Actualities Newsletter Spring 2015
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Spring 2015
February 18, 2015
Robert Morris University Actuarial Science Club
Actualities RMU ACTUARIAL SCIENCE PROGRAM HAS BEEN RECERTIFIED By David Hudak, Mathematics Department Head I am excited to announce that RMU’s Actuarial Science program has been recertified as a Center of Actuarial Excellence for another five years. We are among a group of sixteen universities in the United States and twentysix worldwide who hold this designation. The process to become recertified involves a written application followed by a site visit. Schools must be deemed to meet or exceed eight specific requirements related to areas such as curriculum, number of graduates, faculty composition, quality of current students and graduates, appropriate integration to business/communication, connection to industry, and research/scholarship.
Inside this issue: RMU Program Recertified
1
Actuarial Curriculum
2
Len’s Focus
3
Actuarial Exam Study Tips 5 Actuarial Advice Survey
6
Survey Results
7
Exams Passed
9
Internships/Jobs
10
I feel that our program is on an upwards trajectory. Our four faculty, Chris Groendyke, Len Asimow, Liang Hong, and myself, all complement each other in various ways. The upper administration including our Dean, Provost, and President have been instrumental in providing the support necessary for a program such as ours to grow and excel. Moving our program into the future, I feel that our new director, Chris Groendyke, has a vision to continue moving the program forward to the next level. Among the requirements mentioned, I would most like to address the category of the quality of our students. When all is said and done, it is the students who make our program what it is. Their hard work and attitude should instill a sense of pride in their accomplishments. They are an asset to the program, the university, the actuarial profession, and to society.
Actualities Newsletter Spring 2015
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UPDATES TO ACTUARIAL SCIENCE CURRICULUM By Chris Groendyke, Actuarial Program Director I’m thrilled to be able to author this column as the new actuarial program director at RMU. It’s a very exciting time indeed: we’re in the enviable position of having a great foundation upon which to launch some changes to the program. Due in large part to the tireless work of Professors Hudak and Asimow and strong support from our administration and alumni, RMU has been able to build an actuarial science program that was recently recertified as a Center of Actuarial Excellence by the Society of Actuaries. With the addition of Dr. Hong to the faculty, we’re well positioned to make even more strides going forward. Among the changes I’m most excited about are the modifications we’re making to the actuarial science curriculum, especially the three new courses we’re developing. These new courses are the result of our response to changes in the SOA/CAS exam system, as well as suggestions by our alumni and advisory board. One area that employers and alumni always emphasize as being crucially important to entry-level actuarial candidates is computer skills, especially the ability to use software tools to analyze data. As a result, we are developing an actuarial data analysis course that will be designed to give students exposure to some of the types of data that actuaries commonly work with, as well as giving students the opportunity to use some of the software tools that actuaries most commonly use. Another course that will soon be added to our offerings is a course covering some of the actuarial topics in life insurance practice. In addition to covering a few of the latter topics on the SOA Exam MLC syllabus, this course will also introduce students to many practical aspects of life insurance actuarial practice, including the roles of actuaries in life insurance companies, taxation and regulation of life insurance companies, and an introduction to risk management and asset/liability management at life insurance companies. This course will round out our “practice area” course offerings, which already include a health/P&C insurance course, and a pensions course, all taught by actuaries with significant experience in these respective areas. In addition, Dr. Hong is developing a stochastic calculus course. This course will cover some of the more advanced topics in the MFE/3L exam curriculum, such as interest rate models, Brownian motion, and Ito’s Lemma, as well as other topics related to this material. All three of these new courses are scheduled to be offered for the first time in 2016. We’re looking forward to implementing these changes as we strive to keep our curriculum both rigorous and relevant to all of the future actuaries!
