What is Actuarial Science? How Is It Different From Data Science? | Analytics India Magazine

Photo: Srishti Deoras

"The roots of actuarial science dates back to the time when the concept of compound interest was published by Richard Witt, and can be considered as one of the oldest professions" summarizes Srishti Deoras currently works as Sr. Content Strategist for Analytics India Magazine.

Photo: Analytics India Magazine

Used especially in underwriting the loans and in insurance earlier, actuaries have been one of the earliest users of data and generating insights from it. Though they have been there for the longest time, their demand have come up again with reports suggesting that there are now only 4% of actuaries in India compared to the roles that are available for actuaries.  

They have been preconceived to be relevant to just insurance industry (LIC, AIG etc.) and banking for long. However their work can expand to diverse industries such as banking, healthcare, pensions and benefits, asset management, capital project, investments, risks and others. They can have roles of consultants, analyst, troubleshooters, risk assessors, amongst  others in these industries.

To put it simply, an actuary specialises in evaluating financial implications of risk and uncertainty, while devising solutions to reduce chances of any future risks and occurrence of any undesirable events. Though it is a very narrow field and has a specific job destination, it is one of the best paid jobs. Numbers suggest that most of the actuaries that qualify either end up leaving India for better opportunities or doing their own business. Given the sparse number of these professionals in India, their demand is at a rise.

What are the skills required to be an actuary, how can you equip these skills?  
Being an actuary typically requires minimum of bachelor’s degree. Direct route to major in actuarial science consists of course in math, statistics, and industry related experience, however, other quantitative courses may also produce candidates for actuarial science. These majors typically include computer science, economics, mathematics, physics and statistics, humanities, English among others...

In a nutshell, some of the skills that actuaries are expected to have are: 

• Analytical problem solving skills- Since they are tasked with examining complex data and identifying trends, analytical problem solving remains a key skill that will help them  look for ways to minimize the likelihood of undesirable outcome.
• Computer skills- Computer along with a variety of statistical modelling software is required that will help them to evaluate large numbers of data. Undergoing courses in SAS, VBA may be required. They should be equipped with formulating spreadsheets, database manipulations, statistical analysis programs, programming languages etc.
• Math skills- Since they deal with numbers, being quick and correct in math skills is certainly required. Knowledge in calculus, probability, statistics and others will help.
• Understanding of business and finance- As they would find themselves being employed with insurance and financial institutions, a fair amount of understanding on how these industries work is an advantage. Good business sense will help in devising solutions for financial risk and providing expert opinion.
• Communication skills- As mentioned earlier, since actuaries connect with various personnel including programmers, accountants, and senior management, to be able to communicate effectively is the key.

Some of the colleges in India that provide exclusive courses in actuarial science are Aligarh Muslim University, Andhra University, University of Mumbai, University of Delhi, University of Madras, AMITY, amongst others. Several private institutes are also booming in the space such as IIRM Hyderabad, Chitkara University and others, providing bachelors and masters in actuarial science.  
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Source: Analytics India Magazine