The term “Actuary” originates from the Latin word Actuarius, which means a record keeper or accountant. Actuarial science is essentially the mathematics of insurance. It is a discipline that applies mathematical and statistical methods to systematically observed natural events to assess risk and uncertainty. Through these principles and methodologies, the financial impact on both companies and policyholders is significantly reduced.
William Morgan, FRS, a British national born on May 23, 1750, and who passed away on May 4, 1833, was a physician, physicist, and statistician. He is widely regarded as the modern father of actuarial science. In 1774, William Morgan became the world’s first actuary when he was appointed as Actuary at the Equitable Life Assurance Society, the world’s first life insurance company. He served the institution for 56 years. During his tenure, he prepared detailed annual reports based on insurance fund calculations, risk analysis, mortality rates, and premium determination. These reports later became known in history as the first Actuarial Reports.
At that time, the concept of life insurance was relatively new. People had only a limited understanding of its importance for future financial security. However, through his wisdom, expertise, and foresight, Morgan brought revolutionary changes to insurance practices. He developed models based on age, mortality rates, interest earnings, and financial risk, which helped determine appropriate insurance premiums. These methodologies laid the foundation of modern actuarial science.
An actuary is generally a professionally qualified individual involved in insurance, pensions, and the financial industry. An actuary combines the roles of a business executive, mathematician, economist, social scientist, and investment manager. In simple terms, actuaries are problem solvers who use actuarial science to define, analyse, and solve the financial, economic, and business implications of future events.
Actuarial science is a highly respected profession. It offers both prestige and substantial financial rewards. In many cases, actuaries earn more than chartered accountants. Unfortunately, in Bangladesh, the actuarial profession has not yet developed adequately. At present, there are only two practising actuaries in the country, which is extremely low compared to other nations. Bangladesh has a total of 82 life and non-life insurance companies. In contrast, India has around 600 actuaries, Malaysia 164, and Pakistan 88.
However, in recent years, due to the expansion of the insurance sector, increased economic awareness, and direct support from the Insurance Development and Regulatory Authority (IDRA), interest in actuarial science among insurance professionals has gradually increased.
Bangladesh is facing a severe shortage of actuaries primarily because the profession is not properly valued, nor are adequate career opportunities provided. As a result, many talented students leave the country. The insurance industry cannot function effectively without actuaries. If each insurance company employed at least one actuary, the foundation of the sector would become much stronger. In developed countries, actuarial qualifications are regarded as highly prestigious and well-paid, which is why their insurance industries are globally recognised as sustainable and well-structured.
The scope of work for actuaries is extensive, including life insurance, general insurance, pensions, gratuity schemes, provident funds, scheme valuation, banking and financial services, information technology, education, and training.
Suggested measures to address the shortage of Actuaries in Bangladesh
To overcome the shortage of actuaries in the insurance sector of Bangladesh, some steps should be considered. First of all, recruiting skilled and competent manpower in the insurance sector is necessary. Secondly, encouraging the children of existing insurance professionals to pursue careers in the sector, and raising public awareness through seminars, workshops, and conferences on actuarial science and maintaining continuous communication with Bangladeshi actuaries currently residing abroad can also play a vital role in boosting the profession.
Apart from these measures, it is essential to include actuarial science in school, college, and university curricula alongside insurance studies and introduce actuarial science training programs in public and private institutions that offer insurance-related training. Furthermore, creating at least two Actuarial Trainee Officer positions in each insurance company, providing government patronage to the “Diploma in Actuarial Science” course offered by the Bangladesh Insurance Association (BIA), as well as establishing a Bangladesh Insurance Institute of Actuaries, are also crucial to upgrading the position of the profession in Bangladesh. Lastly, a steering committee comprising officials from BIA, IDRA, professional actuaries, and experienced insurance practitioners can be formed.
In conclusion, insurance plays a vital role in the country’s economic development. Therefore, for the growth of the insurance industry and for ensuring the protection of all stakeholders — officials, employees, and policyholders — actuaries are indispensable. Simply put, insurance cannot function without actuaries.
The principles and ideals of William Morgan, the father of actuarial science and the architect of future financial security systems, should guide us. His influence is reflected in every chapter of actuarial science. Through his work, humanity has learned that mathematics is not merely a game of numbers — it is a practical tool for securing the financial future of society.
Muhammad Nurul Alam Chowdhury is the managing director of South Asia Insurance Company Limited.