While watching Gilmore Girls, I came across an interesting scene where Lorelai is introduced to an actuary by her mother. During the episode, the actuary discusses how he can predict the probability of death with great accuracy and mentions the use of actuarial models to do so. As a student of actuarial science, this scene really caught my attention. I was excited to see a television series from the 2000s that discussed actuaries, life tables, and their importance in insurance.
The history of actuarial science dates back to more than three centuries. Its origins lie in the growing interest in statistics and probability theory in the 17th century. At that time, governments and business people were interested in understanding population trends, mortality rates, and economic risk. But there existed no systematic way to measure how long people would live or how likely they were to die at a given age.
One of the earliest figures to address this problem was the English statistician John Graunt. In 1662, he studied the London “Bills of Mortality,” or records of births and deaths. Although his work may seem simple by modern standards, it was revolutionary for its time. For the first time, scholars attempted to quantitatively analyse patterns of human life and mortality using real data. Graunt’s research laid the foundation for demography, epidemiology, and ultimately actuarial science. A few decades later, the famous astronomer Edmond Halley (whom we know today best for Halley’s Comet) developed Graunt’s ideas further. In 1693, he studied the birth and death records of the city of Breslau (now Wrocław, Poland) and produced the first mortality table suitable for pricing life annuities
Halley’s contributions were not limited to collecting mortality data. He showed how to use mortality data to calculate the fair value of a life annuity. For the first time, insurance companies and financial institutions could mathematically determine how much money a person would have to pay based on their age and life expectancy. This is widely regarded as the birth of modern actuarial science. Mathematicians such as Blaise Pascal, Pierre de Fermat, and Jacob Bernoulli developed probability theory rapidly. Their work provided a mathematical basis for analysing uncertainty and transformed actuarial calculations from estimates to scientific and quantitative models.
By the 19th century, the actuarial profession had matured significantly for specialised professional bodies to emerge. The Institute of Actuaries was founded in London in 1848, and thereafter the Faculty of Actuaries was established in Scotland in 1856. These bodies formalised actuarial education, examination systems, and professional standards, and played a significant role in the development of the modern profession.
During the Industrial Revolution, the need for actuaries grew exponentially as life insurance expanded throughout Europe and North America. Actuaries became responsible for setting premiums, valuing reserves, analysing pension plans, and ensuring the financial stability of insurance companies. Their role thus expanded beyond calculating life expectancy.
Actuarial science experienced another major transformation in the 20th century. The field expanded from life insurance to health insurance, pensions, investments, banking, social security systems, and enterprise risk management. The development of computing technology made it possible to build advanced models for analysing big data and complex financial systems. In India, L. S. Vaidyanathan became the first Indian Fellow Actuary in 1926, a significant achievement for South Asia. In the following decades, actuarial education and professional institutions began to be established throughout Asia, Africa, and Latin America.
Today, actuaries work not only in insurance, but also in climate risk, healthcare financing, disaster modelling, investment management, artificial intelligence (AI), and public policy. Despite the great advances in technology, the core purpose of the profession remains the same as that envisioned by Halley in 1693: to use mathematics and statistics to understand uncertainty and help make informed decisions about the future.
Despite its long global history, actuarial science is a relatively new discipline in Nepal. Until the 2010s, Nepal had neither a formal actuarial education program nor a qualified actuary resident. In fact, formal actuarial education in Nepal only began in 2016 when the School of Mathematical Sciences of Tribhuvan University (SMSTU) launched the country’s first B.Math.Sc. (Actuarial Science) program.
Before that, Nepali insurance companies used to outsource all actuarial work to foreign consultants, and most students had never even heard of the actuarial profession. The SMSTU itself has noted that “there is a serious shortage of actuaries in the country due to a lack of actuarial education.”
A 2018 report found that there were no qualified actuaries living in Nepal and that the number of Nepali students studying in the field was very low.
A student entering SMSTU in 2016 was joining a profession that virtually did not exist in Nepal. After 2016, the situation gradually changed. The Actuarial Society of Nepal (ASN) was established in 2019 and the first actuarial graduates were produced from SMSTU in 2020. During this period, most actuarial work was being done by experts from other countries, including India. Fellow Actuary Prechhya Mathema, who trained in the UK, returned to Nepal in 2018 and became the founding president of ASN. She is widely regarded as the first fully qualified actuary to reside in Nepal.
The regulatory framework also gained momentum with the development of education and the professional community. In May 2024, the Nepal Insurance Authority (NIA) issued a landmark directive mandating the appointment of at least one actuarial analyst in every insurance company. Life insurance companies and reinsurance companies were asked to implement it immediately, while non-life and micro insurance companies were given a specific deadline. This decision is considered a significant achievement for the insurance sector in Nepal.
As of 2026, actuarial science in Nepal is still in its infancy, but it is no longer an unknown subject. SMSTU continues to produce graduates and ASN is now an Associate Member of the International Actuarial Association (IAA). Nepal currently has 37 insurance companies (14 life, 14 non-life, 2 reinsurance and 7 microinsurance), but insurance penetration remains low, with roughly 90 percent of the population lacking insurance coverage. This suggests that demand for actuaries will continue to grow as insurers develop new products, refine premium pricing, and strengthen risk management.
When Edmond Halley published his mortality tables in 1693, he probably never imagined that more than three centuries later, students in Nepal would be using the same concepts to price insurance products and assess financial risk. Actuarial science, which has a history of over 330 years worldwide, has only been in Nepal for a decade. In this short period of time, the profession has evolved from an unknown field of study to become a key pillar of regulatory requirements and the insurance industry. If current trends continue, the next decade may no longer be about introducing actuarial science to Nepal. Rather, it may be the time for Nepal to shape the future of the profession by producing world-class actuaries.
