Actuarial science, a growing sector in Sri Lanka
View(s):After 30 years of civil war, Sri Lanka is at the dawn of development and moving very fast towards the development in the Asian region. The financial sector in the country has to play a vital role in this situation and at this juncture the specialist knowledge of an Actuary in many ways is important to the country.
Who is an Actuary?
This is a question heard numerous times in the Actuarial profession in Sri Lanka, according to a media release issued by the Actuarial Association of Sri Lanka (AASL).
The Institute and Faculty of Actuaries (United Kingdom) defines an Actuary in the following manner: “Actuaries are experts in risk management. They use their mathematical skills to help measure the probability and risk of future events. This information is useful to many industries, including healthcare, pensions, insurance, banking and investments, where a single decision can have a major financial impact.”
In almost all financial decisions, there is risk involved. Risk is defined as the uncertainty of future returns on investments. Analysis of empirical data can be used in a mathematical or a statistical model to make educated guesses of these uncertainties. A financial expert is required to study the data and a mathematician or statistician would model this data. It is inevitable that there would be glitches in such a process due to lack of understanding either from the financial or the modelling side, the AASL said in explaining what this profession is all about in order to encourage more young people to study this craft and become a professional.
In order for an individual to qualify as an Actuary, they must undergo rigorous examinations that test their knowledge in Mathematics, Statistics and Finance. The purpose of this is to fully equip an Actuary with the necessary skills to study data and build models in order to make sense of risk or uncertainty.
In Sri Lanka,the majority of actuaries are found in the insurance industry.
Around the world, there are mostly students and part-qualified Actuaries within the profession and Sri Lanka is no exception. In-house actuarial departments contribute to more than just the basic statutory requirements of an insurance company; they provide input for management information, pricing models and other crucial aspects of the business. Actuarial departments play a key role in management decisions of a company.
Being an Actuary is one of the top ranked jobs in the world; Forbes magazine named it the best job in the year 2013. Actuaries work in relatively low stress environments and have a harmonious work/personal life balance and so is a very desirable profession to be in. An Actuary’s work is often intellectually stimulating and based on a variety of settings. Although the profession was once limited to the insurance industry, today more companies, globally as well as locally demand the skills of Actuaries, thus helping to maintain the a high level of demand for this profession, the association said.
How does one become an Actuary?
To become an Actuary, a passion for Mathematics, Statistics and Finance is desirable. A competent knowledge in Computer Sciences is also an added advantage given that Actuaries work with sophisticated models. A passionate desire to take up challenges and be a problem solver with a keen attention to detail defines the traits of an Actuary, the association said.
“If interested in being an Actuary, it is recommended that you obtain a good numerate degree, such as in the field of Actuarial Science, Mathematics, Statistics, Economics, Engineering, Chemistry or even Physics. Subsequently you can find a trainee position within a company and register at a professional Actuarial Body such as the Institute and Faculty of Actuaries (United Kingdom), Society of Actuaries (US), Institute of Actuaries (India), etc. While gaining experience and knowledge further examinations must be taken. The completion of these examinations along with other requirements will lead you to the position of a fully qualified Actuary. However this is not the only way to become an Actuary, for example, a student with exceptional results at Advanced Level Mathematics can join a professional actuarial body and proceed to becoming a qualified Actuary,” the association noted.
| Seminar on the future of insurance
A seminar titled “Shaping the Future of Sri Lankan Insurance Industry” – Actuary’s view on post implications on RBC regulatory requirement and splitting of insurance companies in Sri Lanka” is being organised by the Actuarial Association of Sri Lanka (AASL) and will be held on July 7 at Taj Samudra Hotel, Colombo. The seminar will focus on the two major changes faced by the insurance industry; the split of composite companies into life and general and the change in valuation strategies from rule-based capital to risk-based capital. These topics are discussed and debated widely by industry practitioners at present. More details are available from Thanuja (Project Chairperson) on actuarialassocia tionsl@gmail.com. The association was set up in October 2008 to develop and strengthen the Actuarial profession in Sri Lanka. Its current president is M. Poopalanathan. Apart from organising professional development programmes such as courses on professionalism conducted by Derek Cribb (CEO of the Institute and Faculty of Actuaries, UK), tuition programmes conducted by eminent actuaries to assist actuarial students with examinations, the AASL also organises social events such as bowling tournaments, pub quizzes, etc for members to interact and network in a relaxed environment. The AASL also works closely with local universities like the University of Colombo in order to develop the profession that will help meet the demand for Actuaries in the corporate world. |