All that you needed to know about becoming an Actuary
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Lots of students have tons of questions regarding Actuary as a career path.  Over a period of time, we collected the most common questions and answered them here.  Hopefully, this 10-minute read should help in bettering your understanding of this unique career path.  So, here we go:

Q1) What is an Actuary:
An actuary is a business professional who deals with the financial impact of risk and uncertainty. Actuaries use mathematics, statistics, and financial theory to study uncertain future events, especially those of concern to insurance and pension programs. In essence, they quantify risks in order to minimize losses associated with uncertain undesirable events.

Q2) Does that mean Actuaries can peep into the future?
Well, yes and no. Yes, because they can calculate the likelihood of an event occurring given certain prior conditions but they surely cannot predict anything if no quantifiable past-data exists.  For example, actuaries can estimate how long before the railway track will need to be replaced or how many times a person will need to toggle a light switch before the bulb fuses.  Sound knowledge of mathematics and statistics is what helps them manage this.

Q3) Which industries do Actuaries work in?
An Actuary works as a consultant either individually or in partnership with other Actuaries in multi-disciplines like insurance, information technology, taxation, employees benefit, risk management, investment, etc. The scope of the functions and duties of an Actuary has increased considerably under the changed conditions. But what sets them apart from their counterparts in other professions is the natural mathematical, economic and statistical aptitude, awareness, and the ability to apply these to situations in the real financial world.

Q4) Who can Become an Actuary:
Consider this career path if you are someone who
- has passed Class 12 or equivalent passed, is a graduate, postgraduate, Engineer, MBA, CA, ICWA, etc with sound knowledge in Mathematics & Statistics
-  Loves logic and problem solving
-  Has an interest in the business of business

Q5) What is ACET?
The Actuarial Common Entrance Test (ACET) is an entry-level exam for students interested in pursuing a career as an actuary through the Institute of Actuaries of India (IAI). It is designed for students with a passion for mathematics and numeracy, particularly those who have completed or are about to complete their 10+2 education. Passing the ACET allows candidates to apply for student membership with the IAI, beginning their journey toward actuarial certification.

Q6) Can a student who is Grade 12 currently take the ACET?
Yes, a student pursuing their Grade 12 or equivalent also can attempt the ACET and use the score to apply for student membership of IAI after they successfully complete their Grade 12 or equivalent examination.

Q7) Which subjects are mandatory in Class 12 for applying to ACET (Actuaries Common Entrance Test)?
To apply for ACET, you could be from ANY stream.  However, it is expected that you should have sound knowledge of Mathematics and Statistics of 10+2 level.  

Q8) What is the syllabus for ACET?
1) Mathematics (10+2 level)
2) Statistics (10+2 level)
3) English
4) Data Interpretation
5) Logic

Q9) Are there any good reference books to prepare for ACET?
IAI recommends the following books for preparation:
1. TOMATO (Test Of Mathematics at Ten plus Two-level published by ISI)
2. How to Prepare for Verbal Ability and Reading Comprehension for CAT by Arun Sharma and Meenakshi Upadhyay, Mc Graw Hill
3. How to prepare for Quantitative Aptitude for the CAT Editor: Arun Sharma
4. Quantitative Aptitude for Competitive Examinations Editor: Abhijit Guha
5. The Pearson and Guide to Verbal Ability and Logical Reasoning for the CAT Editor: Nishit K. Sinha
6. Quantitative Aptitude for MBA Entrance Examinations Editor: R.S. Aggarwal
7. High School English Grammar and Composition- Wren and Martin
8. Word Power Made Easy Editor: Norman Lewis
9. Problem Solving Strategies Editor: Arthur Engel
10. Challenge and Thrill of Pre-College Mathematics by New Age International Publishers
11. Challenging Mathematical Problems with Elementary Solutions Editors: A.M. Yaglom and I.M. Yaglom
12. An Excursion in Mathematics Editors: M. R. Modak, S. A. Katre, V. V. Acharya, V. M. Sholapurkar
13. Problem Primer for the Olympiad Editors: C R Pranesachar, B J Venkatachala, C S Yogananda
14. Trishna’s Data Interpretation and Logical Reasoning for the CAT and other MBA Entrance Examinations
15. ACTED Study Material - FAC and STATS PACK

Q10) What are the steps to become an Actuary:
Step 1: One has to become a student member of an actuarial body.  IAI (Institute of Actuaries in India) is an actuarial body. ACET (Actuaries Common Entrance Test), conducted by IAI, is the entry gate for students intending to become an Actuary.  Passing this entry gate makes him/her a student member.  ACET is conducted two times each year (occasionally three times).
Step 2:  The student then needs to pass examinations to earn an actuarial designation.  The examinations are based on a set of curriculum developed by the IAI.

