSURANCE under the guidance of MR.MILIND SARAF.

Mr . MILIND SARAF DR.(Smt.) SUDHA VYAS

(PROJECT GUIDE) (PRINCIPAL)

MR . MILIND SARAF EXTERNAL EXAMINER

(Course-co-ordinator)
 DECLARATION

I MISS.REEMA DEVENDRA CHAVAN, the student of B.Com BANKING

&INSURANCE , Semester V (2017-2018) here by declares that I have completed project on
ROLE OF ACTUARY IN INSURANCE. Whenever the data/information have been
taken from books or other sources the same have been mentioned in bibliography. The
information submitted is true and origin to the best of my Knowledge.

MISS. REEMA CHAVAN

(ROLL NO.10)
 ACKNOWLEDGEMENT

On the event of completion of my project ROLE OF ACTUARY IN INSURANCE

I take the opportunity to express my deep sense of gratitude towards all these people without
whose guidance, inspiration & timely help this project would have never seen the Light of
day.

Heartily, thanks to Mumbai University for giving me the opportunity to work on this project.
I would also like to Thanks our principal Dr .(Smt.) SUDHA VYAS for giving us the
brilliant opportunity to work on this project.

I find great pleasure in expressing my deepest sense of gratitude towards my project guide
MR. MILIND SARAF whose guidance & inspiration right from the conceptualization to
the finishing stages proved to be very essential & valuable in the completion of the project
and my Co-ordinator MR. MILIND SARAF for their help & valuable support throughout
the term of the project. It was a learning help & valuable support throughout the term of the
project. It was the learning experience to work under her guidance.

Lastly, I would like to thank the faculty member and staff of K.J.SOMAIYA COLLEGE
(ARTS & COMMERCE) for their kind support and help during the project.

MISS.REEMA CHAVAN

(ROLL NO: 10)

SR.NO. CONTENTS PAGE NO.

1. Executive summary

2. Introduction

3. Who is actuary

4. Nature of work

5. Role of actuaries in insurance

6. Activities of actuary in insurance

7. Actuarial control cycle

8. Specific duties of an actuary

9. Skills of an actuary

10. Procedure for appointment of an actuary

11. Evolution of actuarial profession

12. Work profile of an actuary

13. Eligibility to become actuary

14. Training and other qualification

15 Actuarial Society of India

16 How actuarial manage risk

17 Carrier opportunity in insurance sector

18 conclusion

19. Bibliography & Webliography

 1.EXECUTIVE SUMMARY

Most people will know something about the profession of accountants, doctors and lawyer
But tell someone youre an actuary and more than likely they will look at you blankly never
having heard of an actuary

The reason for taking this topic is to make everyone aware of work of actuaries which is
important in insurance companies An actuary really plays an important role in insurance . He
deals with the business of insurance and its responsible for many areas under the board
category of insurance . He is responsible for collecting the data to forecast future risks and
see how the prediction will affect various aspects of insurance

Actuaries also hold a legal responsibility for protecting the benefits promised by insurance
companies. Traditionally actuaries have been associated with insurance sector but in present
scenario with the economy opening up actuaries are needed in in sector like non-life
insurance, employee benefits, health insurance, assets management , reinsurance, insurance
broking houses and counselling companies

.An actuary is a combination of business executive manager . Actuaries are the analytical
backbone of our society financial security programs . The hypothesis of the study of actuary
in insurance as with the advent of this new profession in insurance industry would competent
to minimize risk in superior way
 2.INTRODUCTION

Now a day most of them have seen , heard and read about companies which
provide insurance to policy holder in case of any eventually like accidents,
hospitalization, household hazards, thefts or death and still others .
Whol o o k a f t e r i n v e s t m e n t s c h e m e s , e m p l o ye e b e n e f i t s , r e t i r e m e n t b e n e f
its and pension schemes. The policy holders are required to pay a fixed
a m o u n t a s instalments at regular intervals and they get this money back in the event of any
untoward incident or upon the maturity of the policy. Have you ever wondered
who decides as to what amount of money a policy holder should pay as premium or what sum
should be given as pension amount or returns by the company? Well, this exactly is what
an actuary does. They calculate insurance risks and premiums. Technically
speaking the job of an actuary is to assess the financial impact of an uncertain future
event. Roughly speaking they look at the financial aspect of disasters; sarcastically speaking
they are financial astrologers An actuary has to combine the skills of a statistician, economist
and financier and employ techniques of probability, compound interest , law, marketing
,management etc to predict the outcome of future contingencies and design solution to lessen
the financial severity of such event .
Actuarial profession was formally established in 1848, with the
f o r m a t i o n o f 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 are one field where demand exceeds supply
The Actuarial Society of India (ASI), the only professional body of Actuaries in I n d i a w a s
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
thea d v a n c e m e n t o f A c t u a r i a l p r o f e s s i o n i n I n d i a , p r o v i d i n g o p p o r t u n i t i e
s f o r interaction amongmembers of the profession,
facilitating research, arrangingl e c t u r e s o n r e l e v a n t s u b j e c t s a n d p r o v i d i n g f
a c i l i t i e s a n d G u i d a n c e t o t h o s e studying for the professional Actuarial Examination
The Institute of Actuaries Of India (IAI or formally ASI) was initially started as an o n -
ex amining body when Actuaries used to get qualified from Institute of
Institute of Actuaries or Facult y of Actuaries of UK. The Institute of
A c t u a r i e s o f I n d i a started conducting Entrance Examinations in India for
students of Institute of Actuaries, UK, in 1975. In 1989, it started conducting
examinations
Indianq u a l i f i c a t i o n u p A s s o c i a t e s h i p l e v e l , a n d i n 1 9 9 2 , i t s t a r t e d c o n d
uctingF e l l o w s h i p l e v e l e x a m s . T h e I A I h a s b e e n f o l l o w i n g
t h e U K p a t t e r n o f examinations since November 2000 with an eye to be a
part of global standard asset by the International Actuarial Association
(IAA).T o b e c o m e a n a c t u a r y o n e m u s t b e a F e l l o w o f a r e c o g n i z e d
p r o f e s s i o n a l 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
 3.WHO IS ACTUARY?

Actuaries are professionals who apply mathematics to financial problems. They evaluate the
financial implications of contingent events, in other words, events that are not certain to
occur. They are often involved in managing the risks that can arise from undesirable
contingent events. Actuaries evaluate the likelihood of future events. They also design ways
to reduce the financial impact of undesirable events that do occur. To do their work, actuaries
must have a high level of technical knowledge. For example, they need to understand the
nature of insurance, the risks inherent in different types of assets, the ways in which statistical
models can be used, and the legal and regulatory constraints that apply to the business. They
must also have good business sense, problem solving skills, and the ability to communicate
effectively with others. Their work often affects many stakeholders, so they must be able to
balance different interests and observe high ethical standards in doing so. Although the
actuarial profession has existed for many years, it is not a large profession and, therefore, is
not well known by members of the general public. In fact, there are many countries in which
no actuaries reside. Actuaries have traditionally worked primarily in the insurance and
pension industries, and mostly in countries where those industries are well established. In the
insurance industry, actuaries can be involved in all types of insurance: life or nonlife; and
direct insurance or reinsurance. Although actuaries are often employed by insurers, many are
employed by consulting firms and provide services to more than one insurer. Some insurance
actuaries work for supervisory authorities, as either employees or consultants. Within these
organizations, actuaries can fill a wide range of positions. Many actuaries work in technical
roles, applying their skills to tasks such as designing new insurance products, forecasting
expected rates of loss, setting premium rates, or calculating the liabilities of an insurer to its
policyholders. Others apply their knowledge and experience in management positions, with
responsibilities ranging from technical or operational departments, to product line
management, to senior executive roles. Actuaries are experts who perform actuarial analysis
of insurance rates rating procedures, rating plans, and schedules of insurance companies .
these are professional who are experienced in reviewing and analysing insurance operations,
reserve and underwriting procedures and provide technical assistance regarding actuarial
matters to policy examiners and other technical staff
The graph shows the gender divide; more men work as an actuary than women; one to four
years is the highest years of experienced actuarial analysts employed in an organisation.

the graph above represents the breakdown of industries hiring the service of actuaries,
according to BLS 2012 data. It shows that the professional presence is deeply entrenches
within the insurance industry.
 4.Nature of work

Through their knowledge of statistics ,finance and business actuaries asses the risk of events
occurring and help to create policies for businesses and clients that minimize the cost of that
risk. For this reason, actuaries are essential to the insurance industry

Actuaries analyse data to estimate the probability and likely cost to the company of an event
such as death, sickness ,injury ,disability, or loss of property. Actuaries also address financial
matters, such as how a company should invest resources to maximize return on investments
or how an individual should invest in order to attain a certain retirement income level. Using
their expertise in evaluating various type of risk, insurance policies, pension plans and other
financial strategies in a manner which will them to help ensure that the plans are maintained
on sound financial basis. Most actuaries are the employee in the industry, specializing in
either property and casualty insurance or life and health insurance. They use sophisticated
modelling techniques to forecast the likelihood of certain events occurring and the impact of
these event s will have no claims and potential losses for the company . For example ,
property and casualty actuaries calculate the expected number of claims resulting from
automobile accident , which varies depending on the insured persons age, sex ,driving
history, type of car, and other factors. Actuaries ensure that the premium must be profitable,
yet competitive with other insurance companies

Within the life and health insurance fields, actuaries help companies develop health and long-
term-care insurance policies by predicting like likelihood occurrence of heart disease,
diabetes, stroke , cancer and other chronic ailments among a particular group of people who
have something in common, such as living in certain area or having a family history of
illness. Such work of actuaries can be beneficial to both the consumer and the company
because the ability to accurately predict the likelihood of a particular health event among a
certain group ensures that premiums are assed fairly based on the risk to the company.
Additionally, life insurance actuaries help companies develop annuity and life insurance
policies foe individuals by estimating how long someone is expected to live

Actuaries in other financial services industries manage credit and help to set a price for
corporate security offerings. They also devise new investment tools to help their firms
compete with other companies. Pension actuaries work under the provisions of the Employee
Retirement Income Security Act (ERISA)of 1947 which sets minimum standards for pension
and health plans in private industry. Actuaries working for government help manage social
programs such as social securities and medicare

Actuaries help determine corporate policy on risk, for example, and also help explain
complex technical matters to company executives, government officials, shareholder,
policyholders or the general public. They may testify before public agencies on proposed
legislation that affects their business or explain changes in contract provisions to customer.
They may help companies develop plans to enter new lines of business or new geographic
market by forecasting demand in competitive settings .