Actualities Newsletter Spring 2015
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LEN’S FOCUS: DOES MATH MATTER? By Len Asimow Pure mathematics is, in its way, the poetry of logical ideas. ~Albert Einstein Jared can complete a standard worksheet of old actuarial exam problems in 3 hours. Jamie takes 6 hours do a worksheet and a half. Working together, how long would it take for Jared and Jamie to complete 7 standard worksheets? For 99% of humanity the correct answer is, “Who cares?” Nearly everyone recognizes that the infamous “work problem” of high-school algebra classes has no practical application in real life. Seemingly, its only purpose is to confound and discourage students, most of whom correctly conclude that they have much better things to fritter away their youth contemplating. G.V. Ramanathan is a professor of mathematics and statistics, and also the author of a popular study guide for Actuarial Exam P/1. A few years ago he wrote a widely cited and highly controversial op-ed for the Washington Post in which he argues that the importance of math is wildly overblown. He writes, “How much math do you really need in everyday life? Ask yourself that – and also the next 10 people you meet, say your plumber, your lawyer, your grocer, your mechanic, your physician or even a math teacher. … Most adults have no contact with math at work, nor do they curl up with an algebra book for relaxation.” From the Soviet launch of Sputnik in 1957 to the present day there has been an atmosphere of national crisis concerning the critical need to improve math education and ramp up the output of scientists and engineers. We’ve seen the New Math campaign, the famous Nation at Risk report, the New New Math, No Child Left Behind, Common Core, etc., etc. Granted, the near universal insistence that math is important and that the more the better, has been very good for university math faculties. As long as math is considered an indispensable tool for daily life, math departments will be largely protected from shrinkage or, gasp!, elimination. But over all the years and with all the money spent there has been, if anything, an increase in general innumeracy. The fast-food chain A&W once came out with a new burger to challenge the McDonald’s Quarter Pounder. The new burger had a third of a pound of beef, and was preferred in blind taste tests. However the roll-out failed badly. Turns out people couldn’t understand why they should pay the same for a 1/3 of a pound as they were paying at McDonald’s for a 1/4 of a pound. Go figure. Did A&W mobilize the education industry to improve the teaching of fractions and their relative sizes? Of course not. They simply accepted the inability of the general public to grasp a simple math concept and changed the marketing plan accordingly. Maybe it’s time for the educational establishment to do the same. But then there is the relatively small subset of people who actually enjoy working on challenging math problems – no matter how impractical – and devising clever solutions. For those with the aptitude, background and fortitude to do math there are certainly great opportunities in the STEM fields. Among this group you are likely to find present and future actuaries, like yourselves. Did you benefit from working through artificial and unrealistic word problems in algebra class? Probably more than you realize, as we shall soon see.
Actualities Newsletter Spring 2015
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Obviously, math skills are important in actuarial science. Passing exams requires a mastery of certain standard techniques learned in calculus and statistics classes. You must also be adept in translating prose (as in story problems) into symbols and equations so that those techniques can be brought to bear in finding solutions. But acquiring math skills is different from learning mathematics. I’m speaking here of pure mathematics, that rarified world of abstract theorizing, precise definitions and theorems with rigorous proofs. The first exposure to this type of rigor is usually in high-school with Euclidean geometry. Unfortunately, that may also be the last exposure, even for actuaries. Student actuaries can and do succeed without ever taking pure math courses such as real analysis and modern algebra. Still, someone on the level of an actuary should at least have an appreciation of the role that rigor and precision play in the tools that they use. Learning these things helps students to understand the theories and to see the big picture; it facilitates seeing patterns and making connections between seemingly disparate ideas. But, most students seem to confuse rigor with rigor mortis, finding it stultifying and deadly. That seems a shame since there is a great deal of beauty in the world of mathematics, but you must dig deep and ponder hard to appreciate it. It’s not like music or art where the beauty is readily apparent to the ear or eye. Speaking of patterns and connections, let’s return to Jared and Jamie and see how they are getting along with their worksheets. Perhaps you recall that the trick to such problems is to convert the completion times into completion rates (in this case worksheet completion rates per hour) by taking reciprocals. It makes no sense to add the times, but rates are additive, at least under the assumption that Jared and Jamie work independently, and so forth. So now, let’s rephrase the question. Suppose that the completion of a worksheet is the defining event in a Poisson process. Calculate the expected time to complete 7 worksheets if Jared and Jamie work together. This could easily be a question on the Actuarial Exam P/1, and thus by definition it is practical, at least for actuaries. Jared and Jamie working together constitutes a Poisson process with a worksheet completion rate of λ
