Numbers game: The scope of an actuary in Pakistan

There is not a single tuition centre to prepare for actuarial exams.

KARACHI:

After completing his MSc in mathematics from the University of Karachi in 2010, Burhan Abro entered a profession that none of his 139 classmates thought was exciting. In fact, only a few graduates of the department of mathematics, says Abro, had any conceptual understanding of the kind of work he wanted to do. Abro had his eyes set on becoming an actuary.

Mostly concentrated in the field of insurance in Pakistan, actuaries are internationally certified professionals who apply top-notch mathematical tools to solve long-term financial problems, especially those involving risks and probabilities, and design viable financial products on the basis of their scientific forecasting expertise.

“I wanted a profession where I could put my math skills to better use,” says Abro, who is currently working for a Karachi-based pension consulting firm besides studying to become an associate of the Society of Actuaries, United States.

So what makes the actuarial profession unusual other than the fact that its practitioners must possess exceptional knowledge of mathematics?

According to industry experts, an extremely tough and painfully long course of study results in a limited number of qualified professionals who move on to work for financial institutions with large sums to invest in research, product innovation and risk minimisation. No wonder, then, actuaries make lots of money.

“It depends on how much work you’re willing to accept. Your monthly income can be in millions after four years of practice,” says Ali Zainulabidin Zahid, who works as actuarial manager at Zahid & Zahid, the oldest actuarial firm in Pakistan.

“A fresh associate can expect a minimum salary of Rs80,000 a month these days. After a few years in practice, he surely earns handsomely,” says Zahid, whose grandfather set up Pakistan’s first actuarial firm in 1961. His father and aunt are also working in the same field.

According to Faisal Mumtaz, head of policyholder services and actuarial division at State Life Insurance Corporation of Pakistan (SLICP), an actuary can easily get a job with a salary of up to a million rupees per month if he decides to join an insurance company.

Samee-ul-Hasan, a consulting actuary with Akhtar & Hasan Actuaries, says that in order to be regarded as a fully qualified actuary in Pakistan, one has to be either a fellow (FIA) of the UK Institute and Faculty of Actuaries (IFA) or a fellow (FSA) of the US Society of Actuaries (SoA). The IFA examinations are administered by the British Council in Pakistan while the SoA examinations are held by the Pakistan Society of Actuaries.

“The programme’s duration ranges from four to 10 years. The general average for the UK IFA -- and for the US SoA -- is around six to seven years,” says Hasan, who became an IFA fellow in 1963.

There are no tuition centres in Pakistan to prepare one for actuarial exams. With the minimum educational requirement of intermediate/A Level, most aspirants try to find traineeship with an insurance company or a consulting firm while pursuing professional studies on a self-study basis.

The IFA and the SoA follow different examination patterns. While one has to clear 14 papers to become part of the IFA network, the requirements to become an SoA associate include clearing “five core papers,” which are followed by three “educational experience requirements” in economics, corporate finance and statistics.

If one gets through these initial stages, the next step is clearing the Foundation of Actuarial Practice (FAP), which consists of eight separate modules. A final assessment examination, spanning over 96 hours, follows the FAP. Successful candidates become associates of the SoA. One has to take another five papers if he wants to be an SoA fellow.

As for departments of actuarial sciences established in different government and private universities of Pakistan, Abro says their degrees are of little value compared to an international certification. “Just like majoring in accounting in a regular BSc programme doesn’t make one a chartered accountant, getting a bachelor’s degree in actuarial sciences doesn’t give you the status of an actuary,” Abro said.

Industry experts say an overwhelming majority of associates and fellows from Pakistan leave the country for greener pastures. Zahid believes that the number of certified fellows and associates currently working in Pakistan is less than 40.

The Pakistan Society of Actuaries lists only five actuarial firms on its website.

“I joined SLICP in 1996 as a trainee. I became a fellow while working here. I’m heading the same department now with about 1,000 people working under me,” says Mumtaz. “My father was a professor of physics. Mathematics is in my blood.”

Published in The Express Tribune, July 4^th, 2012.