Consulting actuaries provide advice to clients on a contract basis. The duties of most
consulting actuaries are similar to those of other actuaries .For example, some may evaluate
company pension plans by calculating the future value of employee and employer
contributions and determining whether the amounts are sufficient to meet the future needs of
retirees. Others help companies reduces their insurance costs by offering them advice on how
to lessen the risk of injury on the job

Consulting actuaries sometimes testify in court regarding the value of potential lifetime
earnings of a person who is disabled or killed in an accident, the current value of future
pension benefits (in divorce cases), or other values arrived at by complex calculations. Some
actuaries work in reinsurance, a field in which one insurance company arrangres to share a
large prospective liability policy with another insurance company in exchange for a
percentage of the premium
 5.. Role of Actuaries in insurance

Actuaries are experts who perform actuarial analysis of insurance rates, rating procedures,
rating plan, and schedules of insurance companies . These are professionals who are
experienced in reviewing and analysing insurance operations, reserves and underwriting
procedures and provide technical assistance regarding actuarial matters to policy examiners
and other technical staff. In other w o r d s t h e y a r e t h e p e o p l e w h o a s c e r t a i n i n
a d v a n c e t h e u n c e r t a i n e v e n t s t h a t could take place in future and come to a financial
conclusion

Actuaries involve in pricing, product design , financial management , corporate planning

They use their professional expertise in solving complication financial problems by
combining their theoretical as well as practical knowledge. Actuaries also hold a legal
responsibility for protecting the benefits promised by insurance companies. Their role
demands the highest standard of personnel integrity and application of professional
skills. Actuaries balance their role in business management with responsibility
for safeguarding the financial interests of the public.

An actuary is a business professional who analyses the financial consequences of

risk like analysing the past, modelling the future, Asses sing the risks involved. It
also uses mathematics and statistics to asses risk and determine premiums. An
actuary is a statutory requirement. It also evaluate the likelihood of future
events.it also design creative ways to reduce undesirable events. It dec reases the
impact of undesirable events the undesirable event can be both financial and
emotional . Gathering analytical skills, business knowledge and understanding of
human behaviour to design and manage programs that control risk. Actuaries also
engaged in risk mange programs . The actuary can use similar techniques to estimate a
sufficient margin to build into the gross premium in order to cover both the insurers
expenses and a reasonable level of unanticipated claim payments.

Aside from establishing sufficient premium levels for future risks, actuaries also use their
skills to determine whether the insurers assets on hand are sufficient for the risks that the
insurer has already committed to cover. Typically this involves at least two steps. The first is
to estimate the current amount of assets necessary for the particular insurance pool. The
second is to estimate the flow of claim payments, premiums collected, expenses and other
income to assure that at each point in time the insurer has enough cash (as opposed to long-
term investments) to make the payments. Actuaries will also do a variety of other projections
of the insurers future financial situation under given circumstances. For instance, if an
insurer is considering offering a new kind of policy, the actuary will project potential profit or
loss. The actuary will also use projections to assess potential difficulties before they become
significant. These are some of the common actuarial projects done for businesses facing risk.
In addition, actuaries are involved in the design of new financial products, company
management and strategic planning
 Main Activities of Actuary in insurance

1. Product Pricing
2. Product Design
3. Financial management
4. Corporate planning

1. Product pricing: An actuary who not only specialises in pricing insurance

products, but also in charge of everything that falls under the umbrella of product
development stage. Pricing process is just one of many components, albeit an
essential one. Other components are underwriting, marketing, distribution
channels, risk management, compliance, actuarial, and even legal. One of the key
attributes of an actuary is to recognise the technical knowledge of other experts
possess in their relevant fields. The actuary may not be an expert of legal matters,
but the ability of work hand-in- hand with a lawyer to come out with the best
solution is what makes him/her unique. An actuary who specializes in pricing new
products. Also involves devising new products to meet market needs. Often used
interchangeably with Pricing actuary although one can also make a distinction if
necessary

2. Product design-In order to develop, price, and update annuity and life insurance
products actuaries follow a product development process. The process involves a
series of steps, which include coming up with a product idea, researching the idea,
designing and planning implementing, and monitoring This stage includes coming up
with the product design, develop pricing models and assumptions and set the prices
for the product. The objective in setting the price is to balance the need for the
company to make a profit and the need to be competitive with other companies Our
extensive actuarial services help insurers to better handle the complexity of estimating
financial risk in healthcare. We offer assistance with the pricing, designing, reserving
and financial reporting, claim and financial analysis, and regulatory filings An actuary
who specializes in product design. Also involves devising new products to meet
market needs. Often used interchangeably with designing actuary although one can
also make a distinction if necessary. product design is a key actuarial role is to
determine the profitability of all products issued by the insurance company. This
includes determination of premium rates, development of actuarial models to measure
profitability, conducting experience reviews, setting key pricing assumptions such as
mortality, and working closely with the product development department. Pricing
actuaries will also interact with other areas of the company, which include
underwriting, contract development, policy administration, and distribution.

3. Financial management- Financial management refers to the efficient and

effective management of money (funds) in such a manner as to accomplish the
objectives of the organization. It is the specialized function directly associated
with the top management. The significance of this function is not seen in the
'Line' but also in the capacity of 'Staff' in overall of a
company. It has been defined differently by different experts in the field. Without
actuaries, insurance providers would have no idea how to price their products,
how many individuals or businesses to insure, or what kinds of liabilities should
be covered. Actuaries are the unsung heroes of the insurance industry, which
makes them unsung heroes of the medical industry, mortgage industry, car
industry and every other industry where insurance plays a prominent role. They
are responsible for compiling and analysing statistics about risks and the
individuals who are exposed to risk. actuaries are responsible for determining the
liabilities associated with any policies issued by the insurer, also known as
reserves. This function requires the actuary to set appropriate assumptions for
valuation, develop and maintain valuation models, and ensure appropriate controls
are in place. Because insurance contract liabilities are a prominent item in the
 companys financial statements, actuaries are heavily involved in the financial
reporting function. They can also play roles in surplus management, required
capital reporting, risk management, and asset-liability management.
. 4. Corporate planning- Corporate plans are essentially business plans that
seek to make improvements and generate profits by making internal operations
more effective and productive. Many corporate plans have specific action steps
that must be taken to achieve certain objectives. These steps are clearly defined in
the corporate plan and can be used as markers to check on a periodic basis to
determine whether or not sufficient progress is being made.

4.Actuarial Control Cycle

As mentioned, actuaries are involved in many aspects of the operations of insurers. To

illustrate this fact and focus attention on some of the key areas of actuarial work, it may be
useful to consider a concept known as the actuarial control cycle.3 The actuarial control cycle
shows that, within the business environment, there are many interrelated factors that affect
the ability of an insurer to generate and maintain sufficient capital to ensure that it can meet
its obligations to policyholders. The diagram is circular because each element has an effect
on the next, and analysis of the results provides necessary input to future developments along
the entire cycle. The professionalism of the actuaries involved is an essential ingredient in the
successful operation of the cycle. Starting with risks, we will briefly examine the objectives
that are relevant to each element of the actuarial control cycle, then describe the roles that
actuaries play in helping to achieve those objectives.
1.Risks

Insurers are subject to many types of risk, not only those against which they insure
policyholders, which are called underwriting risks. Other types are credit, market, liquidity,
and operational risks. The objectives of an insurer are to understand the nature and extent of
the risks to which it is subject and to manage those risks effectively. Actuaries are often
involved in the risk assessment process. They identify the specific risks that can affect
insurers and consider the relevance of those risks to a particular insurer. They seek to
quantify the most relevant risks, and use this information to assess the potential effect of
those risks on the insurers financial situation. Actuaries also participate in managing the
risks. For example, they may determine how much risk an insurer can afford to retain on each
policy, design a reinsurance program to deal with excess amounts of risk, and negotiate the
terms of reinsurance contracts with the reinsurers. In recent years, a growing number of
companies in a wide range of businesses have appointed chief risk officers and adopted an
approach known as enterprise risk management (ERM). In the insurance business, the chief
risk officer is often an actuary.
2. Design

Actuaries often play important roles in the product design process. They assist in identifying
market needs, for example, through the analysis of sales patterns, competitors products, and
social and demographic trends. They work with others, such as marketing, underwriting, and
investment experts, on product design teams. Their work can involve assessing the feasibility
of product design features suggested by others, as well as proposing alternatives for
consideration. Actuaries are also involved in designing compensation schemes for the
intermediaries that will sell the products. The compensation schemes must be attractive to the
intermediaries, affordable, and provide incentives to promote the sale of high quality
business.

3. Pricing

There are many factors that must be considered when calculating premium rates that can be
expected to produce profits. The costs of the benefits provided by the product design must be
estimated, including not only basic claims costs but also the potential costs of any guarantees
and options provided to policyholders. Expenses must be accounted for, including
commissions, underwriting costs, other policy administration costs, and overhead costs. The
prices must reflect the rates of return that the insurer expects to earn on the investment of
premiums, as well as expectations about the willingness of the policyholders to continue
paying premiums and maintain their policies in force. Actuaries are often heavily involved in
the pricing process, particularly for long term life insurance products. They develop
assumptions for the various cost factors, taking into account the design of the product, the
insurers past experience with similar products, the experience of other insurers, and
expectations of future demographic and economic conditions. Actuaries use models to project
future cash flows from the product, solving for the premium rates that will produce the
desired profit margins. However, rarely does the actuarys job end there. The calculated
premium rates might be uncompetitive, at least for some potential policyholders, or outside of
the constraints set by regulation. In such cases, the actuary may need to adjust the premium
rates, for example, lowering them at some ages and raising them at others, or modify features
of the product design. The actuary also needs to test the sensitivity of the profit margin to
variations in the cost factors. If profitability is too sensitive to certain factors, the product
design may need to be changed or an additional premium charged for the risk involved.

