Actuary Information
What is Actuarial Science
On choosing the Actuarial track
Actuarial advising
Overview of actuarial exams and related courses
Campus course selection
General plan of study
Actuarial FAQs
Further information, including Web links
What is Actuarial
Science?
Actuarial Science is the subject at the interface
of mathematics and business relating to the valuation of risks and
Insurance.
Actuaries find employment in the Insurance industry, as professionals
and
consultants employed to certify the financial soundness of pension and
insurance plans, and in government agencies such as the Social Security
Administration, Pension Benefit Guaranty Corporation, and Department of
Housing and Urban Development.
The training of Actuaries heavily involves
mathematical undergraduate coursework, as well as a solid grounding in
business and economics. Actuarial certification, by the Society of
Actuaries
or the Casualty Actuarial Society, is accomplished through a battery
of ETS-type examinations with a prescribed syllabus, which for
the
first several examinations are primarily mathematical and
statistical.
There now exists an undergraduate minor program in
Actuarial Mathematics, available only to non-math majors,
documenting that students have
taken a package of courses covering parts of the actuarial examination
syllabi, and have prepared themselves to take several of the actuarial
exams. The minor program includes advising and assistance in searching for internships and actuarial
work
experience. The courses, advising and assistance are available now.
On choosing the Actuarial
track
The general advice to students is that
without at least a strong B in the calculus courses Math
140-141-240-241,
Actuarial Science is probably not as desirable a career as advertised
because
so much of the potential for advancement depends upon competitive
examinations
which are initially VERY quantitative. However, if you have strong
interests in business and other practical applications of mathematics,
you should at least consider continuing with the same collection of:
calculus,
Probability/Statistics, computing, numerical analysis and Operations
Research
courses, with a view toward majoring in a field such as Operations
Research
or Statistics. [Operations Research (OR) has to do with
optimal-allocation
problems in business, scheduling and inventory management, etc.;
Statistics
has to do with the analysis and description of data to explain
relationships
and forecast trends.] At College Park, both OR and Statistics can be
pursued
within the BMGT
College;
and Statistics can be chosen as a concen- tration within the Mathematics
major. For any quantitative major, you are well-advised to take the
full calculus sequence and then some probability and statistics.
Actuarial advising
Actuarial advising is offered in the Math Department
is offered through ugadvisor@math.umd.edu,
Coordinator of Undergraduate Advising. Students who are not
math majors can obtain a minor in Actuarial Mathematics.
The Mathematics Department does not currently offer
an Actuarial degree program, but does offer the Actuarial Mathematics
course
Stat 470, as well as many courses which heavily overlap the
actuarial
examination syllabi. In some cases, the courses exactly mirror the
syllabi for specific exams.
- Course P covers calculus through
multivariable
calculus (Math 140-141 and Math 241) plus one semester of linear
algebra (Math 240) plus multivariable-calculus-level probability (Stat
410). The probability part of the syllabus no longer coincides exactly
with our Stat offerings: the probability topics definitely include
joint distributions, moment generating functions, conditional
expectations, but not quite as much material as in Stat 410, and
statistics topics are not tested directly on the first exam any more.
The probability material in the union of Stat 400 and Stat 401 might be
barely enough for the Course 1 exam.
- Course FM covers Economics and Finance topics
mostly, but there is also mathematical problem-solving material on
Theory of Interest which is covered in part in Stat 470 (Actuarial
Mathematics).
- Course MLC, on Actuarial Models, contains
material on probability models and stochastic processes related to life
tables and insurance, including the calculation of insurance premiums
from life-table data. The probability material here is definitely at
the level of Stat 410, and in the current set-up there is NO purely
statistical material (like parameter estimation, hypothesis testing and
confidence intervals) on this exam. The relevant undergraduate course
offered at College Park is
470 (Actuarial Mathematics). The latter course overlaps about 50% with
the material of the Course MLC exam.
- VEE requirement - For information on this
requirement, please visit
http://www.soa.org/education/exam-req/edu-vee.aspx .
Courses P and FM would be taken by any aspiring actuary, whether
interested in Life Insurance and Pension or in Casualty/Property
Insurance. The later exams are different when administered by the
Society of Actuaries (Life/Pension) than when given by the Casualty
Actuarial Society. These later exams, in either Society, involve a good
deal of statistics, including topics in estimation, hypothesis and
goodness-of-fit testing, computational and Bayesian methods, and
survival analysis. Undergraduates should take either Stat 401 or Stat
420 to prepare for this later material. Other useful undergraduate
courses would include Numerical Analysis, Econometrics, and Operations
Research, as well as business topics in Investments, Finance, and
Accounting.
Beyond the headings above, there are some relevant
graduate courses,
but you would be unlikely to take any of them unless you were also
pursuing a graduate degree program.
