Career Prospects and Opportunities in Insurance-Actuarial Science

Insurance is the discipline that applies mathematical and statistical methods to assess risk in the insurance and finance industries. Actuaries are experts in assessing the financial impact of tomorrow’s uncertain events. They enable financial decisions to be made with more confidence by analyzing the past, modeling the future assessing risks involved and communicating what the results mean in financial terms.

A person interested in working in the field of insurance can either work in the office in one of the areas of insurance (life, general and postal), an agent, and an insurance surveyor and can take up job in administration, development, accounts and investment. This industry has got high growth trajectory ahead. According to ASSOCHAM an unprecedented growth of over 200 % is likely to be seen in the Indian insurance business by 2009-10, in which private insurance business is expected to grow at 140% in view of aggressive marketing techniques adopted by companies as against 35-40% of state owned insurance companies growth rate. The Chamber expects the total insurance business to reach a level of Rs.2000 billion in the next two years from the current level of Rs.500 billion.

Any person with minimum 18 years of age and having a high degree of aptitude for mathematics and statistics can take up the course and become an Actuary. To pursue a Certificate course in the insurance industry, one has to pass the entrance examination conducted by the Actuarial Society of India, Mumbai. Students who have passed 10 + 2 or equivalent exams are eligible.License is needed to work in this field which can be achieved through a training Programme.

Insurance Institute of India conducts Licentiate, Associateship and Fellowship plus other training programmes for insurance services. The eligibility criterion for recruitment to both the LIC and GIC is the same. An AAO (Assistant Administrative Officer (class I officer)) must be a graduate/postgraduate in any subject with minimum of 50 percent marks, from a recognized university. The candidate”s age should be between twenty-one and twenty-eight years. AAO”s recruitment exam is an all India level exam. To be recruited as a class II officer, the candidate has to be a graduate in any discipline. Class III and class IV levels are open to graduates and school-leavers.

The job prospects and opportunities are immense since the market has not been tapped adequately. Most companies are only managing to scratch the surface. With new entrants foraying into this sector each year this is probably the only industry that will be able to offer this break-neck pace of growth in the years to come. Today the general insurance penetration in India is 0.6%of GDP as compared to approx. 4.8% in the U.S., 3.4 % in UK, 3.2 5 in south Korea and 1% in china. This clearly indicates the growth potential in the industry. Even if we were to compare the growth of other financial sectors within India, the share of life insurance as a percentage of GDP from 1.3% to 4%, mutual funds from 5.1 to 13.4% and consumer loans from 1.9 to 13% over the last decade. However, general insurance penetration as a percentage of GDP has remained almost static over the same period.

It demands high level of commitment and hard work from those who wish to climb the corporate ladder at a rapid pace. However, since the industry is prone to uncertainties and upheavals resulting from fluctuations in the financial and global market, only the best can sustain meaningful careers in this environment. Remuneration in this industry is very high but there is no fix slab. An Agent gets about 25 to 32 percent of the premium amount in the first year of the policy. In the second and third year they get about 7.5 percent and in fourth and fifth year they get about 5 percent of the premium. Moreover, remuneration of an Certified Actuary is very high, as this is one of the most rewarding jobs in sector. Here, entry level salary is expected to be somewhere around Rs. 8 lakh per annum.For the underwriters it is around Rs. 6 lakh per annum.