4. Liabilities
The nature of the insurance business, in which premiums are collected upfront and claims
and other benefits are paid at a later date, sometimes much later, means that liabilities for
future benefits are typically the largest item in an insurers balance sheet. These liabilities are
sometimes called technical provisions.4 Most technical provisions are linked to the amounts
insured under policies, although some are simply accumulations of amounts deposited by
policyholders with the insurer. Some technical provisions relate to outstanding liabilities for
events that have already occurred, for example, if a policyholder has submitted a claim to the
insurer but the insurer has not yet made payment. Other technical provisions relate to
liabilities for which a triggering event has not yet occurred. One example of such a technical
provision is that established for unearned premiums, for example, where a policyholder has
paid an annual premium for motor vehicle insurance but part of the policy year has not yet
been completed at the date the balance sheet is calculated. Another example of such a
technical provision is that established for long-term, level premium life insurance policies,
where the premium rate is higher than the cost of claims in the early years of the policy, but
lower than the cost of claims in the later years of the policy when the policyholder is older
and more likely to die during a particular year.

5.Assets

It is not enough that an insurer establishes technical provisions in a conservative manner. The
insurer must also have sufficient and appropriate assets to back up these provisions, so that it
can meet its obligations when they come due. Insurers act in a fiduciary capacity and,
therefore, must invest in assets that are appropriate to the nature of their liabilities. Overall,
the investment portfolio should have a high level of safety, in other words, the risk of
significant deterioration in asset values should be small. There must be sufficient cash and
liquid assets to meet potential short-term needs without having to dispose of longer-term
investments during a period when market values might be depressed. The returns on invested
assets should be sufficient to meet the assumptions made in the pricing process, otherwise
profitability targets are unlikely to be achieved. Finally, if the financial statements are to
provide a reliable picture of the insurers results, it is essential that assets be valued
appropriately

6. Asset and liability management

Recognizing the importance of having an investment portfolio that is appropriate to the

nature of their obligations, a growing number of insurers have taken steps to actively manage
the relationship between assets and liabilities on an ongoing basis. The main objective of
asset and liability management (ALM) is to reduce the risk to an insurer that exists if assets
and liabilities are mismatched, for example, if a change in market conditions might cause an
increase in the value of liabilities while also causing a decrease in the value of assets. On a
more positive note, ALM can help an insurer to invest its assets more effectively and generate
higher profits. Most insurers that practice ALM have established committees to oversee this
activity. Actuaries participate in the ALM committee together with investment managers,
product line managers, and financial officers. Actuaries are often responsible for modelling
the asset and liability cash flows, and assessing the effects of various risk factors on the
results. They develop techniques and measurement tools that can be used in the ALM process
to reduce the effects of these risks. For example, a basic approach to ALM involves
measuring the average duration of expected liability cash flows and investing in a portfolio of
assets that has the same average duration.

7. Experience analysis

When discussing the previous elements of the actuarial control cycle, the need for an actuary
to make assumptions about factors that will affect the future profitability of an insurer has
been mentioned several times. In setting the assumptions, it is important to have both
information about past experience with respect to each of the factors and knowledge of
changes in the environment that might result in future experience being different than that of
the past. Analysis of past experience provides information about what has happened,
including trends that might continue into the future. Experience analysis is useful not only in
setting assumptions but also in assessing how closely actual experience has corresponded
with previous assumptions. Such assessments are essential to the identification of sources of
profits and losses of an insurer. They enable an actuary to revise the assumptions used in
calculating technical provisions to reflect changing conditions, helping to ensure that the
provisions will be adequate. The information can also used to manage the business more
effectively, for example, by revising underwriting criteria to improve the quality of business,
targeting marketing efforts to more profitable products and consumers, and adjusting
premium rates to achieve profit objectives. Actuaries are often responsible for conducting
experience analyses. They develop the methods of analysis, identify and prepare the
necessary data, and perform the analyses. They interpret the results, communicate this
information to appropriate members of management, and propose actions that might be taken
in response to the information.

8. Profitability

Actuaries are involved in the analysis of profitability in several ways. They can determine the
sources of profits or losses. In some cases, actuaries calculate the present value of anticipated
future profits of the insurer, referred to as embedded value. Actuaries develop dividend and
bonus scales for participating or with-profits business, and present their recommendations to
the board of directors for approval. On a broader scale, actuaries are often involved in
developing and implementing business strategies designed to increase the profitability of an
insurer. For example, they participate in identifying other insurers that might be acquired or
with which an insurer might merge. They assist in determining the value of acquisition
candidates. If a line of business is unprofitable, actuaries can help to assess whether the
business should be run off or sold to another insurer. In such transactions, as well as
situations when an insurer is changing its form of organization from mutual to shareholder-
owned or vice versa, actuaries are often required to assess the effects of the transaction on
policyholders and provide assurance that no class of policyholders will be disadvantaged
because of the transaction.

9. Solvency

Actuaries are often involved in the assessment of solvency and management of capital. They
can calculate the minimum capital required for regulatory purposes, both currently and based
on projections of future growth in business. Actuaries use models to perform the stress tests
required by regulators and to determine economic capital. They also participate in the
formulation of strategies to make effective use of an insurers capital and to raise additional
capital, if necessary. The International Actuarial Association (IAA), founded in 1895, is a
grouping of local actuarial associations.5 It exists to encourage the growth of a global
profession, whose members will be recognized as technically competent and professionally
reliable
Actuaries are the mathematicians who devise the formulas by which insurance rates are based
and also make decisions regarding exclusions and additions to various insurance products.
Simply put: They make the recommendations to insurance companies on how to make a
profit while paying losses .Some call them the weather man of the insurance industry as they
are making predictions about the future like the weather man .An actuary must also develop
mathematical ideas and formulas so that the proper data can be assessd. The actuary must use
his/her mathematical abilities to format equations which will aid in the resolution of an issue

5. Specific Duties of an Actuary

There are a variety of specific duties which an actuary must carry out on a daily basis. The
first duty which an actuary must undertake in their job role is to review a variety of
documents. These documents relate to statistical information, insurance plans, annuity plans,
pension plans, contracts and company policies. The overall goal in reviewing these various
document is to construct guidelines for which the companies can follow with their customers
and employees.
Once the actuary has reviewed all of the pertinent documents, the individual must then
construct concise tables evidencing the results of the intense document review. The tables
will diagram the statistical evidence as well as highlight the recommended route to pursue
with regard to disbursements, premiums and retirement funds.
An additional specific duty of an actuary is to determine company policy and explain such
policy and its aspects to those who will benefit from it. The actuary may also work on the
policy so that it adequately works to benefit those affected by the policy.
An actuary may also do consulting work and help various companies with their statistical
needs and company policy construction. One who is an actuary may work for a specific
corporation or many different companies and corporations.
Actuaries may also be asked to testify as expert witnesses in various forms of litigation. Their
testimony most often relates to the lifetime earnings an individual would have seen based on
a variety of factors.
One who fulfils the role of an actuary may also have to testify before public agencies with
regard to new or revised legislation affecting the companies and corporations which it works
for. This frequently occurs when a new law is about to be passed or the company wishes a
particular piece of legislation to become law.
The actuary is also the go to individual for any questions relating to their job responsibilities
asked by the customers of the company. If the questions are best answered by the actuary,
then he/she will do so in order to present straightforward information to the public.
An actuary must also develop mathematical ideas and formulas so that the proper data can be
assessed. The actuary must use his/her mathematical abilities to format equations which will
aid in the resolution of an issue.

Duties And Obligations of an Actuary:

The duties and obligations of an actuary are:

1. Ensuring the solvency of the insurer at all times;
2. Rendering actuarial advice to the management of the insurer, in the areas of
product design and pricing, Insurance, contract wording, investments and
reinsurance;
3. Complying with the provisions of Section 64V of the Act 1938 with regard to
certification of assets ,liabilities that have been valued accordingly;
4. Complying with the provisions of section 64VA of the Act,1938 with regard
to maintenance of required solvency margin in the manner required under the
provision;
5. Drawing the attention of the management of the insurer, on matters on which
action is required to be taken to avoid any contravention of the Act 1938 or
prejudice to the interests of the policyholder;
6. Ensuring in general insurance business:
 a. That the rates are fair in respect of those contracts that are governed by
the insurers in-house tariffs , and
b. That the actuarial principles, in the determination of liabilities, have
been used in the calculation of reserves where actuarial advices is
sought by the Authority:
7. Complying with the Authoritys directions from time to time;
8. Information the authority in writing of opinion, within a reasonable time,
whether
a) The insurer has contravened the insurance Act 1938 or other related
statues
b) The contravention is of such nature that may affect significantly the
interests of the owners of policies issued by the insurer,
c) An officer of the insurer has engaged in conduct calculated to prevent
him/her from exercising his/her duties and obligations

Duties of an Actuary in Life insurance

The actuary shall perform the following duties;

1. Certify the actuarial report, abstracts and other returns;

2. Comply with the provisions of section 112 of the Act 1938 in regard to further
information required by the Authority;
3. Comply with the provisions of Section 40B of the Act 1938 in regard to basis of
premium
4. Submit the actuarial advice in the interests of the insurance industry and the
policyholders;
5. Comply with the provisions of section 112 of the Act 1938 in regard to
recommendation of interim bonus or bonuses payable by life insurer to policyholders
whose policies mature for payment by reason of death or otherwise during the
intercalation period;
 6. Certify that the reserves have been determined according to the directions of the
Authority;
7. Ensure that the policyholders reasonable expectations have been considered in the
matter of valuation of liabilities and distribution of surplus to the participating
policyholders who are entitled for a share of surplus.

6.TRAITS WHICH ALL ACTUARIES SHOULD POSSESS

There are many beneficial traits which an actuary should possess. First and foremost, an
actuary needs to possess wonderful mathematical skills. Since they will be dealing a great
deal with statistical equations and data, having such mathematical skills will help them to
excel in their job responsibilities.

