Check out my courses for Actuarial Science Subjects here

When people say “actuary” they might mean a whole bunch of things — an Associate/Fellow of an actuarial society, or someone just working in an actuarial role. 


Loosely speaking, an Actuary is a professional who quantifies & manages risk, traditionally within the insurance industry. While some have ventured out into wider areas (such as qualitative finance, data science and even gaming) over 95% of actuaries today continue to work in insurance. Although most countries have no strict legal requirement for someone to work in actuarial roles, candidates who have passed some/all exams of a recognised actuarial society are preferred by companies. 

 [*Note: An Appointed Actuary (i.e. the ead of actuarial department & regulator’s representative on the insurance company’s team) needs to be a fellow of a recognised actuarial society.]



Some of the popular actuarial societies from across the globe are: Society of Actuaries (SoA); Casualty Actuary Society (CAS); Institute and Faculty of Actuaries (IFoA); Institute of Actuaries of India (IAI); and Actuarial Society of South Africa (ASSA). 




Is Actuarial Science Right For You? 



People start actuarial science for all the wrong reasons. I’d recommend avoiding this profession if you’re starting only for any of the following reasons: 




Myth One: "Actuarial Science pays hugely from Day 1" 



If you have heard that actuarial jobs will pay you hugely from Day 1 , you’ve been misled! 

Here in India, a fresher level actuarial job after graduating and passing 2 to 5 exams and completing a 3- to 6-month internship offers a salary of just ₹4-10 Lakhs p.a.; once you qualify with 3 to 4 years of experience, you make anywhere between ₹ 25 - 40 Lakhs p.a. and your pay grows 10-20% p.a. along with your experience beyond that. 

In the US, Fellow Actuaries make an average salary of $100,000.



These are very good salaries, but they come at the end of considerable hard work and experience and they’re very similar to what other professionals like data scientists make. 




Myth Two: "Actuarial Science allows you to work in finance"

A lot of finance enthusiasts start actuarial science on the pretext that they’ll work in finance.
While a small subset of actuaries have ventured into finance, over 95% still work in insurance! It is tough to break into finance as an actuary; you have a much better chance as a Chartered Accountant, a CFA or a top-tier MBA. 




There is only one right reason to pursue Actuarial Science — you are passionate about math and want to apply it to solve interesting problems for a living (more likely than not, in insurance).




How Can You Become a Qualified Actuary from IAI/IFoA?
 

In the rest of the article, I discuss how you can qualify as an Associate/Fellow of Institute of Actuaries of India (IAI) or Institute and Faculty of Actuaries (IFoA).

*Note: I will soon add an article about the SoA/CAS route as well. 

Both IFoA & IAI have a very similar path to qualification; you need to pass a total of 13 Exams as well as acquire 3 years of professional work experience to qualify as a Fellow Actuary. 


These exams are divided into 4 stages: 

Stage 1: Core Principles: which are further divided into:
Core Mathematics (CM) exams; Core Statistics (CS) exams; and Core Business (CB) exams;

Stage 2: Core Practices (CPs);

Stage 3: Specialist Principles (SPs); and 

Stage 4: Specialist Applications (SAs).

Once you pass the first 10 exams — the Core Principles and the Core Practices — and have 2 years of professional experience (*Note: this is 1 year in case of IAI) you become an Associate Actuary. 


The final 3 exams — 2 Specialist Principles and 1 Specialist Applications — are specialisation exams that depend on your area of work. 


You can also skip writing some of these exams by getting exemptions from them based on your university exams or professional qualifications. 

Find the details of IFoA exemptions here and IAI exemptions here. 



Additionally, IAI has the Actuarial Common Entrance Test or ACET, which is a very simple aptitude test. 

You can find the details of the ACET exam here.

It can take anything between 4 to 10 years to complete all of these exams, and the median time to qualification is somewhere between 6 to 7 years. 

Note that any exam you pass from IFoA provides an exemption for the corresponding IAI exam, but not the other way around. 
 

When can you start? In what order should your write exams? 

You can start at any time! Complete your exams alongside your undergraduate studies, after you graduate, or during a career transition. But the earlier you start, the easier it is to qualify because once you’re out of touch with academics and in a full-time job, the mathematically intensive exams such as CS/CM become significantly challenging. 

That said you can still do them with some effort. 

Check out this video on how to become an actuary from the Institute and Faculty of Actuaries (IFoA).

Here's the recommended order in which you should write your exams, and this is particularly important for undergraduates.


Your goal should be to pass at least all CM & CS exams alongside your undergraduate degree — this is because these are mathematical exams of an academic nature, and clearing them alongside your undergraduate degree while you’re still in touch with your curriculum would be much easier. Attempting these during the initial years of your job, can be very hectic and studying on the weekends is difficult. 



• Core Statistics 1 (CS1) covers basic and advanced statistics; 

• Core Mathematics 1 (CM1) covers basics of cashflow modelling and mathematics of life insurance;

• Core Statistics 2 (CS2) covers survival modelling, introduction to time series analysis and machine learning and basics of general insurance pricing; and

• Core Mathematics 2 (CM2) covers financial engineering and general insurance reserving.

Each of these exams has a Paper A (MS Word exam for IFoA and MCQ-based exam for IAI) and Paper B (software applications of the concepts: MS Excel for CM1/2 and R Programming for CS1/2). 

• Business Finance (CB1) is a finance & financial accounting exam; 
• Business Economics (CB2) is a Business Economics Exam;
and 
• Business Management (CB3) is a business awareness module. 



These exams don’t have any software applications portion. 



Your first actuarial exam ideally should be CS1 or CM1 — this depends on your background: if you have a background in Math, Statistics, Physics, Computer Science or any other quantitative domain, you should pick CS1; whereas if your background is in commerce, finance or business, CM1 will be a good first exam. 

Also, CM1 is almost 70% bigger than CS1, so do it only when you have ~300 hours (3-4 months of regular study time) at hand. 



Your first exam serves three purposes:


 1. To give you a feeling of the mathematical nature of the curriculum & the exam pattern. 

 2. To give you enough confidence to take your next exam.
 3. To make you eligible for your first job.   
Most companies hiring for Life Insurance roles (which is the biggest area of work for actuaries in India) consider candidates only once they have passed CM1. So, if you're already a graduate, you should start with CM1. 

The Actuarial Guy's YouTube lectures will help you get started! Check them out here for CS1 & CM1. Full courses for all CM/CS/CB subjects including all study materials, past exam questions and exam guidance are available here.   

The ideal progression is that you pass CS1, CM1, CS2 and CM2 along with the first four semesters of your college. 
If you have more bandwidth, you can take CB1 & CB2 along with your CS1 and CM2 exams respectively. If you’re feeling enthusiastic, you can also write CP2 alongside CM2 because it uses the same MS Excel modelling skills as CM2B. 


Now, if you’re pursuing a 3-Year Undergraduate degree course, alongside your fifth semester, you can wrap up any remaining CM/CS/CB exams. Then, in your sixth semester you can start studying for CP1. If you are in a 4-Year Undergraduate degree course, try to finish CP1 in college as well. 



You can write CP2, 3 in the first 6 months of your job, as these are very light exams. After this you can take up the 2 SP and 1 SA exam as per whatever area you’re working in. I’d recommend trying multiple roles before settling down for one. 

 


Romit Abhichandani 
Founder, Lead Instructor 

The Actuarial Guy