How long and how well we expect to live is a philosophical question. However, for Life Insurance Companies this is a business question. And for a few others it is a mathematical question.
Tanvi Doshi, our next pathbreaker, Life Actuary, tries to answer that question by building pricing models to calculate premium rates that ensure profitability for life insurance companies as well as help manage their reserves for future claim payments.
Tanvi tells Shyam Krishnamurthy from The Interview Portal about connecting the dots of her interest in Maths and Statistics to the Actuarial profession through a guest lecture in college.
For students, several concepts in Maths like probability have applications in real careers, Actuary being one of them. Look for your interests, skill up and connect the dots !
Tanvi, tell us about Your background?
My name is Tanvi Doshi. I was born and brought up in Mumbai. I have been good academically, a rank holder all my school and college life. Maths and Science were my favourite subjects in school. I was a basketball player, had taken coaching for Squash and Lawn Tennis too. I was good at drawing too, got a rank in Elementary and Intermediate Exam. I used to appear for IPM exams, Maths and Science Olympiads, Homibhabha exams etc. My father is a practicing Chartered Accountant and my Mother is a housewife. She has studied MSc in Microbiology. She is an ex-professor of Ramnarain Ruia College, Mumbai. My parents have always been very supportive and let me make and take important decisions regarding my career choices.
What did you do for graduation/post graduation?
I studied B.Com for my graduation. Currently I am pursuing Actuarial Science along with M.Com.
What made you choose such an offbeat, unconventional and uncommon career?
My liking for Maths and Statistics was the major influencer. There was very less awareness for this profession when I started pursuing it. I learnt most of the things about this career from the institute’s website ‘www.actuariesindia.org’. A guest lecture was conducted in my junior college where I was introduced to this profession and I developed interest in the same. Clearing the entrance exam in the first attempt boosted my confidence. Also, topping my first exam further encouraged me.
How did you plan the steps to get into the career you wanted? Or how did you make a transition to a new career? Tell us about your career path
The Institute’s website thoroughly explains the exam structure, an actuary’s job and all other important details. I started appearing for the entrance exam and the levels soon after my HSC exams. I did my first internship (duration 9 months) with HDFC Life Insurance Co Ltd when I was in my second year of graduation. I was in the Actuarial Risk Team. My role was focused on asset-liability modelling and matching (how much money to invest and where to invest so that we are able to fulfil our liabilities), quarterly risk analysis and sensitivities (eg. how will the profits change if deaths increase by 10%, interest rates decrease by 10% etc.)
Post completion of graduation till date, I am working with HDFC Life Insurance Co Ltd as Sr. Associate in the Actuarial Pricing Team.
Currently I have completed 13 levels of Actuarial Science from the Institute of Actuaries of India and the Institute and Faculty of Actuaries (UK). I will be now appearing for my final 2 levels. Of the 13 levels, I topped 6 of them conducted by the Indian Institute.
How did you get your first break?
My CV was forwarded by my dad’s client to a person he knew in HDFC Life Insurance Co Ltd.
What were the challenges? How did you address them?
Challenge 1: The course is long-lasting and considered to be one of the most difficult ones as there are 15 levels + entrance exam. Success is 99% perspiration and 1% inspiration. Hard work and persistency helped me achieve my goals.
Challenge 2: It’s a course not many people are aware of. Hence, it gets difficult to get guidance for the same. The Institute’s website explains everything in detail which helped me clear my doubts. Also, I used to contact the concerned person of the Institute for help. The contacts are mentioned on the website. I also tried finding people into the profession and talk to them.
Challenge 3: I was not sure whether I would like the syllabus and will be able to clear exams. Hence, I appeared and cleared CA entrance (CPT) too just to have one avenue open if required.
Tell us about your work? Can you explain the role of Mathematics in Actuarial analysis in life insurance?
I work for HDFC Life Insurance Co Ltd. My role is product research and development, check demand and product feasibility, price the products (eg. deciding the premium rates to be charged), solve the regulatory body – IRDAI’s queries etc.
Number crunching, data analysis, speed, punctuality, team spirit, leadership skills are the major ones required. I developed them on the job and from my parents. I love the fact that research and development and pricing helps me do innovative things.
Taking a basic example of how maths and stats get used in product pricing. Let’s say, we have to price a term product wherein the policyholder pays premiums every year to the insurer and the insurer will pay an amount called sum assured on the death of the policyholder. We will first have to predict how many policyholders will die every year and how much payment will we have to pay every year. Hence, we will be using probability here i.e. what is the probability of a person dying in 5 years or equivalently a person dying at age 35. We will accordingly determine the premium at which we will be able to meet all death benefit payments on time along with meeting our profit target and not making a loss. Probability is extensively used in cashflow projection in insurance industry.
How does your work benefit the society?
Insurance is every helpful for people to manage and mitigate risks. Eg. A person with dependants can secure his family’s life by buying an insurance on his name. The insurer pays money to his family on his death. Insurance also provides a good savings platform and comes with tax benefits, reduces burden on the state etc.
Tell us an example of a specific memorable work you did that is very close to you!
My first new product development is very close to me. I made a pricing model which helps calculate premium rates and analyse profitability based on the premium rates. We then filed the product with IRDAI for the Authority’s approval.
Your advice to students based on your experience?
Hard work is the key to success and failure is the stepping stone to success. If you fail in a level (very common in Actuarial Science), take it in an optimistic way, study properly and fight up to success. Failure is not a mistake, not working and aiming for success is a mistake.
Complete my Actuarial studies and work in the Actuarial Field.