Good analytical skills are another important trait which an actuary should possess as it will
help them in their job role. As they will need to analyse a variety of documents, having
analytical skills which are more than adequate will greatly benefit them in the long run.
An actuary is an individual who should possess good public speaking skills as well. In their
daily job duties, not only will they need to analyse documents and data but they will also
have to report such data results to company officials and members of the public. Therefore, in
order to best get their opinions and conclusions across in a straightforward, easy to
understand manner, good public speaking skills should be a prerequisite to taking on the role
of actuary.
Creativity is something which actuaries should possess. From time to time, they will need to
aid company officials in the drafting of company policy and make changes to the policy.
With a little bit of creativity, an actuary will be able to take the documentation and put such a
spin on it that it is formed into a proper and valid policy.
One who is an actuary should also have wonderful research skills. Since many of the
documents that they need to analyse will not just pop into their laps, it is important that
actuaries can do good research and find out what they need to know with regard to statistics
and pertinent documents in an efficient and expedient manner.
An actuary should also have good working computer skills. Since much of their work will
involve computers, it is important that the actuary not only be familiar with computers but
know how to manoeuvre around with them as well.
Comprehension skills are also a necessary component for all actuaries to possess. The actuary
is an individual who in their job role will need to analyse and interpret often-complex
documents and laws as well. If one has excellent comprehension skills they will be able to do
their job that much better.

Skill of an Actuary

1. Analytical Problem Solving Skills

Actuaries need to be analytical problem solvers as they are tasked with examining complex
data and identifying patterns and trends in order to determine which factors are responsible
for specific outcomes. After evaluating and weighing the significance of these factors,
actuaries look for ways to minimize the likelihood of undesirable outcomes or the cost of the
realization of an undesirable outcome.

2. Math and Numeracy Skills

Actuaries deal with numbers, so being able to do basic arithmetic quickly and correctly is a
definite requirement. However, the math associated with actuarial science can be more
complex. Knowledge of calculus, statistics and probability are also essential since actuaries
quantify risk and determine the probable likelihood of certain events.

3. Computer Skills

Computers and a variety of statistical modelling software are the tools of the actuary trade.
Actuaries frequently use models and tables to evaluate large amounts of data. Not only are
basic computer skills and a knowledge of Microsoft Office absolutely essential, being able to
program in a statistical programming language is also a necessity.

4. Knowledge of Business and Finance

Actuaries are often employed by businesses, financial institutions and insurance companies.
As such, they are responsible for evaluating insurance or pension plans, advising businesses
on how to limit exposure to financial risk and providing banks with expert opinions on
maximizing returns for a variety of investment products. This requires a sound understanding
of business and financial concepts.

5. Communication and Interpersonal Skills

Actuaries often collaborate with various personnel, including programmers, accountants and
senior management, which makes it imperative that they to be able to communicate and work
effectively with others. Strong oral communication skills enable actuaries to explain complex
technical and statistical details to a diverse audience while solid writing skills ensure that
findings and solutions are easily understood in memos and written reports. Actuaries also
often lead teams on a variety of projects and thus must be able to handle an assortment of
personalities.

6. Writing Skills:

Actuaries need to analyse documents and data but they will also have to report such
data results to company officials and members of the public. They must be able to
communicate clearly through the reports and memos that describe their work and
recommendations

7.Speaking skills:
 Good public speaking skills should be prerequisite to taking on the role of actuary.
Actuaries must be able to explain complex technical matters to those who lack an
actuaries background and help them understand the subject

8.problem-solving skills

Actuaries identify risk and develop ways for business to manage those risks.

8. Interpersonal skills:

Actuaries serve as leaders and members of teams, so they must be able to listen to
other peoples opinions and suggestions before reaching a conclusion

9. Research skills:

One who is actuary should also have wonderful research skills. Since many of the
documents that they need to analyse will not just pop into their lap, it is important that
actuaries can do good research and find out what they need to know with regard to
statistics and pertinent documents in an efficient and expedient manner

9. Procedure for Appointment of an Appointed Actuary

1. An insurer registered to carry on insurance business in India shall, subjected to sub-

regulation, appoint an actuary, who shall be known as the Appointed Actuary for the
purpose of the Act
2. A person shall be eligible to be appointed as an appointed actuary for an insurer ,if he
or she shall be
i. Ordinarily resident in India;
ii. A Fellow Member of the Actuarial society of India;
iii. An employee of the life insurance, in case of life insurance business;
iv. An employee of the insurer or a consulting actuary, in case of general
insurance business
v. A person who has not committed any breach of professional conduct;
 vi. a person against whom no disciplinary action by the Actuarial Society of India
or any other actuarial professional body is pending;
vii. not an appointed actuary of another insurer;
viii. A person who possess a certificate of practice issued by the Actuarial Society
of India and;
ix. not over the age of seventy years.

3. An insurer shall seek the approval of the Authority for the appointment
of appointed actuary, submitting the application in Form IRDA-AA-
4. The Authority shall, within thirty days from the date of receipt of application, either
accept or reject the same :Provided that before the rejecting the application,
the Authority shall give an opportunity of being heard to the insurer
5. If an insurer does not receive approval within thirty days of the receipt of such
application by the Authority, the insurer shall deem that the approval has
been granted by the Authority.
6. (6) An insurer, who is unable to appoint an appointed actuary in accordance with
sub-regulation (2),
s h a l l m a k e a n a p p l i c a t i o n t o t h e A u t h o r i t y i n w r i t i n g f o r relaxation
of one or more conditions mentioned in sub-regulation 2.(7)
7. The Author all, on receipt of the application referred to in sub-regulation
(6),c o m m u n i c a t e i t s d e c i s i o n t o t h e i n s u r e r w i t h i n t h i r t y d a ys o f
r e c e i p t o f s u c h application.(8)
8. The appointment of an appointed actuary shall take effect from the date
of approval by the Authority

ABSOLUTE PRIVILEGE OF APPOINTED ACTUARY.

1) An appointed actuary shall enjoy absolute privilege to make any statement,

oral or written, for the purpose of the performance of his functions as appointed
actuary. This is in addition to any other privilege conferred upon an appointed
actuary under any other Regulations.
(2) Any provision of the letter of appointment of the appointed actuary, which
restricts or prevents his duties, obligations and privileges under these regulations, shall be of
no effect.

9. CESSATION OF APPOINTMENTOF APPOINTED ACTUARY.

(1) An appointed actuary shall cease to be so, if he or she has been given notice
of withdrawal of approval by the Authority on the following grounds:

(a)that he or she ceases to be eligible in accordance with sub-regulation(2) of

regulation (3), or;

( b ) t h a t h e o r s h e h a s , i n t h e o p i n i o n o f t h e A u t h o r i t y, f a i l e d t o p e r f o r m
adequately and properly the duties and obligations of an appointed actuary under
these regulations.

(2) The Authority shall give an appointed actuary a reasonable opportunity

of being heard, if he or she has been given a notice of withdrawal of approval by it.
(3) If a person ceases to be an appointed actuary of an insurer otherwise than
ont h e g r o u n d s m e n t i o n e d i n s u b -
r e g u l a t i o n ( 1 ) , t h e i n s u r e r a n d t h e a p p o i n t e d actuary shall intimate the
Authority the reasons therefore within fifteen days of such a cessation.

10. POWERS OF APPOINTED ACTUARY:

1) An appointed actuary shall have access to all information or

documents in possession, or under control, of the insurer if such
access is necessary for the proper and effective performance of the
functions and duties of the appointed actuary.

(2) The appointed actuary may seek any information for the
p u r p o s e o f s u b - regulation (1) of this regulation from any officer or employee of
the insurer.

(3) The appointed actuary shall be entitled, --

 (a) to attend all meetings of the management including the
d i r e c t o r s o f t h e insurer;
(b) to speak and discuss on any matter, at such meeting,--
(i) that relates to the actuarial advice given to the directors;
(ii) that may affect the solvency of the insurer;
(iii) that may affect the ability of the insurer to meet the
r e a s o n a b l e expectations of policyholders; or
(iv) on which actuarial advice is necessary;

(c) to attend, -
(i) any meeting of the shareholders or the policyholders of the insurer; or
(ii) any other meeting of members of the insurer at which the insurer's
annual accounts or financial statements are to be considered or at which
any matter in connection with the appointed actuary's duties is discussed.

11. Insurance

Insurance allows individuals, businesses and other entities to protect themselves against
significant potential losses and financial hardship at a reasonably affordable rate. We say
"significant" because if the potential loss is small, then it doesn't make sense to pay a
premium to protect against the loss. After all, you would not pay a monthly premium to
protect against a $50 loss because this would not be considered a financial hardship for most.
Insurance is appropriate when you want to protect against a significant monetary loss. Take
life insurance as an example. If you are the primary breadwinner in your home, the loss of
income that your family would experience as a result of our premature death is considered a
significant loss and hardship that you should protect them against. It would be very difficult
for your family to replace your income, so the monthly premiums ensure that if you die, your
income will be replaced by the insured amount. The same principle applies to many other
forms of insurance. If the potential loss will have a detrimental effect on the person or entity,
insurance makes sense. (For more insight, see 15 Insurance Policies You Don't Need.)
Everyone that wants to protect themselves or someone else against financial hardship should
consider insurance. This may include:

Protecting family after one's death from loss of income

Ensuring debt repayment after death

Covering contingent liabilities

Protecting against the death of a key employee or person in your business

Buying out a partner or co-shareholder after his or her death

Protecting your business from business interruption and loss of income

Protecting yourself against unforeseeable health expenses

Protecting your home against theft, fire, flood and other hazards

Protecting yourself against lawsuits

Protecting yourself in the event of disability

Protecting your car against theft or losses incurred because of accidents

Need of insurance

(a) To provide Security and Safety :The Life Insurance provides security against
premature death and payment in old age to lead the comfortable life. Similarly
in general Insurance, the property can be insured against any contingency i.e.
fire, earthquake etc.