1
1.5
7
worksheets completed per hour. The time to complete 7 1 12 worksheets is a Gamma random variable with parameters α = 7 and β = hours. Therefore, λ 7
3
6
12
the expected time is αβ =12 hours. So you see, “work problems” have their uses after all. Len Asimow January 2015
Actualities Newsletter Spring 2015
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ACTUARIAL EXAM STUDY TIPS By Emily Raab When it comes to studying for actuarial exams, the general rule of thumb is to study 100 hours for each hour of exam time. For example, since Exam P is a three-hour exam, the recommended amount of study time is 300 hours. Whether you are a first-time actuarial exam taker or you have already passed several exams, I hope that the following tips will help you to make the most of your study time. 1. Do your best in your actuarial classes. The material that you cover in your actuarial coursework directly correlates to what you need to know for your exams, so do homework problems and study hard for tests. 2. Get as many study materials as possible. Sometimes hearing a concept explained in a different way will help you to understand it better. Good sources of information are your textbook, a study manual (such as Actex or ASM), SOA practice problems posted on the SOA website (www.soa.org), and other online resources. If you are willing to spend the money, Adapt from Coaching Actuaries (www.coachingactuaries.com) is a system that allows you to take practice exams and watch solution videos to build up your “earned level” until you are ready to take the actual exam. The Infinite Actuary (www.theinfiniteactuary.com) also offers a few online practice exams for free. 3. Plan ahead. Once you have decided when you will take your exam, look at the calendar several months ahead of your exam date. Create a tentative study schedule by marking dates to read sections of your study manual, to do SOA practice problems, and to take practice exams. You probably will not follow this schedule exactly; just update your schedule as you get closer to your exam. 4. Do as many practice problems as you can, including textbook problems and practice problems from the SOA website. Mark problems that you got wrong or had trouble with the first time, correct them, and attempt them again later. 5. Take practice exams under timed conditions. As you keep taking exams, you will get more familiar with question types and be able to make it through the exams faster. Just be aware of the time you have allotted to do each problem, and don’t spend too much time on any one problem. Go over the solutions to all of the problems, even the ones you got correct, because the solution may present you with a faster way to do a problem. 6. If you are a flashcard person, make flashcards for just the essential formulas that you need to know, as special cases can often be derived quickly from the main formulas. As you get closer to the exam, put a stack of five to ten cards in a place where you will see them every day. Go through the stack every day, but if you don’t remember the formula, make sure to put that card in a separate stack for later review. 7. On the day before the exam, you have a few options. If you have studied enough for weeks and months ahead of your exam, you should be comfortable enough to go through a light review of the material instead of cramming things in at the last minute. Relax, and know that you have done your best to prepare. Good luck on your future exams!
Actualities Newsletter Spring 2015
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ACTUARIAL PEER ADVICE SURVEY By Emily Raab In order to find out what resources and tips are most useful to RMU actuarial science students while studying for actuarial exams, a survey was sent out to actuarial science majors. The results of the survey, as well as the advice of several RMU students, is shown below. Based on the results, more RMU students voted for ADAPT by Coaching Actuaries as a helpful resource for both practice problems and practice exams than any other resource, followed by the Actex and ASM study manuals and old SOA practice problems. Coaching Actuaries is also considered the one most helpful resource for many of the exams. For Exam P, the Actex study manual was chosen as the most helpful study manual, while for Exam FM, the ASM manual was chosen. The Actuarial Seminar II class offered by RMU was also voted as a large helpful resource for Exam FM. Although Actuarial Seminar I did not receive as many votes as Actuarial Seminar II, this could be explained by the fact that more students take the second seminar course compared to the first seminar course. In terms of calculators, several SOA-approved models were chosen based on the exam. For Exam P, the TI-30XS or XB Multiview received the most votes, followed by the BAII Plus, BAII Plus Professional and TI30XIIS or XIIB calculators. For Exam FM, the BAII Plus received the most votes, closely followed by the BAII Plus Professional model. Students taking the remaining three exams favored the BAII Plus Professional calculator. When asked what has contributed most to their success in passing actuarial exams, students selected RMU actuarial science courses as the top contributing factor. This selection was closely followed by timed practice exams, individual study time, practice problems, and hard work. More advice from RMU actuarial science students is shown below. Actuarial Peer Advice on Exams and Internships: (Quotes from RMU Students)
“Start studying the exam material a couple months before the exam and taking a practice exam (timed) at least one month before the exam date.”
