15 April 2016
In February 2016, Mr Derek Cribb, IFoA CEO, and Ms Caryn Chua, IFoA Representative South East Asia, visited Bangalore, India. The main purpose of their visit was to share insights about the emerging opportunities in the field of Actuarial Analytics to key stakeholders, including students, heads of Universities and employers in both actuarial and non-actuarial fields. They also wanted to introduce the IFoA’s new qualification, the Certified Actuarial Analyst (CAA) to both IFoA student members and non-members from various corporate sectors.
The actuarial profession in India.
Traditionally in India actuaries work in the fields of Insurance and Pensions, which is more or less in line with the world benchmark. However the number of Qualified and Fellow actuaries has been extremely low at around 300, which has put pressure on the actuarial profession to keep pace with the demand for actuaries in Insurance and Pensions sector, let alone the other industries. In contrast, the number of student members is quite high at around 10,000 (as per latest membership statistics of IAI). A large majority of student members from the IAI are also student members of the IFoA. Most of the student members have passed 4 to 6 actuarial papers but have not progressed any further. This is not due to incompetence but rather due to the lack of entry level employment opportunities. With regards the Insurance sector in India as an employer of actuaries, there is a great imbalance in actuarial job opportunities between entry level and fully qualified level. In reality actuarial talent is not essentially necessary for the Insurance sector, but is more relevant to other sectors such as Banking and Investments.
The need for the Certified Actuarial Analyst (CAA) in India
The IFoA introduced its new CAA qualification in 2014 and what makes the CAA unique is that anybody wanting to enter the actuarial profession can do so by completing a set of 6 exams. Not only does the CAA provide a great opportunity for students, it also enables employers to hire the right actuarial talent across different industries. While the importance of the Fellowship route undoubtedly remains unique to becoming a fully qualified actuary, the CAA provides a professional qualification to those wanting to become an Actuarial analyst. Employers benefit as they have the assurance that not only do those who achieve the CAA accreditation have unique actuarial skills in financial mathematics, statistics and actuarial modelling, but they are also regulated by the IFoA and adhere to a professional code of conduct and regulatory requirements.
The introduction of a professional qualification such as the CAA, provides a professional recognition to many actuarial students at entry level. The structure of the CAA exams enables students to quickly attain CAA status, either by completing the exams or through exemptions. The CAA also provides a unique opportunity for those interested in entering the actuarial profession, but who do not wish to become a fully qualified actuary or go to university. This opens doors for the actuarial profession beyond traditional sectors like insurance and pension. An actuarial analyst can work in banking, Investments, or as a financial analyst in non-traditional sectors like engineering, oil fields, etc. With the advent of big data analytics, actuarial analysts are a perfect fit for the role of big data analysts and eventually a data scientist with their unique actuarial skill set. The CAA provides opportunities for new employment avenues and also paves the way for the actuarial profession to progress beyond its traditional sectors.
Highlights of the IFoA visit to India
Christ University, Bangalore
Christ University is one of the most popular universities in India, and it offers a Masters in Actuarial Science. Students at Christ University pursuing MSc Actuarial Science and Undergraduates pursuing BSc (CMS - Mathematics, Statistics and Computer Science) had the opportunity to meet Derek Cribb and Caryn Chua. More than 200 students participated in an interactive session which lasted for 90 mins. The main concern of the students was employer recognition of the CAA and whether the CAA could be a step on the path to the fellowship, if they decided to take that route in future. Many of the students, who had already completed 3 or 4 papers, said they were interested in pursuing the CAA. Students from BSc (CMS) saw the CAA qualification as an interesting proposition, and felt it would increase their employability and help develop their analytical skills. Derek and Caryn also had an opportunity to meet with Dr Fr. Thomas C Mathew, Vice Chancellor, and Prof. Biju Thomas, Head of Department, Professional studies.
Compassites, Bangalore
Compassites Solutions Pvt Ltd, is an emerging software firm which focuses on developing software and solutions related to Big Data and Analytics. Derek and Caryn met with Compassites executives, Mr. Anil Nagaraj, Senior Vice President and Mr. Suneel Sastry, Vice President. Their discussion mainly focused on big data, structured and unstructured data and how to best use the data. The Compassites team explained that data scientists would prefer to work with more structured data. They also explained the different branches of data analytics; basic (data visualisation), predictive (what to expect) and prescriptive (what is the right thing for you). IBM carries out prescriptive analytics using software like R, Python, SQL, SAS. The Compassites team clearly validated the need for a qualification such as the CAA in the fields of big data analytics and business transformers. (Derek Cribb and Caryn Chua in Compassites, Bangalore on 4th Feb 2016)
Infosys Technologies Ltd.