(b) To provide Peace of Mind The uncertainty due to fire, accident, death, illness, disability
in the human life, it is beyond the control of the human beings. By way of Insurance, he may
be compensated financially but not emotionally. The financial compensation provides not
only peace of mind but also motivates to work more and more.
(c) To Eliminate Dependency On the death of the breadwinner, the consequences need not
be explained. Similar to the destruction of property and goods the family would suffer a lot. It
could lead to reduction in the standard of living or begging from relatives, friends or
neighbours. The economic independence of the family is reduced. The Insurance is the only
way to assist and provider them adequate at the time of sufferings.

(d) To Encourage Savings Life Insurance provides protection and investment while general
Insurance provides only protection to the human life and property respectively. Life
Insurance provides systematic saving because once the policy is taken then the premium is to
be regularly paid otherwise the amount will be forfeited.

(e) To fulfill the needs of a person

a) Family needs

b) Old age needs

c) Re-adjustment needs

d) Special needs: Education, Marriage, health

e) The clean up needs: After death, ritual ceremonies, payment of wealth tax and income
taxes are certain requirements, which decreases the amount of funds of the family members.

(f) To Reduce the Business Losses: In business the huge amount is invested in the properties
i.e. Building and Plant and Machinery. These properties may be destroyed due to any
negligence, if it is not insured no body would like to invest a huge amount in the business and
industry. The Insurance reduced the uncertainty of business losses due to fire or accidents etc.

(g) To Identify the Key man: Key man is a particular man whose capital, expertise, energy
and dutifulness make him the most valuable asset in the business and whose absence well
reduce the income of the employer tremendously and upto that time when such employee is
not substituted. The death or disability of such valuable lives will prove a more serious loss
than that fire or any hazard. The potential loss to be suffered and the compensation to the
dependents of such employee require an adequate provision, which is met by purchasing an
adequate life policies.
(h) To Enhance the Limit: The business can obtain loan but pledging the policy as collateral
for the loan. The insured persons are getting more loan due to certainty of payment at their
death.

(i) Welfare of Employees: The welfare of the employees is the responsibility of the employer.
The employer is supposed to look after the welfare of the employees. The provisions are
being made for death, disability and old age. Though these can be insured through individual
life Insurance but an individual may not be insurable due to illness and age. But the group
policy will cover his Insurance and the premium is very low in group Insurance. The
expenditure paid on account of premium will be allowable expenditure.

Principle of Insurance

1. Principle of Utmost Good Faith: Principle of Uberrimae fidei (a Latin phrase), or in

simple english words, the Principle of Utmost Good Faith, is a very basic and first primary
principle of insurance. According to this principle, the insurance contract must be signed by
both parties (i.e insurer and insured) in an absolute good faith or belief or trust.

The person getting insured must willingly disclose and surrender to the insurer his complete
true information regarding the subject matter of insurance. The insurer's liability gets void (i.e
legally revoked or cancelled) if any facts, about the subject matter of insurance are either
omitted, hidden, falsified or presented in a wrong manner by the insured.
The principle of Uberrimae fidei applies to all types of insurance contracts.

2. Principle of Insurable Interest: The principle of insurable interest states that the person
getting insured must have insurable interest in the object of insurance. A person has an
insurable interest when the physical existence of the insured object gives him some gain but
its non-existence will give him a loss. In simple words, the insured person must suffer some
financial loss by the damage of the insured object.

For example :- The owner of a taxicab has insurable interest in the taxicab because he is
getting income from it. But, if he sells it, he will not have an insurable interest left in that
taxicab.

From above example, we can conclude that, ownership plays a very crucial role in evaluating
insurable interest. Every person has an insurable interest in his own life. A merchant has
insurable interest in his business of trading. Similarly, a creditor has insurable interest in his
debtor.

3. Principle of Indemnity: Indemnity means security, protection and compensation given

against damage, loss or injury.

According to the principle of indemnity, an insurance contract is signed only for getting
protection against unpredicted financial losses arising due to future uncertainties. Insurance
contract is not made for making profit else its sole purpose is to give compensation in case of
any damage or loss.

In an insurance contract, the amount of compensations paid is in proportion to the incurred

losses. The amount of compensations is limited to the amount assured or the actual losses,
whichever is less. The compensation must not be less or more than the actual damage.
Compensation is not paid if the specified loss does not happen due to a particular reason
during a specific time period. Thus, insurance is only for giving protection against losses and
not for making profit.

However, in case of life insurance, the principle of indemnity does not apply because the
value of human life cannot be measured in terms of money.

4. Principle of Contribution: Principle of Contribution is a corollary of the principle of

indemnity. It applies to all contracts of indemnity, if the insured has taken out more than one
policy on the same subject matter. According to this principle, the insured can claim the
compensation only to the extent of actual loss either from all insurers or from any one
insurer. If one insurer pays full compensation then that insurer can claim proportionate claim
from the other insurers. o, if the insured claims full amount of compensation from one insurer
then he cannot claim the same compensation from other insurer and make a profit. Secondly,
if one insurance company pays the full compensation then it can recover the proportionate
contribution from the other insurance company.

5. Principle of Subrogation : Subrogation means substituting one creditor for another.

Principle of Subrogation is an extension and another corollary of the principle of indemnity.

It also applies to all contracts of indemnity.

According to the principle of subrogation, when the insured is compensated for the losses due
to damage to his insured property, then the ownership right of such property shifts to the
insurer.

This principle is applicable only when the damaged property has any value after the event
causing the damage. The insurer can benefit out of subrogation rights only to the extent of the
amount he has paid to the insured as compensation.

6. Principle of Loss Minimization: According to the Principle of Loss Minimization,

insured must always try his level best to minimize the loss of his insured property, in case
of uncertain events like a fire outbreak or blast, etc. The insured must take all possible
measures and necessary steps to control and reduce the losses in such a scenario. The
insured must not neglect and behave irresponsibly during such events just because the
property is insured. Hence it is a responsibility of the insured to protect his insured
property and avoid further losses.

7.Principle of Causa Proximal (Nearest Cause): Principle of Causa Proximal(a Latin

phrase), or in simple English words, the Principle of Proximate (i.e Nearest) Cause, means
when a loss is caused by more than one causes, the proximate or the nearest or the closest
cause should be taken into consideration to decide the liability of the insurer.

The principle states that to find out whether the insurer is liable for the loss or not, the
proximate (closest) and not the remote (fares) must be looked into. However, in case of life
insurance, the principle of Causa Proximal does not apply. Whatever may be the reason of
death (whether a natural death or an unnatural death) the insurer is liable to pay the amount of
insurance.

evaluation of actuarial profession

An actuary is a business professional who analyses the financial consequences of risk.

Actuaries use mathematics, statistics and financial theory to study uncertain future events,
especially those of concern to insurance and pension programs. They evaluate the likelihood
of those events, design creative ways to reduce the likelihood and decrease the impact of
adverse events that actually do occur.

Actuaries analyse the financial costs of risk and uncertainty. They use mathematics, statistics,
and financial theory to assess the risk that an event will occur, and they help businesses and
clients develop policies that minimize the cost of that risk. Actuaries work is essential to the
insurance industry.
The actuarial profession gains a formal presence in 1848 after the Institute of Actuaries is
established in London.

In India, the Actuarial Society of India (ASI) is established in 1944 and included in the
international governing body of actuaries, the International Actuarial Association (IAA), in
1979. Traditionally, the actuarial profession was limited to the insurance sector but now, it
expands to other industries as well.

A business professional, an actuary has an innate capability to analyse the risk possibilities of
a financial activity and mitigate the involved risks. An actuary is mostly needed in the
insurance sector and pension programs where the task is to use financial theories, statistics
and mathematics to study uncertain future events.

To put it succinctly, any business necessitating management of financial risk requires the
services of actuaries. Business segments like hospitals, employee benefit departments,
investment firms, consulting firms, government departments and large corporations often hire
actuaries.

According to the USA Bureau of Labor Statistics (BLS), the actuary segment will see a 26%
growth between 2012 and 2022 which is much higher than average. As the career scope
improves, actuaries will be expected to handle the development, pricing and evaluation of
new insurance products, its risks and find ways to mitigate them.

An actuarial professional in USA earns an average annual pay of 93,680 USD (2012 data
available from BLS) and the Indian counterpart with 10+ years of experience earns an
average annual pay of 980,214 INR. Take a look at some statistics picked up
from PayScale.com.

Work profile of an Actuary

 They analyse the past modelling the future assessing the risk involved, and
communicating what the results means in financial terms
Actuaries use database software to compile information .They use advance statistics
and modelling software to forecast the cost and probability of an event.
They compile statistical data and other pertinent information for further analysis
Actuaries produce charts, tables and reports to explain their calculations
Actuaries analyse the financial costs of risk and uncertainty by using mathematical,
statistical and financial tools to develop policies that minimize the cost of that risk.
They also address financial questions , including those involving the \1 level of
pension contributions required to produce a certain retirement income level or how a
company should invest resources to maximize return on investment in light of
potential risk
Actuaries are assemble and analyse data to estimate probabilities of an event, such as
death, sickness, injury, disability, or property loss and likely economic cost taking
place associated with them.
Actuaries are essential employees because they determine future risk, make price
decisions; and formulate investment strategies
They must ensure that the premiums are profitable, yet competitive with other
insurance companies
Actuaries add value by enabling businesses and individuals to make better informed
decisions .Actuaries apply professional rigour combined with a business oriented
approach to the decision- making process
Actuaries typically work on teams that often include managers and professionals in
other fields, such as accounting , underwriting , and finace.
Actuaries balance their role in business management with responsibility for
safeguarding the financial of the public
They have statuary roles in insurance and employee benefit valuations and to some
extent in social insurance schemes sponsored by government
Actuaries may help determine company policy and sometimes explain complex
technical matters, finding and proposals to company exectutives , government
officals, shareholders, policyholders or the public in general
Consulting actuaries provide advice to clients on a contract basis. Many consulting
actuaries audit the work of internal actuaries at insurance companies or handle
 actuarial duties for insurance companies that are not large enough to keep their own
actuaries on staff.
Some actuaries help companies develop broad polices and strategies that assess risk
across all areas of business, a practice known as enterpriser risk management. They
also may help companies develop plans to enter new lines of business by forecasting
demand in competitive settings

Actuaries in insurance industry typically specialize in a specific field of insurance,

such as one of the following
1) Life Insurance Actuaries: The work involves analysing the life expectancy of a
person based on high risk factors like current age, health status and gender. Based on
this analysis, insurance programs are developed for individuals and groups.

