The operation of insurance companies is largely based on the degree of risk they undertake and the returns that they generate from it. Which is why, they require employing advanced analytical and statistical skills to gauge risks and returns associated with each proposal they receive. Here is where an insurance actuary comes into the picture.
An actuary is a professional who specialises in the field of analysing financial risks by implementing statistical, financial and mathematical theories. In insurance, actuaries aid in assessing risks which help companies in the estimation of premiums for their policies.
It is ideal for insurance companies to create policies that bear minimal risk and can generate stable returns. Estimating risk and return from each proposal also in turn aids in assuring policyholders that their claims will be settled.
With regards to insurance, actuarial practices involve analysing factors related to a customer’s life expectancy, construction of mortality tables that help one to have a measurement of predictability and offering insight to brokers.
Actuarial science mostly finds its application in the life insurance mortality analysis. However, they can also be applied in case of other general insurance fields like property and liability insurance.
Sometimes recommendations for the determination of premium for insurance policies made by actuaries can also have a positive impact on the behaviour of policyholders. For instance, premium payable by non-smokers for life insurance policies is often significantly lesser than that for smokers. This might push individuals to quit smoking to avail their life insurance policies at a lower premium.
As per the Appointed Actuary regulations put forth by the Insurance Regulatory and Development Authority of India, any insurer or insurance company should mandatorily appoint an actuary to manage financial risks and uncertainty of the insurance business.
To be appointed as an actuary with any insurance company, an individual has to fulfil the following criteria, as put forth under regulations:
In the case of life insurance:
In the case of general insurance:
In the case of health insurance:
Apart from these, an individual can be eligible for the position of Appointed Actuary with any insurance company if they comply with the following criteria:
Individuals satisfying the above criteria can be appointed as an actuary for insurance companies by the IRDA.
Yes, the Institute of Actuaries in India is a professional body for actuaries in India. Formed in the year 1944, the Actuarial Society of India (ASI) was converted into the body corporate of the Institute of Actuaries in India under the virtue of the Actuaries Act, 2006.
Objectives of ASI:
The Actuarial Society of India is also one of the founding members of the International Actuarial Association, which is the organisation for all actuarial bodies across the world.
To become a member of the Institute of Actuaries in India (IAI), an individual has to belong to any of the categories mentioned below:
|
Category |
Description |
|
Student |
Those admitted as a student under the institution or have enrolled for an examination conducted by the IAI. |
|
Associate |
An associate is a student member who has already cleared the Core Principal Series Test and the Core Application Tests conducted by IAI. Associate members are eligible to vote in the Council election. |
|
Fellow |
There are several sub-categories under this where members are selected in accordance with various criteria that they must comply with. The sub-categories include: a) Fellowship - For students/associates (IAI examination route). b) Fellowship - Affiliate to fellow route. c) Fellowship - MRA route. |
|
Affiliate member |
Individuals who are fellow members or hold membership which is considered an equivalent of the IAI Fellow Membership. |
Yes, actuaries are crucial for both life and general insurance companies. Few companies appoint full-time actuaries while others hire the consulting services of actuarial firms.
Actuaries are an indispensable part of any insurance company. They play a key role in determining the policies put forth by these companies.
Please try one more time!
Disclaimer: This information is added only for informative purposes and collected from different sources across the Internet. Digit Insurance is not promoting or recommending anything here. Please verify the information before making any decisions.
Continue with {{twoWheelerCtrl.lastVisitedData.lastVisitedUrl.indexOf('DigitPaymentGateway/payments')
!== -1 ? 'payment
completion': 'previous
choice'}}
{{healthCtrl.lastVisitedData.dropOffPolicyHolderData ? 'Complete your purchase': healthCtrl.lastVisitedData.lastVisitedUrl.indexOf('plans-page')
!== -1 ? 'Continue Browsing' : 'Continue with your previous choice'}}
