It is boom time for actuaries as demand for them is growing, especially from insurance and outsourcing companies. It is estimated that there is a 20-25 per cent shortfall of actuaries in the country.
Among insurance companies, general and health insurers are the worst affected by the shortage. The business process outsourcing industry, particularly the niche knowledge process outsourcing companies, are the second biggest recruiters of actuaries today.
According to industry sources, more than 100 actuaries are working in BPO/KPO companies across the country, with some of the largest firms hiring up to 70 professionals. The figure is likely to go up 20 per cent in the next two years.
It is estimated that the Actuarial Society of India has just about 200 members, of which only 50-60 per cent are active, with many members past the retirement age.
Thanks to the current supply crunch, insurance companies in India who have joint ventures with foreign partners have to depend on the latter's actuaries or are forced to hire them from other developed countries. Indian insurance companies presently offer pay packages on par with developed markets such as the UK and the US.
A qualified actuary with around 10 years of experience would earn about Rs 85 lakh (Rs 8.5 million) annually in the UK. The salary offered in India is currently close to this level, industry sources said.
On the other hand, the number of students pursuing actuarial science has increased to 6,200 students in 2007 from 604 in 2001, but the industry still has a long way to go. The figure includes enrollments in actuarial institutes as well as various colleges and universities.
Industry sources estimate the graduation rates from actuarial institutes at 20 per cent, while it is 50-60 per cent from colleges and universities. People passing out from actuarial institutes can directly get into jobs, while those from colleges and universities have to go through practical exposure first.
D Rama, general manager, Star Health and Allied Insurance Company, concedes that demand for actuaries in the non-life and health insurance sectors is much higher than in life insurance. Just one or two actuaries in the entire country are specialised in general insurance, especially health insurance, she adds.
About the mismatch in demand and supply, she said that the industry has to create awareness about the profession. "The current demand and supply mismatch is a serious threat to the industry," Rama added.
A senior public sector company official who did not want to be quoted said the average age of an actuary in the country is around 70. Most of them are not updated on the current scenario and are reluctant to adopt new technologies.
Considering the age factor, they are also averse to retraining, he added.
G L N Sarma, chief actuary with Bharti AXA Life Insurance Company, said, "Demand for actuaries is so huge in India that we see insurance professionals from other functions evincing keen interest in this area of work."
While acknowledging the fact that many companies are bringing global actuarial expertise to India, Sarma said life insurance employees who have graduated in mathematics/statistics are now pursuing actuarial science studies. Not to mention engineers, accountants and management graduates.
Who is an actuary?
An actuary is a financial expert who applies mathematical and statistical models for assessment of financial and contingency-related risks. He also scientifically evaluates financial products in insurance, retirement and areas related to benefits and investment.