2) Health Insurance Actuaries: The work involves analysing the life expectancy of a person
solely based on the persons current medical health, past health records, genetic history,
occupation and geographic location. All these factors determine the expected cost of a
promised health policy and cost of the organisation for policy adherence towards short-term
and long-term medical expenses.

3) Pension and Retirement Actuaries: The profile involves assessing and evaluating the
existing pension plans and derives future pension plans, and determines whether the company
will possess sufficient funds in future to pay off employee pensions and other retirement
benefits. Sometimes, you also need to advice individuals to best utilize their retirement
money.

4) Property and Casualty Insurance Actuaries: The work involves analysing the life
expectancy of a person against the potential of injury and/or death due to automobile accident
Actuaries assembles. Factors like driving history, gender, age and car type factor here. As an
actuary, you also have to develop insurance policies to insure people against property losses
due to untoward events and natural disasters like fires.

Education, interest, knowledge and experience will help you to choose which type of actuary
you want to become. Experienced actuaries also have the option to act as consultants for
industries other than the industry sector, provided they have excellent understanding of that
industry and its business components.

Actuary also work for

Life Insurance
Pension Fund
General Insurance
Health Insurance
Investment
Government insurance department
Academic
Insurance Companies
Re-insurance
Bank and investment firms
Collages and university
Large co-operation
Public Accounting Firm
Failure Analysis firm
Consulting firm
Sales (e.g. developing pricing strategies)
Marketing (e.g. retention analyses)
Other Actuaries (e.g. mentors, peers, students)
Underwriting (e.g. pricing large accounts)
Claims (e.g. loss reserving studies)
Risk Management (e.g. response to loss trends)
Clients / Large Insureds
Property and casualty insurance

Eligibility Criteria To become An Actuary

Anyone who have completed 8 years of age and have high aptitude in mathematics and
statistics can apply for member ship of institution of actuaries of India. However, this is most
suitable career options for those who have obtained higher degrees visa; graduate, post
graduate etc. in mathematics, statistics or econometrics. Following mentioned eligibility
criteria to join courses in actuary from institute of actuaries of India

1.should have completed 18 years of age

2. should have attained any one of the following Educational standards:
A. Passed 10+2 (H.S.C) or equivalent with at least 85% in mathematics/ statistics
B. Graduate or Post graduate with mathematical subjects. For this purpose
following subjects constitute mathematical subject
i. Mathematical or any of its branches
ii. Statistics or any of its sub classifications such as mathematical
statistics and applied statistics
iii. Econometrics, computer science, any discipline of engineering subject
in science such as physics or its branches. The admission under these
groups will however be subjected to the following conditions.

The total marks secured in the subjects coming under the classification of mathematical
subject taken together in all years of the degree course not less than 55%

The content of mathematical subject content in all the years of the course taken together is
not less than 50% of the total content. This is measured by the ratio which the maximum
marks allocated to mathematical subjects in all the years of the course bears to the total
maximum marks allotted to all the subjects included in the examination of the entire course
excluding languages

C. MBA/PGDBA or equivalent in disciplines having mathematical/statistical

content
D. Fully qualified members of following Professional/Educational specified as
under.
i. The institute of Chartered Accountants of India(ICWAI)
ii. The institute of cost and works accountant (ICWAI)
iii. The Insurance Institute of India (III) passing with subjects 81-
Mathematical Basis of Insurance and 82-Statistics full qualification
would mean completion of all required examination leading to
 designation based on such full qualification such as ICA in case of
Institute of Chartered Accountant of India in case of insurance
institute of India it would however mean all plus pass in subject 81-
mathematical basic of life insurance and / or 82-statistics
E. A student member of following actuarial bodies
i. Institute of Actuaries
ii. Faculty of actuaries,
iii. Institute of Actuaries
F. A student of following actuarial bodies provided at list one subject has been
passed from this bodies
i. Society of Actuaries
ii. Casualty of Actuarial Society

Training And Other Qualification

Actuaries need a strong background in mathematics, statistics and general business. They
generally have a bachelors degree and are required to pass a series of exams in order to
become certified professionals.

Education and training

Actuaries need a strong foundation in mathematics and general business. Usually, actuaries
earn an undergraduate degree in mathematics ,statistics or actuarial science, or a business.
While in college, students should complete coursework in economics, applied statistics, and
corporate finance, which is a requirement for professional certification. Further more,many
students obtain internships to gain experience in the professional prior to graduation More
than 100 colleges and universities offer an actuarial science program, and most offer a degree
in mathematics, statistics, economics, or finance

Increasingly, companies are requiring potential employees to have passed the initial actuarial
exam described in the next section, which tests an individuals proficiency in mathematics-
including calculus, probability, and statistics before being hired.

Beginning actuaries often rotate among different jobs in an organization , such as marketing,
underwriting, financial reporting and product development, to learn various actuarial
operations and phases of insurance work. At first, they prepare data for actuarial projects or
perform other simple tasks. As they gain experience, actuaries may supervise clerks, prepare
correspondence, draft reports, and conduct research. They may move from one company to
another early in their careers as they advance to higher position.

Other Qualifications:

Actuaries should have strong computer skills, and be able to develop and use spreadsheet and
data bases as well as standard statistical and analysis software knowledge of programming
languages such as visual basic for application, SAS ,or SQL, is also useful. Companies
increasingly prefer well- rounded individuals who , in additions to having acquired a strong
technical background, have some training in business and possess strong communication
skills good interpersonal skills also are important particularly for consulting actuaries
To perform their duties effectively actuaries must keep up with current economic and social
trends and legislation as well as development in health business and finance that could affect
insurance or investnment practices

Actuarial Society of India:

The actuarial society of India was establish in 1944 to provide a central organization for
members of the actuarial profession in India for the purpose of Elevating the attainment and
status as also promoting the general efficiency of all who are engaged in the pursuits of an
actuary .It is the Indian counter part of institute of actuaries London . the Science essentially
deal with calculation of insurance risk and premiums. It is built on the statistical evaluations
of the financial economic and other implications of future contingent events

Actuaries are the backbone of the Insurance and pension industry they apply mathematical
statistical and economic analyses to a wide range of practical problems in insurance
investment financial planning and management. In short, they are disciplined problem-solvers
.A creative aspect of the work of actuaries of forecasting of future contingent events
Actuaries are often called upon to make decision concerned with financial soundness of
insurance companies and pension funds. Actuaries by virtue of their analytical and incisive
outlook can make significant contribution in the fields like Demography, social welfare ,etc.
An actuary can be the cerebrum centre of any financial sector

The ASI was initially started has a non-examining body when actuaries use to get qualified
from institute of actuaries or faculty of actuaries of the united kingdom . The actuarial
profession in India saw a downward trend in the early years of nationalization of the Indian
insurance industries this led to a reduction of actuarial input in both life insurance and general
insurance management, and in significant input in other areas such as pension , insurance
regulation , and academies .The downward trend resulted in a reduction of number of student
taking actuarial exams in the last few years the actuarial of profession in India has express
tremendous growth .The ASI has grown as well with around 3000 students members joining
the society
Objectives of Actuarial Society of India

1. T o p r o v i d e a c e n t r a l O r g a n i z a t i o n f o r t h e m e m b e r s o f t h e a
c t u a r i a l profession in India for the purpose of elevating the attainment
and
statusa n d f o r p r o m o t i n g t h e g e n e r a l e f f i c i e n c y o f a l l w h o a r
e n g a g e d i n occupations connected with the pursuits of an actuary;

2. To extend and improve the data and methods of the Science which has its origin in
the application of the doctrine of probabilities to the affairs of l i f e a n d t o
consider all monetary questions involving, separately or in
combination, the mathematical doctrine of probabilities and the principles of interest;

3. To plan, promote and provide for interaction amongst the members, to

arrange facilities for the reading of papers, the delivery of lectures, the
discussion of topics and for the acquisition and dissemination by
other means of useful information and knowledge connected
with Actuarial
Science and other allied subjects with special reference to
I n d i a n conditions;

4. To promote or to conduct work or research of interest to Actuarial Science or to the

practice of the Actuary;

5. T o p r e s c r i b e s y l l a b u s o f s t u d i e s a n d h o l d e x a m i n a t i o n s i n
s u b j e c t s pertaining to principles and practice of Actuarial Science
with particular r e f e r e n c e t o I n d i a n c o n d i t i o n s , b y m e a n s o f w h i c h t
h e a t t a i n m e n t o f adequate standard can be tested and to award
certificates, diplomas and other distinctions to successful candidates;

6. To provide educational services and other facilities to those studying

for actuarial examinations;
7. To disseminate information on Actuarial Science and other allied
subjects b y u n d e r t a k i n g a n d p r o v i d i n g f o r p u b l i c a t i o n o f j o u r
n a l s , r e p o r t s , pamphlets, research papers, books and other literature;

8. To form and maintain either by itself or in collaboration with some

other Organization or organizations a library or libraries for use by members of the
Society;

9. To confer honorary awards and other distinctions;

10. To institute and award scholarships, prizes, medals and certificates;

11. T o m a i n t a i n l i a i s o n w i t h U n i v e r s i t i e s a n d o t h e r e d u c
a t i o n a l a n d professional bodies in India or abroad for the purpose of
promoting the objects of the Society;

12. To maintain contact and co-operate with other institutions in any part
of the world having objects wholly or partly similar to those of the Society
including by way of payment of subscription, enrolment as a
member t h e r e o f , a n d g e n e r a l l y i n s u c h a m a n n e r a s m a y b e
c o n d u c i v e t o t h e furtherance of the common objects as the Society may deem
necessary;

13. T o d i s c u s s a n d c o m m e n t o n t h e a c t u a r i a l a s p e c t s o f p u b l i c , s o c i a l
and economic and financial questions which from time to time
m a y b e t h e subject of public interest;

14. To consider the actuarial aspects of legislation, existing and proposed, and take such
action as is considered desirable;

15. To arrange for the compilation and publication of statistical data and
of actuarial tables based thereon;
16. To raise funds by subscription from the members of the Society and
toa c c e p t d o n a t i o n s a n d b e q u e s t s f o r a l l o r a n y o f t h e p u r p o
s e s o f t h e Society; and

Education and ethical goals of ASI

To prepare actuaries of tomorrow who are adequately qualified and competent in the
global context.
To keep the level of competence on a continuing basis for fully qualified actuaries at a
high in the global context through CPD( Continuing profession Development)and
other programmes
To serve the cause of public interest through professional code of Conduct
disciplinary Procedures
Actuary License / Certification

The Society of Actuaries (SOA) and the Casualty Actuarial Society (CAS) are the two
professional societies handling the task of granting professional status to trainee actuarial.
Both the SOA and CAS grants associate and fellowship statuses on clearing specific
examinations. Pursue SOA certification if you want to go into retirement benefits, finance,
investments, health insurance and life insurance. Pursue CAS certification if you want to go
into medical malpractice, automobile insurance, property and casualty and workers
compensation insurance.