Infosys is the 2nd largest software company in India and one of the leading BPO service providers across the globe. Derek and Caryn met with Mr. Sekar Ganesan, Associate Vice President & Portfolio Head BPO Financial Services and Insurance. Mr Ganesan heads up a team of 1,500 employees in Holland, Brazil, Czech Republic, Manila and India. Their competitors are WNS, Genpact and TCS. Mr Ganesan, who has more than 17 years professional experience and a Masters in Statistics from Indian Statistical Institute, was impressed with the CAA qualification and was very keen to enrol for the exam! As a company, Infosys supports the professional development of its employees, and Mr Ganesan expressed a commitment to support his team to pursue the CAA qualification. He also thought that there was a pressing need in IT services sector for a course like the CAA, which reflects the skills required for the sector, such as problem solving, mathematics, statistics and modelling. This was an important meeting which highlighted potential employment opportunities for CAA qualifiers in the IT services sector with focus on Big Data in Insurance.
Alliance University
Alliance University is one of the leading private Universities in Bangalore offering courses such as MBA and Engineering, and currently has around 170 MBA Finance Students. Whilst there, Derek and Caryn met Dr H.R. Badrinath, Associate Professor and Area Chair. The students of this University have a low awareness of the actuarial profession as a career and as a result, the college is keen to introduce the CAA to the students. More information on the course structure and logistics of the exams were requested, and Caryn provided the college with brochures and detailed information about the course and the logistics of the exams. The college is committed to following up on this information with its students.
Bishop Heber College.
Bishop Heber College, is a 50 year old institution based in Trichirapalli, Tamil Nadu, India about 400 km away from Bangalore. The college has a long history of teaching Undergraduate and Post Graduate courses in Actuarial Science. There Derek and Caryn met with Prof J A S Surendran and Prof Bakiraj from the Actuarial Science Department. They were already familiar with the IFoA exams, but were not aware of the CAA qualification. They introduced the CAA qualification to their students during their Actuarial Summit, which was held on 27 Feb 2016. I also presented a talk on the CAA and its advantages to students in Trichy during their summit.
Swiss Re
Swiss Re, a global reinsurance firm, has offices in Bangalore with around 600 employees. There Derek and Caryn met with Alok Kumar, Head Global Services Bangalore, Managing Director Global Service Operations and Amit Kalra, Head Strategic Initiatives, Senior Vice President Group Operations, Balachandra Joshi, Head Actuarial Services Life & Health Products and other senior management officials. Derek and Caryn also had the opportunity to address a group of around 50 employees across various divisions from Swiss Re. Most of the employees had taken both IAI and IFoA membership and although they were aware of the CAA, they were keen to find out more and some of the misconceptions that they had were clarified.
Some members felt that removing the “country specific” reduced rates would decrease the number of IFoA students in India, and that most exam questions were UK centric. They were informed that the exam committee is working towards making the exam papers less UK centric and that the fees had been moved from reduced rates to means tested to bring parity among students across all countries. Derek reiterated that students who could not afford the fees, even from developed countries, were now able to become eligible for reduced rates.
St Joseph’s College
Derek and Caryn met with Dr. Subhashini Muthukrishnan, Head of Department of Economics and Commerce at St Joseph’s College, Bangalore. Here they addressed a class of 30 students pursuing a masters degree in Economics. Most of the economics students were unaware of actuarial work and so were introduced to the profession and learned how the CAA could be a stepping stone to entering the world of econometrics and quantitative finance.
Financial Training Institute (FTI)
The Financial Training Institute (FTI) was formed in 2007 to teach ACCA, CA, IFRS and Excel and is an approved learning partner of ACCA. The FTI expressed interested in teaching the CAA modules and had a brief discussion with Ms Caryn Chua on the Syllabus and how this could be taken forward. The FTI have agreed to provide coaching for Module 0 of the CAA for candidates who would like to apply for the CAA examination.
Pramartha
Pramartha, an actuarial consulting and investment management firm, organised an interactive session with around 30 people from various professions, including academics who were interested in actuarial science and promoting the CAA more widely. Prof Terence D’Souza, who is a CA[WU1] by profession, shared his view that the CAA programme is particularly relevant for the current market, and he highlighted that the programme provides a good start for those wishing to pursue a career in actuarial science. He was confident that admissions would increase over the next six months. Mr Vivekanand Srikantaiah, an angel investor and educationalist shared his experience of the applicability of actuarial science in modelling for his investments across multiple start-ups, and was happy to highlight that Pramartha has been one of the pioneers in that domain. Vivekanand takes advice from Pramartha and finds the actuarial techniques were reflected in the early successes of his investments. Derek and Caryn also spoke about emerging fields for actuaries and Derek felt that more firms like Pramartha should emerge in India to tap into this new age of actuarial opportunities. (Derek Cribb and Caryn Chua with all the dignitaries in the Pramartha Interactive session)
Concluding remarks
It was a fruitful visit for the IFoA and provided them with plenty of useful feedback from various stakeholders. Overall it was felt that the CAA was a very relevant professional qualification, and one that will be pursued by many students and professionals, opening up new actuarial career opportunities. This course will enable more people to purse actuarial science and hence help in expanding the domains and horizons in which actuarial talent can nurture and grow.