If you are already graduated from college
(with at least a B average), the way to take any of these courses at
the
University is to register as either a Special Student or an Advanced
Special
Student. In either case, you need to contact the Admissions Office and
pay a one-time fee to obtain Special Student Status. The difference
between
Special Student and Advanced Special Student is that only the latter
take
courses which count for Graduate Credit (and accordingly, pay the
higher tuition fees for graduate courses). The courses which you would
take toward actuarial exams are undergraduate courses, but many would
count
— here or elsewhere — toward related graduate degree programs. So if
you were contemplating using the courses toward some future graduate
degree
program, you should consider taking the courses under Advanced Special
Student status.
Campus course selection
If you are a freshman or sophomore,
then the main courses you can plan on taking in the relatively near
future
which have a bearing on an Actuarial career — but which also can serve
you well in several different majors — are the following:
- Math 140-141, 240-241: the regular calculus and
linear algebra sequence
is the most important component of a pre-actuarial course of study, and
these courses coincide with the syllabus for the first actuarial
examination.
- Operations Research, Finance & Accounting courses
in BMGT: if you
want to be an actuary, one of the logical plans is to become a Math Major
with outside supporting area in BMGT.
- Introductory Economics courses (micro and/or macro
economics) are also
very useful for pre-actuarial study.
- A computer-programming course (JAVA or
C). Although actuaries
in insurance companies are often too senior to do much programming
themselves,
they will typically know and use some higher-level languages or
packages
(SAS, MATLAB, Mathematica, etc.) involving database operations,
statistical
analysis and mathematical manipulations.
- A Probability and Statistics sequence to prepare for
the second actuarial
exam: the syllabus coincides with Stat 410-420, but once you are
finished
with Math 141 you might consider taking Stat 400 as an earlier one-term
introduction to Probability/Statistics.
- The Actuarial Mathematics course
Stat 470. This course covers material related to at least two of
the Actuarial Examinations,
namely Courses FM ("Theory of Interest" topics) and MLC ("Actuarial
Models"). However, it is not designed to prepare
the student for any particular examination.
For campus course listings, see the
Undergraduate
Catalog. Also visit the BMGT College Undergraduate
Program.
General plan of study
There are in fact more courses to take, which
would help you in pre-actuarial studies, than you could possibly have
time
for. The essential courses are: Calculus (through Math 241) and
Probability
& Statistics (through at least Stat 410 and 401). The
calculus
sequence prepares you for the first exam, which you SHOULD then take as
soon as you can make several months of study-time in which you would do
MANY problems of the sort you can find in the sample actuarial exams or
in actuarial practice manuals. The purpose of the additional practice
is
to augment your speed at working the actuaries' peculiar (and sometimes
tricky) brand of multiple-choice problem. You SHOULD plan to take the
first
exam as a Junior (perhaps in November of your Junior year).
Ideally,
you would try to take the Probability/Statistics exam (Course P) by spring of
your junior year. The combination of: the two exams, a BMGT or Math
(or double) major, and a summer-internship experience, will position
you
in the best possible way for an actuarial career.
Actuarial FAQs
Which specific courses should I take if I want to become an actuary?
To further your actuarial studies, you should complete calculus
I, calculus II, calculus III and linear algebra. You should also
have some basic business courses (e.g. accounting or finance) or economics courses (micro- or macro-economics). You should also have some basic programming skills (e.g. JAVA and C). Additional math courses you can consider include: STAT400, STAT401, STAT410, MATH424, STAT430 and STAT470.
Which courses here at UMD will prepare me for the actuarial exams?
The specifics of the courses versus exams are as follows:
Exam P: MATH140, MATH141, MATH241, MATH240, STAT400, STAT401, STAT410 (note: STAT410 is not absolutely essential, but is helpful as there are always a few problems, like 4 out of 50, that cover multi-variable topics in probability, mainly change-of-variable formulae and conditional expectations).
Exam FM: Theory of Interest is covered in ECON and Finance courses. Also STAT470.
ECON or Applied Stat: these exams are mostly covered under a program called Validation by Education Experience (VEE), where you would take the ECON micro and macro courses to get some exam credits. Similarly, you would take STAT430 (linear regression) for partial exam credits.
How easy is it to get an actuarial internship?
Whether you have a shot at internships depends largely on your past coursework and GPA and whether you have passed any exam. If you have taken a solid set of courses with a good GPA, and you have passed the first exam, then you will have a better chance to secure an internship.
Where can I find the syllabi for the actuarial exams?
The syllabi are available at www.casact.org and www.soa.org.
Further information, including
Web links
Careers, exams and job searches
Be-an-Actuary Website
Actuary Network
Society of Actuaries
Casualty Actuarial Society
BLS Occupational
Outlook for Actuaries
CMPS
Career Services
Write for the Associateship Course Examination Catalog
to either of
:
Society of
Actuaries, 475 N. Martingale
Rd., Suite 800,
Schaumburg, Illinois 60694
Casualty Actuarial
Society, 1100
North Glebe Road,
Suite 600, Arlington, VA
22201
(703) 276-3100
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