There are five exams in SOA and seven exams in CAS. Clearing SOA and CAS will give
associate certification, ASA and ACAS respectively. Getting the ASA or ACAS certification
takes about four to six years. Each exam takes months of preparation. Another two to three
years are involved in moving from associate to fellowship status. Group and health
benefits, investments, retirement benefits, life and annuities and enterprise risk management
are SOA fellowship options; specific options dont exist for CAS.
SOA Certification
CAS Certification
How Actuary manage risk?

Risk comes in many forms. Everybody and every organization faces risk. As experts in
measuring and managing risk, we fill a significant need in our society. Our contribution to
society's psychological, physical and economic well-being is incredible. If our risk
management programs didn't exist, our economy would not be able to flourish.

To illustrate, here are just a few of the problems we solve:

We determine how much an insurance company should charge for auto insurance,
taking into account many factors such as the car that is being insured and details about
the driver.
We develop life insurance products so that parents can enjoy adventurous recreational
activities such as rock climbing while feeling secure that their children will be cared
for in the event of an accident.
We determine how much an insurance company should charge for homeowners
insurance, considering a number of factors such as where the home is located.
We determine how much an insurance company should charge businesses for the
many different types of insurance that businesses need, such as liability insurance and
business interruption insurance.
We help companies establish their retirement plans.
We assist banks in managing their assets and liabilities and develop ways to manage
financial risk.

Risk is at the heart of the problems we solve.

 Actuarial Quality Framework

This Actuarial Quality Framework is designed to support effective communication between

actuaries, their principal clients and employers such as senior management and members of
governing and review bodies, other professionals such as lawyers and accountants, end-users
and their representatives, policymakers and regulators. The Framework has been prepared
following consultation on the FRCs discussion paper, Promoting actuarial quality, issued in
May 2008. The Framework is intended to be complementary to professional and other
regulation affecting actuaries and those who rely on their work. It aims to promote the
following drivers of actuarial quality:

Methods: Reliability and usefulness of actuarial methods

Communication: Communication of actuarial information and advice
Actuaries: Technical skills of actuaries and Ethics and professionalism of
actuaries
Environment: Working environment for actuaries and Other factors outside the
control of actuaries.

The FRC hopes that the Framework will assist:

Actuaries in seeking to provide high quality actuarial work for the benefit of
users;
Direct clients and employers, as well as their representatives and advisers in
evaluating the quality of actuarial information and advice and making appropriate
decisions based on it;
All stakeholders including end-users and their representatives in evaluating the
effectiveness with which actuarial quality is being promoted and achieved on their
behalf; and
Regulators, including professional bodies in undertaking and reporting on
their regulation of actuaries and the entities they inform and advise.

The users of actuarial work potentially include all these groups, including
consumers (or end-users) who are affected by actuarial advice, such as investors,
policyholders and pension scheme members, employees and beneficiaries, and
rely on others to assess the quality of actuarial information and advice on their
behalf.
Actuaries advise and assist their clients or employers in relation to:

Customer transactions - between clients or employers and their customers, such as pricing
investments and risks, benefits and product development;

Financial management of clients or employers operations - investment strategy, risk

management, planning and analysing performance;

Reporting - to other users including regulators on aspects of the financial performance,

prospects and condition of entities; and

Ancillary matters relating to these activities such as audit, expert witness and
insolvency work, and where the main financial institution is a third party.

The Actuarial Quality Framework aims to assist:

Actuaries - in seeking to provide high quality actuarial work for the benefit of users;

Actuaries' direct clients and employers, as well as their representatives and advisers - in
evaluating the quality of actuarial information and advice and making appropriate decisions
based on it;

All stakeholders including end-users and their representatives - in evaluating the

effectiveness with which actuarial quality is being promoted and achieved on their behalf;
and

Regulators, including professional bodies - in undertaking and reporting on the regulation of

actuaries and the entities they inform and advise.
CARRER OPPORTUNITIES IN INSURANCE SECTOR

Introduction:

Insurance is a financial agreement known as policy which binds policy holder and insurere to
certain obligations. It is a protection against any hazards of life. In simple words insurance is
a contractual obligation between the policy holder who pays a premium at regular intervals
for a stipulated periods and the insurer who pays compensation in certain eventualities e.g.
fire, theft, accidents, etc. Policy holder is the one who buys insurance coverage and insurer is
the one who sells the policy. In India there are about 30 insurance companies. The major
government companies are Life Insurance Corporation of India (LIC), General Insurance
Corporation (GIC) and Postal Life Insurance. LIC deals with insurance of life, GIC and its
subsidiaries are concerned with non life aspects of insurance such as car, marine, accident,
medical and fire insurance.

India is a country of a large proportion of persons being in employable age. Adequate

prospects for employment and consistent earnings help in sustenance and utilization of the
potential of this work force for national growth. Challenges at work and incentives on
meeting them provide the environment for job satisfaction obviating frequent change of job
for better prospects. Financial sector provides ample employment opportunities because of
low levels of financial inclusion and high potential for growth in the sector. Insurance, within
the financial sector, plays a vibrant role in the economy and there are a variety of risks in day
to day life requiring insurance protection. In simple terms, insurance is a mechanism of
sharing of losses of a few by many. Though the pooling mechanism exists in the society since
ages in various forms, the modern form of insurance can be traced to Europe, starting with
marine expeditions in pursuit of business. Subsequently, the concept extended to
development of Life Insurance and other forms of property insurance. By the end of the 19th
century, health insurance emerged as a means of health care financing and is considered as a
means of social security protection both by employers and also by Governments in various
countries including India. This diversity of various classes of insurance business requires
human resources of different levels of education, technical know-how and expertise. After the
advent of financial sector reforms in 1990s, the insurance industry was opened for private
participation and foreign equity in India in early 2000. Insurance Regulatory and
Development Authority of India (IRDAI) is a statutory body formed in April, 2000 under an
Act of Parliament by Government of India to protect the interests of the policyholders and to
regulate, promote and ensure orderly growth of the insurance industry in India. At the time of
opening up of the sector, there was only Life Insurance Corporation of India offering life
insurance products; four subsidiary companies under the flagship of General Insurance
Corporation of India were offering general insurance or non-life products; and ECGC was a
specialised insurer. After allowing private sector companies into insurance sector, the
industry has so far witnessed the entry of 23 new private companies in the life segment and
22 in the non-life segment. During this period, various insurance intermediaries viz. Third
party 8 administrators, Corporate agents, brokers, micro insurance agents, web aggregators,
insurance repositories etc., have been introduced into market for servicing the insurance
sector. The sector has seen a high growth in the last decade, both in the Life and Non-life
segments and is poised for growth to reach the untapped segments because of low insurance
inclusion. As such, insurance industry is poised to provide secure employment and job
satisfaction for a large number of individuals with varying levels of educational
qualifications, knowledge and skill sets. Thus, it provides an ideal platform for employment
of the educated youth both in urban and rural areas.

With the liberation in economy, insurance industry has become one of the booming sectors.
Many private and public companies are participating in the Indian Insurance Industry which
has exceptionally increased the growth rate of this industry. Today both public and private
players are in the field of life and non-life insurance business. The major government
companies are General Insurance Corporation (GIC, Life Insurance Corporation of India
(LIC), and Postal Life Insurance. Now many major Private companies like Om Kotak
Mahindra, Birla Sun-Life, Tata AIF Life, Reliance, HDFC Standard Life-Insurance Co., Max
New York Life, Royal Sundaram, Cholamandalam, IFFCO Tokyo and Tata AIG and
multinational companies are also coming in this sector. Insurance Industry not only provides
a protective shield to the lives and assets of the nation but also offer various lucrative career
opportunities to aspirants.
Some of the career opportunities in Insurance sector in India are as follows:
In the liberalization era the Indian insurance industry has witnessed exceptional growth with
participation of both public and private sectors players. This sector not only provides a
protective shield to the lives and assets of the nation but also generate thousands of jobs and
career opportunities.

The increasing number of players in this sector has resulted in new products, better
packaging, improved customer service and most importantly, greater employment
opportunities, even for graduates.

In this sector, there will be demand for advisors, marketing specialists, customer service
representatives, human resource professionals. There are plenty of jobs in the insurance
sector today, in both the government and private sectors.

In India Insurance industry provides ample opportunities in actuarial, distribution, marketing,

underwriting and investing. Some insurance agencies also recruit independent professionals
like doctors, engineers etc. There is huge scope for insurance agents in India as they advice
individuals, companies, firms, enterprises about the policies which are beneficial for them
and sell them to provide protection against any financial loss. Graduate candidates can apply
for development officer. Apart from that there are other posts also in this field such as
stenographer, telephone operators, clerks, assistants etc which are open to graduates, school-
leavers, housewives etc.