Q11) What are the courses that I need to complete once I qualify for ACET and become a student member at IAI?
The IAI modified its curriculum in late 2019 to bring more uniformity and align it with the Education Standards across all Actuarial Bodies.
As per the revised curriculum, there are 4 Qualification components in the pathway of becoming an Actuary. And Memberships have been defined based on the Qualification Components completed.

Each Qualification Component consists of multiple modules.  
And each module is made up of one or more examinations.

There are 4 Qualification Components:
1. Core Principles
2. Core Practices
3. Specialist Principles
4. Specialist Advanced

Qualification Component 1: Core Principles
Modules: Actuarial Statistics(CS) - 2 papers, Actuarial Mathematics (CM)- 2 papers, Business (CB) - 3 papers
Papers/Subjects under CS: Actuarial Statistics (CS1), Risk Modelling and Survival Analysis (CS2)
Papers/Subjects under CM Actuarial Mathematics (CM1), Financial Engineering and Loss Reserving (CM2)
Papers/Subjects under CB: Business Finance (CB1), Business Economics (CB2), Business Management (CB3)

Qualification Component 2: Core Practices
Modules: Actuarial Practice (CP1) - 2 papers, Modelling Practice (CP2) - 2 papers, Communications Practice (CP3) - 1 paper

Qualification Component 3: Specialist Principles
Modules: SP0 Alternative Specialist Principles, SP1 Health and Care Principles, SP2 Life Insurance Principles, SP4 Pensions Principles and Other Benefits, SP5 Investment & Finance Principles, SP6 Financial Derivatives Principles, SP7 General Insurance: Reserving Principles, SP8  General Insurance: Pricing Principles, SP9 Enterprise Risk Management Principles

Qualification Component 4: Specialist Advanced
Modules: SA1 Health and Care Advanced, SA2 Life Insurance Advanced, SA3 General Insurance Advanced, SA4 Pensions Advanced and Other Benefits, SA7 Investment & Finance Advanced

Depending upon the Papers cleared and Qualification Component stage that the candidate is in, he/she becomes eligible for one of the two Membership types:
Associateship: To get an Associate membership, the candidate will be required to complete the Core Principles and Core Practices components.
Fellowship:  To get a Fellowship membership: Core Principles, Core Practices, Specialist Principles-(Any two out of eight), Specialist Advanced (any one out of five)

Q12) Are these Subjects available under an on-campus program?
No.  IAI only specifies the Subject and the syllabus for each exam. The candidate has to prepare for these exams on his/her own while parallelly pursuing a regular degree program.  IAI conducts these exams which the candidate needs to clear before progressing to the next Subject and exam.

Q13) Which are some of the companies in India that hire Actuaries?
Some of the notable companies that hire Actuaries are:
Accenture, Oriental Insurance, CHUBB, Kotak Life Insurance, SBI General, Bajaj Life, AXA, AIC India, Star Union Dai-Chi Life Insurance, PwC, Milliman, Ernst & Young, March, United India Insurance Company, National Book Trust, Munich Re, GIC Re, HDFC Standard Life, etc.

Q14) Does one have to complete all the exams before applying for jobs?
Not at all. In fact, most companies consider applicants who have cleared just 3-4 papers in Core Principals to join them at an entry-level.  Further, many companies who recruit such candidates encourage them to continue taking and clearing more exams and offer them higher roles accordingly.  

Q15) Upon completing the exams/papers does one get a Degree?
Well, the candidates are expected to pursue a regular degree program while clearing individual papers of IAI and go on to get an Associate Membership or a Fellowship Membership.  The good news is that the Association of Indian Universities recognizes a Fellowship Membership attained through IAI after attaining a Bachelors degree to be equivalent to a Masters Degree program of an Indian University.  This implies that such a student can register for a Ph.D. program in any University in India.

Last updated: 21st Sept 2024

About the Author : The data has been collated by the OPASIS research team

Keywords : How to become an Actuary, Actuary, ACET exam