“If you work to understand class material the first time, you will find that it is much easier to study
it again for an exam.” “Start taking exams early. Develop a rigorous individual study plan." “Put the time into studying for the exams. Do not wait until your exam is coming up in a couple weeks.” “Start early, ask questions, and try everything.” “Do tons of practice problems!” “Start studying 4-6 months before your exam, not the month before. The textbook is not good enough. If you want an internship, apply to everything. Don't get discouraged.” “If you get an A in the RMU class dedicated to an exam and have an earned level of 10 in ADAPT, you will pass your actuarial exam. Look for internships away from home. It'll be a new experience and it's a good way to see if you can survive far away from home.” “Don't be picky when applying for your first internship. Take the time to apply to many places, not just your ‘first choice.’ It's always better to have options.” “The best advice I can give you is to ask older, more experienced students about their experiences and advice. This will allow you to get multiple perspectives on how to best approach exams and internships.”
Actualities Newsletter Spring 2015
SURVEY RESULTS
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Actualities Newsletter Spring 2015
SURVEY RESULTS CONT.
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Actualities Newsletter Spring 2015
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EXAMS PASSED (JANUARY 2014—JANUARY 2015) Cody Abt Asa Bull Cory Desimone Joe Dorow Sean Gallen Amanda Hornstein Neil Katora Trevor Krstic Joshua Kwasny Corissa Lute Tarek Maalouf Michael Pawelec Sarah Petrovich Emily Raab Melissa Radovich Madeline Scanlon Katie Shirley Lara Will Cody Abt Andrew Berkoben Ian Bookhamer Matthew Corkery Joshua Daum
P P P P P P P P P P P P P P P P P P FM FM FM FM FM
Monica Deluca Miranda Dimaria Robert Dougher Alysa Farabaugh Sean Gallen Yosef Goldberg Samuel Happe Brittany Henderson Kristy Johnson Brian Murone Luke Phillips Michael Phillips Mark Polcha Amber Pramann Moriah Sawyer Benjamin Soffa Joshua Cleary Mark Polcha Amber Pramann Matthew Stefanko Yosef Goldberg Aaron Hartman
Congratulations!
FM FM FM FM FM FM FM FM FM FM FM FM FM FM FM FM MFE MFE MFE MFE MLC MLC
Actualities Newsletter Spring 2015
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INTERNSHIPS/JOBS Name Chad Bomberger Josh Cleary Alysa Farabaugh Aaron Hartman Kristy Johnson Mark Polcha Michael Smith Matthew Stefanko Andrew Berkoben Ian Bookhamer Asa Bull Matt Corkery Monica DeLuca Miranda DiMaria Rob Dougher Kenneth Fugagli Sean Gallen Sam Happe Joshua Kwasny Tarek Maalouf Brian Murone Mike Phillips Amber Pramann Melissa Radovich Ben Soffa Lara Will
Company New York Life New York Life Buck Consultants Nationwide Financial Group Buck Consultants Aetna Nationwide Property and Casualty Towers Watson Highmark Munich Reinsurance Highmark Cigna John Hancock Principal Financial Group MassMutual Erie Insurance Buck Consultants Findley Davies Highmark BlueCross BlueShield Cigna Towers Watson Nationwide Financial Group Swiss Re Penn Mutual Towers Watson
Location New York, NY New York, NY Pittsburgh, PA Columbus, OH Pittsburgh, PA Hartford, CT Columbus, OH Pittsburgh, PA Pittsburgh, PA Atlanta, GA Pittsburgh, PA Philadelphia, PA Boston, MA Des Moines, IA Springfield, MA Erie, PA Pittsburgh, PA Cleveland, OH Pittsburgh, PA Buffalo, NY Philadelphia, PA Pittsburgh, PA Columbus, OH Armonk, NY Horsham, PA Pittsburgh, PA
Good luck with your new positions!
rmu.edu/actuarialscience
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