A plain graduate is the requirement in the area of marketing and sales. Highly qualified
professionals can make their career in the area of actuarial science The actuary, basically is a
mathematician, statistician. Actuarial Society of India in Mumbai conducts these professional
examinations.
Various career options in insurance sector are:

Insurance Actuary

Actuary ship will be one of the most sought after profession in the days to come. In India
there is real dearth of actuaries and their number can be counted in hand. The requirement is
such that the insurance companies are forced to bring actuaries from outside India.

The actuary's skills in analysis and modelling of problems in finance, risk management and
product design are used extensively in the areas of insurance, pensions, investment and more
recently in wider fields such as project management, banking and health care. Within these
industries, actuaries perform a wide variety of roles such as design and pricing of product,
financial management and corporate planning.

Actuaries are invariably involved in the overall management of insurance companies and
pension, gratuity and other employee benefit funds schemes; they have statutory roles in
insurance and employee benefit valuations to some extent in social insurance schemes
sponsored by government.

Individual Agent/Advisor

Any Person after qualifying the minimum criteria laid down in the IRDA Act can become a
insurance agent/advisor. The individual agent processes business in his own name and he can
take agency for one life and one non life company. For taking an insurance agency the
candidate must directly approach the insurance company where he wishes to join.

The insurance companies will bear the cost of the training. On successful passing of the exam
the person will be awarded a certificate, on basis of which he will get the license from
insurance company to work as an agent and procure business for the company. IRDA has
issued guidelines for licensing of the insurance agents.

Work as Corporate Agent

As compared to individual agent, only companies can apply to become a corporate agent. The
Company processes business in his own name and they can take agency for one life and one
non life company. For taking Corporate agency the companies must directly approach the
insurance company where they wish to join.

The insurance companies will bear the cost of the training course. The Corporate Agent may
appoint persons for soliciting business on its behalf The person so appointed must be trained
as per IRDA norms. IRDA has issued guidelines for licensing of the Corporate insurance
agents.

Employment under Brokers

Brokers are the new set of intermediaries which have been allowed to operate in the Indian
market. A Broker can work for all the life and general insurance companies at a time. The
brokers have to maintain minimum capital as prescribed for different category and have to
follow stringent regulations.

Brokers are the representatives of the consumers. In India the broking concept is limited and
is in its nascent stage. In developed countries the brokers are as big as insurance companies
and they undertake all activities from underwriting to settlement of claims. In India the
brokers has been given limited role of basically procurement of business and helping the
clients in settlement of claim.

Similar to insurance company the broker firm also have underwriting, claims, accounting,
marketing department. A person having technical knowledge in insurance field can get a job
under brokers. IRDA has issued guidelines for obtaining insurance brokers license.

Employment under TPAs

The Third Party Administrators are also a new concept in India. The TPAs acts as a link
between the insurer, consumer and the medical services provider to facilitate the consumers
in availing the insurance benefits. The TPAs have tie-ups with various hospitals and
provides cashless services i.e. the insured need not pay any money at the time of claim
and TPA directly settles the claim with Insurers and the hospitals.

A person may get a job under a TPA to administer its operations.

Act as Surveyors

Surveyors are independent professionals licenced by IRDA. As per Insurance Act all the
claims above Rs.20000/- must be surveyed by an independent professional. The Insurance
Companies on receipt of any claims appoints the surveyor to assess the loss and submit a
report quantifying the claim payable under the policy.

Any person wishing to become a surveyor must pass a exam, get training for one year under a
A or B category surveyor for one year and get himself categorized as per IRDA norms. There
are 3 categories of surveyor A,B,C. The categories are being awarded by IRDA depending
upon the experience. A surveyor can work with any number of insurance companies.

Join in any Corporate Body as Insurance Manager

The Corporate Bodies having good premium portfolio usually appoints a insurance manager
to look after insurance requirements of the company. The job of the manager is to look after
the safety measures adopted by the company, procure best possible insurance rates for the
company and ensure speedy settlement of insurance claims.

Insurance Faculty

After opening of the insurance sector IRDA prescribed norms for the training of the insurance
agents, brokers, surveyors. For meeting the huge demand a large number of training institutes
sprung up. These institutes require experienced/qualified faculty for taking classes on
insurance. The faculties are in huge demand and there is a real dearth of good faculties.

The faculties are also employed by Insurance Companies to train their advisors about
products of their company.

Valuation, Risk Inspection, Supervision jobs

For taking insurance policies the property must be valued to estimate the sum insured. This is
usually the job of underwriter but in large insurance proposals the company asks for a
valuation report. Similarly persons are required for inspection of risks.

Information Technology Industry

To meet with the IT demands of the insurance companies and the intermediaries the company
producing computer software require technical experts on insurance to help them in
developing software on insurance for insurance companies, brokers, agents, surveyors etc.

BPO Industry
The BPO industry in India is expanding in a big way in India. The Insurance companies
outside India are outsourcing their operations into India for servicing of their policyholders.
The BPO service providers require technical and experienced person having insurance
knowledge to cater to the clients need.

Insurance Consultant

With multiplicity of insurance companies, intermediaries, the demand for insurance

consultants are bound to grow. Any person or company going for insurance will be really
confused as to which company or intermediary to select. The consultants will help them to
solve the problems and assist them in settlement of insurance claims.

Bancassurance

Bancassurance refers to the process of selling of Insurance by bank. The banks undertake
distribution of insurance products through their channels in lieu of commission.

Banks have a qualified database and a loyal customer base which they can use very
effectively to sell insurance products. Banks are in a better position to advised and pursue its
customers to go for requisite insurance as per their needs. Banks will require technical
persons in insurance to handle their business.
JOB PROSPECTS & CAREER OPTIONS
Traditionally actuaries have been associated with insurance sector but in presents scenario
with the economy opening up actuaries are needed in sectors like non-
life insurance, employee benefits, health insurance, asset-
m a n a g e m e n t , reinsurance, insurance broking houses and consulting companies. The job
of an actuary involves formulating policies and calculating the premium to be charged. For
this they assemble and analyse data to estimate the probability of such eventualities as
death, sickness, injury, disability and property loss and formulate a sum which
is advantageous to the customer as well as the company .In areas where employee
benefits and retirement/ pension schemes are dealt, the a c t u a r i e s h a v e t o c a l c u l a t e
the amount of money to be paid as contribution
to p e n s i o n f u n d i n o r d e r t o g e n e r a t e a c e r t a i n i n c o m e l e v e l p o s t
r e t i r e m e n t . Actuaries in administrative positions have to explain techn
i c a l m a t t e r s t o executives, government officials, shareholders, policyholders. Actuaries
working in tandem with government/ government agencies are responsible for
designings o c i a l s e c u r i t y a n d M e d i c a r e p l a n s . M a n y o f t h e s e p r o f e
s s i o n a l s w o r k a s independent consultants providing actuarial advice to clients for a fee.
Some also provide investment advice. Actuaries have scope for career growth not
only in I n d i a b u t a l s o i n c o u n t r i e s l i k e U S A , U K , C a n a d a a n d A u s t r a l i a
w h e r e t h e y already have the necessary infrastructure and support system available

Some of the potential employers are:

Life Insurance

AMP Sanmar Life Insurance CoLtd;

2.Allianz Bajaj Life Insurance Co Ltd;

3.Birla Sun Life (Distributor Co Ltd)

;4 . A v i v a Li f e In s u r a n c e C o Lt d . ;

5.HDFC Standard Life Insurance Co Ltd.;

6.ICICI Prudential Life Insurance Co Ltd.;

7 . I N G V ys y a L i f e i n s u r a n c e C o L t d ;

8.Om Kotak Mahindra Life Insurance Co Ltd.;

9.Max New York Life Insurance Co Ltd.;

10.Met Life Insurance Co Ltd.;

11.SBI Life Insurance Co LTD;

12.TATA AIG Life Insurance Co Ltd;

13.Life Insurance Corporation of India

Non-Life Insurance

1..Bajaj Allianz;

2.HDFC Chubb GIC ltd;

3.IC IC I Lombard General Insurance Co Ltd;

4.IFFCO-TOKIO General Insurance Co Ltd.;

5.Reliance GIF;

6.oyal Sundaram GIC;

7.Cholamandalam GIC;

8 . T A T A A I G

; 9. Oriental Insurance;
CONCLUSION

The Actuarial Function combines a number of different activities which can be summarised
in the following terms: co-ordinating the calculation of technical provisions expressing
opinions on underwriting policy and reinsurance arrangements contributing to the
implementation of the risk management system making judgements based on professional
experience The Group Consultative recognises this may mean different activity for some
insurance actuaries but nothing that is outside their actuarial education and skill sets. The
Group will ensure that education is enhanced to capture the changed environment, especially
in relation to risk management. Member associations are introducing extensions to their
continuing professional development programs to reflect the scope of the Actuarial Function.
The Group has established a project team to consider the development of professional and
technical standards to assist actuaries working in the Actuarial Function, especially where
such standards are deemed appropriate but may not be included in the standards and
guidelines developed within Level 3. The Group is also working on a framework for
reporting from the Actuarial Function, to assist supervisors, companies and other
stakeholders in providing consistent reporting across member states, and on professional
standards of practice for actuaries in the different roles that they will fulfil under Solvency II.
The results of the survey show a profession ready and able to play its full part in the
implementation of the new solvency system. There are challenges ahead, not least in the
concerns that the use of actuaries may be diminished in some way by the apparent change in
role from the current position. The survey shows the extensive use at present of professional
actuarial skills in the operation of insurance undertakings and there is no reason to suspect
undertakings will need less of these skills in the new system. Indeed the opposite is the case
and the Group is confident that actuaries as individuals, associations representing actuaries at
national level, and the Group representing the associations and individual professionals at the
European level, will show by their expertise and professionalism the actuarial value added to
insurance undertakings, and by extension to the security of their policyholders.
 Bibliography& Webliography

Biliography

1. Insurance (Fund) Management: AARTHI KALYANRAMAN &

N. LAKSHMI KAVITHA
2. On the role of actuary in changing world:- John R Gordon
3. Understanding of actuary management

Webliography

www.actuariesindia.org

www.beactuary.org

www.Scribd.com

www.wikipedia.com

www.investopedia.com

www.youarticlelibary.com

www.mbaknowldge.com