Today I am going to share with you certain myths about actuarial science revolve that around Actuarial profession at initial level, for those who are misguided in terms of scope of profession, salary expectations, number of exams required for an entry level job, risk of over qualification, etc.
My aim is to provide a realistic picture of Actuarial Science so that students find it easier to understand the profession.
How much does an actuarial student earn?
Myth: Actuarial science is a highly paid profession and students earn handsome salaries at entry level.
Reality: No doubt, the actuarial science is a rewarding profession and students are attracted to this profession because of great pay scales. However, most students hold a false perception regarding the entry level packages of Actuaries. Although, initial salaries may not be high, however, it is rewarding when one progress with exams and gains a credible work experience.
What are the basic skills required to get an actuarial job?
Myth: Two or more papers are sufficient to get a job.
Reality: In addition to actuarial papers, it is important to have good communication skills. Nowadays, companies also look for students who possess basic software skills such as excel and VBA. Further, possessing skills like SQL, power point, R, MS Access, etc. help students stand apart in resume selection. This has become more important due to increased competition over few past years.
Which industries do Actuaries work in?
Myth: many students believe that an actuary’s work is limited to insurance industry.
Reality: In my opinion Actuaries are meant to work in any field that involve risk (What is a risk- an actuarial definition), working of statistics, analysis, modeling, prediction etc.
In Indian market, Actuaries can work in consultancies and KPOs in addition to insurance industry. However, globally Actuaries are involved in the following fields:
- Actuaries work for government in managing its programs and ensuring compliance with regulatory laws.
- Actuaries help in portfolio management and investment analysis.
- They provide merger and acquisition which add value to the business.
Are there limited opportunities available for Actuaries in India?
Myth: There are limited companies in India and those companies recruit very few Actuaries.
Reality: There is a good scope for Actuaries in Actuarial consultancy. Apart from that there are countries in Asia who have more demand for Actuaries than supply. Countries such as UK and US also hire Indian Actuaries.
Do students become overqualified on clearing more than 4 papers if they are not working in the Actuarial domain?
Myth: There is a perception that a student with more than 4 Actuarial exams is considered to be overqualified. As a consequence, they opt to sit idle and search for jobs. This hinders their learning ability.
Reality: It is not true that people are labelled “overqualified”, however, students do not get jobs beyond 4 to 5 papers because they join firms with an expectation of getting higher packages & positions due to higher number of papers compared to others in the firm. Companies find it difficult to manage expectations of such students. Students should go to companies with a motive to learn and grow. Once they start working, their increments would be on the basis of their performance.
What are the minimum numbers of exams required to secure an entry level job?
Myth: One can get job on clearing one or two exams.
Reality: generally, insurance companies in India hire in the fields of general insurance, life insurance and employee benefits. CT1 and CT3 are the required to secure an entry level job. Apart from these 2 papers, CT6 is the most sought actuarial exam in the non-life insurance industry where the students should possess a good conceptual knowledge of run-off triangles, ruin theory etc. In the life insurance industry and employee benefits, CT5 holds a great importance among all other CT subjects. Further, CT4 gives an insight on how to carry out a modelling exercise and experience and experience analysis. (Best order to do actuarial science)
So, I would advice students to have some practical knowledge of topics studied rather than just definitions. It would help to get job in the industry with some knowledge of products available in the market.