Only 2% of enrolled Students actually get to become an Actuary in India!

Who is an Actuary?
An actuary is a business professional who deals with the financial impact of risk and uncertainty. Actuaries provide expert assessments of financial security systems, with a focus on their complexity, their mathematics, and their mechanisms.
Actuaries mathematically evaluate the likelihood of events and quantify the contingent outcomes in order to minimize losses, both emotional and financial, associated with uncertain undesirable events. Since many events, such as death, cannot be avoided, it is helpful to take measures to minimize their financial impact when they occur.
The profession has consistently ranked as one of the most desirable in various studies over the years. In 2006, a study by U.S. News & World Report in included actuaries among the 25 Best Professions that it expects will be in great demand in the future. In 2010, a study published by job search website CareerCast ranked actuary as the #1 job in the United States.
Actuaries' insurance disciplines may be classified as life; health; pensions, annuities, and asset management; social welfare programs; property; casualty; general insurance; and reinsurance. Life, health, and pension actuaries deal with mortality risk, morbidity, and consumer choice regarding the ongoing utilization of drugs and medical services risk, and investment risk. Products prominent in their work include life insurance, annuities, pensions, mortgage and credit insurance, short and long term disability, and medical, dental, health savings accounts and long term care insurance. In addition to these risks, social insurance programs are greatly influenced by public opinion, politics, budget constraints, changing demographics and other factors such as medical technology, inflation and cost of living considerations.
Indian scenario

Institute of Actuaries of India (IAI) is a statutory body established under The Actuaries Act 2006 (35 of 2006) for regulation of profession of Actuaries in India. IAI is the parent body governing the conduct of Actuaries in India.
Who can become an Actuary in India ? Any person with minimum 18 years of age and having a high degree of aptitude for mathematics and statistics can take up this course and become an Actuary. Generally, first class graduates or postgraduates in Mathematics, Statistics or Econometrics will be in a better position than others to qualify as actuaries.
To qualify as an Actuary, a candidate has to pass all examinations in the prescribed subjects. In addition, he has to comply with other criteria such as experience requirement and attendance at a professionalism course prescribed for the purpose.
There is no fixed duration to complete the course.
The subjects for the examinations can be categorized in to three groups:
The first group Comprises of the CT (Core Technical) series- there are 9 subjects to be cleared- these involve development of theory of actuarial science and applications of mathematics and statistics to actuarial applications such as life insurance, general insurance, employee benefits, investment and other areas. An introduction to economics, financial economics and financial reporting is also included at this stage. Although most part of the course is somewhat theoretical, the exercise and the question in the examination are practical in nature as they reflect real life situations of the area of work to which the subject is applicable.
The second group comprises of CA (Core Application) and ST series subjects - there are 3 subjects to be cleared- CA3 subject is mean to develop skills of communication of technical aspect of the CT series subjects in simple language to non-technical persons; here again the stress in examination question is demonstration of the skills of communications in real life environment. The ST series subjects are entirely tuned to development of the practices and related principles in the respective areas of work while some part of the CT series could be learnt either through a distance education approach or through a classroom approach, the ST series subjects can be fully understood only in a practical work environment.
However, having cleared these 12 subjects, the candidate becomes an Associate ( & not a full fledged Fellow). In order to become a fully qualified Fellow Actuary, the candidate has to clear additionally 3 more subjects (out of the third group mentioned below) and also work for three years.
The third group of SA series subjects involve application of knowledge and understanding of principles as well as demonstration of skills professionalism and judgment in an essentially practical situation.

Present scenario of Actuaries in India
Key sectors requiring the services of these Actuaries are Insurance companies, reinsurance companies and consultants. In addition, the off shored actuarial agencies operating in India (presently about 30 such units in India, as informed by IAI) also engage their services. At present, there is no estimate available with IAI of the likely requirement of Fellows in India. However, a very rough requirement at the present level of Insurance and Pension operations in India is around 600 and will increase to about 1000 by 2014. It clearly implies that there is a severe shortage of Fellows in India.
It is also noticed that while 34 % of Actuaries in the World are working in the Pension Sector, the percentage is minimal in India and is practically yet to take off. Pension is an upcoming and emerging market in India and this will bring in additional demand of Actuaries in India in the coming years.
It is also noticed that a number of Associates and Fellows are working in non-actuarial assignments in India. At a time, when we are being faced with a severe shortage of Actuaries, it is paradoxical that they should work in non-actuarial activities. The reasons along with general profile of such individuals need to be examined in detail.

The enrolment of students and the status of Fellows/Associates is as under:

While the enrolment has nearly doubled from 6200 in the year 2007 to about 12000 as on June 2011, the actual number of Fellows has been 217 in 2007 and increased to 236 in 2011. It is less than 2% of the total students enrolled. And this is a cause of serious concern. If one looks at the age profile of these 236 Fellows, 73 of them are aged 65 and above (almost one third)! Even when one considers 137 Associates also, it is only 3 % of the total students enrolled. While the general feeling as gauged by interacting with IAI President and some of the council members is that most of these students don’t have the capacity to clear the exam, it doesn’t also means that only 2% are found eligible. Clearly, there’s something wrong.
The emerging issues are :
There is no entrance exam for the students to be enrolled in the Actuarial course. Along with the demand of Actuaries going up, the number of students seeking out this course has almost doubled in the last 5 years. On the other side, the students actually passing out the exams & becoming Fellows have remained stagnant. Given this scenario, it is felt that there should be an initial screening entrance examination for students seeking admission for this course especially in Mathematics, Statistics, Econometrics and familiarity with IT based mathematical models – subjects which are crucial to work as a Fellow and these are the subjects in which most of the students are not able to clear the exams.
IAI doesn’t conduct any formal classes for the students enrolled and most of the teaching is course-material based. It is felt that IAI should collaborate with (i) reputed & recognized Universities such as Delhi University; (ii) IIMs or equivalent institutes who can conduct classes in these subjects; (iii) specialised institutes dealing with quantitative courses and work out an arrangement wherein students are made to undergo classes on a payment basis so that the quantitative skills required can be honed for the students and pass percentage can be improved. Alternatively, IAI can have an arrangement with some of the Institutes (including National Insurance Academy, Pune) to be its institute to conduct a course as designed by IAI.
The Mutual Recognition Arrangement (MRA) at present exists with (i) Institute & Faculty of Actuaries, UK, and (ii) Institute of Actuaries of Australia. IAI is in touch with Casualty Actuarial Society, USA for MRA. The MRA implies that IAI & the concerned society recognise each other so that the Fellow of them can be considered at par and be employed as an actuary. In order to meet the requirement of Actuaries, it is felt that IAI should examine other Societies such as the one in South Africa, Germany & other such well recognised and reputed societies and work out MRA with them. A number of students from India are enrolled in such courses and MRA will help in increasing the pool of qualified Actuaries. However, some of the Council members informally voiced their concern regarding a very deliberate vested motive in not refining the examination process within IAI so as to favour more entrants from the existing MRAs and to enable more such MRAs.