Actuarial studies seem to be the latest favourite among students as the number of enrollment with the Actuarial Society of India has soared nearly seven-fold from 200 in 1998-99 to over 1,350 in the current financial year.
This follows the increase in demand for actuaries after India threw open the insurance industry to private companies.
According to industry estimates, India requires at least 5,000 actuaries, against the existing 225-240 actuaries in the country.
This estimate takes into account the number of actuaries required not only in the insurance industry but also for the entire financial services sector.
Indeed, so dire is their need that insurance companies are going to colleges, and management institutes to pick up top engineering, mathematics and management graduates. For want of trained actuaries, insurance companies are then paying for their training and examinations.
Six months back, two students passed all the 16 subjects in the examinations conducted at the Actuarial Society of India and were picked up by Birla SunLife Insurance Company and Metlife Insurance Company. Another two passed last year and were picked up by international consulting firms.
Fifty of the 1,350 students now enrolled at the Actuarial Society of India have already been picked up by new insurance companies.
Insurance companies are also sending employees overseas for actuarial training. SBI Life Insurance Company and HDFC Standard Life, among others, have sent employees for training to Edinburg in the UK.
Actuaries have been contributing to more than the insurance profession. Worldwide, actuarial talent is used to a far greater extent in the financial services sector than in the insurance and pensions business.
Of the UK's 4,000 actuaries, insurance companies employ less than half (around 1,500). A number of actuaries are on the payrolls of the World Bank, the International Monetary Fund and many leading world stock exchanges.
While this trend has yet to catch on in India, some actuaries argue that they could make a difference to the preparation of the country's Budget.
They can help reduce the differences between the Budget estimates, the revised estimates and the actuals.
M G Diwan, former Life Insurance Corporation of India (LIC) chairman and a leading actuary: "The chances of these figures being nearer the truth are greater if actuarial talent is used."
The Harshad Mehta scam might never have taken place had regulators appointed actuaries. While they may not necessarily have the third eye, actuaries can, using mathematical models, identify and calculate what essential performance indicators ought to be tracked on a daily basis. This would help avoid scams.
Actuaries are basically experts in the area of risk management and are best placed to decipher the level of risk-based on mathematical models.
Their expertise lies in pricing future uncertainties -- be it risks covers, stock prices, exchange values or even the level of inventory required. This is as opposed to an economist, who uses a judgmental approach in his forecast.
Actuaries through their interpretation of data can identify what optimal level of inventory a company has to maintain.
"All institutions associated with finance, whether it is the RBI, the Securities and Exchange Board of India, mutual funds, ICICI, Industrial Development Bank of India and IFCI, can be better managed if the top management takes inputs from actuaries," said Diwan.
Diwan added: "Every financial institution was affected by the Harshad Mehta scam of 1992 with the exception of LIC."
This is despite the fact that LIC has been investing in the capital market. As a percentage its investments may seem small, but in absolute terms, considering the size of its funds, its investments are sizeable, he added.
