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Q&A: Chinnaraja Chendur Pandian

Chinnaraja Chendur Pandian is an actuary at Nomura Services, Mumbai, India

07 JULY 2016 | BY CHINNARAJA CHENDUR PANDIAN


Chinnaraja C Pandian
I recently qualified as the first Fellow Actuary from Dharavi, Mumbai, joining an elite class of 300 actuaries in India. Dharavi featured in the Oscar-winning movie Slumdog Millionaire. It’s widely portrayed as ‘the largest slum in Asia’ but in reality it’s a vibrant, cultural place.

I am working with a quant risk team in a leading investment bank in Mumbai. I specialise in finance and investment, and working in the quantitative risk management field. I began my career in the financial markets with the National Stock Exchange of India. I found the field lively, with room to work in a wide range of exotic products, providing exposure to different valuation models and risk management methodologies. This was dynamic in terms of products compared to more traditional insurance products, and I decided to continue with it even after qualifying.

I am an active member of the Institute of Actuaries of India. Previously I was also a member of the IFoA in London.

I spend my free time with my family and daughter, watching Tamil movies.

Which actuarial fields are most dominant in India?
Life insurance is the most dominant in India. The liberalisation of the sector for private companies in 2000, and the formation of the Insurance Regulatory and Development Authority of India laid the mandate of ‘appointed actuary’ for both life and non-life sectors. This milestone led to a surge in demand for actuaries in this field. However, large parts of non-life products and premium rates have been governed by the Tariff Advisory Committee and as a result the role of actuaries in non-life was limited until 2007. The de-tariffication of non-life products in 2009 also paved the way for an increased role for actuaries.

Are you involved in any actuarial activities outside of your day job?
I contribute by writing articles about the application of statistical tools in financial markets, some published by The Actuary in London and India. I also present lectures to aspiring students and attend seminars.

Could you tell us about an interesting project you have worked on?
During my stint with the National Stock Exchange of India, I developed and launched Asia’s first volatility Index, ‘India VIX’ using Cubic Spline. Another challenging project was conceptualising and developing India’s first successful cross margining system (CROMA), reducing the margin by 75% for hedged portfolio. These projects had largely benefited the Indian capital market by way of reducing the trading cost and are a benchmark for tracking market volatility.

What are the social and economic drivers for actuarial work in your region?
The demand for financial products is driven by population growth, and the need for health and retirement products is only going to increase. Another key driver for actuarial work is the evolution of regulation.

What is the reputation of actuaries and the professional body in India?
Actuaries have a good reputation within the insurance sector in India. Demand is strong given the small pool of qualified actuaries (290 as of March, 2015). But visibility in other fields is less as many professions are unaware of the rigorousness of the course and the technical skills of actuaries. Even with the overlap of regulatory frameworks it has not created much opportunity for actuaries in banking and risk management. The professional body conducts seminars, training sessions and publishes a magazine to promote actuaries and it’s now good to see steps being taken to promote the role of the actuary in other fields. However, India, which is in a transition state, is quite far behind in recognising actuarial skills in non-traditional fields. Attracting foreign direct investment may offer actuaries opportunities in other sectors but first companies need to realise that actuaries are experts in every business situation where risks are involved, not just life insurance.

How often and in what way do you use social media as an actuary?
I frequently use LinkedIn for networking. It helps with building networks, getting updates on the regulatory changes, sharing of knowledge and ease of publishing research articles.

What were the influences that shaped your career decisions to date?
I discovered my interest in statistics and mathematics during my engineering and management studies where I outperformed in statistics papers. I am highly thankful to one of my friends, Shreya Bapat who gauged my interest in statistics during my work and introduced me to the actuarial profession.

Tell us your immediate and long-term goals.
Following my fellowship I took ST9 (Enterprise Risk Management) and am about to qualify as a Chartered Enterprise Risk Actuary (CERA) which is my short-term goal. In the long term I want to gain acumen in the field of quantitative risk management. On the social front I would love to contribute to my society, Dharavi and would aim to portray it in a positive light. While pursuing my actuarial studies, I also qualified as a financial risk manager and a professional risk manager by leveraging my actuarial skills. In this technology-driven and big-data age, learning relevant programming language gives one an upper hand in one’s profession. I am sure the actuarial profession will soon consider including a computation finance module as well.

What are the challenges, new opportunities and benefits of being qualified?
Balancing work and family life along with pursuing being an actuary was the biggest challenge. The course module was quite technical which sharpened my skill sets.

What do you say when asked, “What is an actuary”?
An actuary is an expert who professionally and ethically does the valuation and mitigation of future uncertainty using data analysis, statistics and mathematical models.

Chinnaraja Chendur Pandian is an actuary at Nomura Services, Mumbai, India