University Senate Proposed:
Adopted:
RESOLUTION
TO ESTABLISH THE MASTER OF SCIENCE DEGREE
IN
ACTUARIAL SCIENCE
WHEREAS the Education Committee has favorably reviewed a proposal from
the
WHEREAS the existing master’s degree in statistics does not fully meet
the needs of the growing discipline of actuarial science, and
WHEREAS the proposed program offers practical preparation for the actuarial
profession, and
WHEREAS leaders of the actuarial profession are encouraging development
of university-based training, and
WHEREAS there is no question that actuarial science is a legitimate
discipline of study as reflected by comparable programs at peer institutions;
THEREFORE BE IT RESOLVED that the
BE IT FURTHER
RESOLVED that the Senate forward this resolution
to the Trustees for appropriate action with the proviso that this
Committee will review the program in five years.
Proponent:
Committee
on Education
MS IN ACTUARIAL SCIENCE
EXECUTIVE SUMMARY
The proposed MS in Actuarial
Sciences is a rigorous, 40 pt. program of study designed to qualify graduates
for entry level positions in the profession.[1] Graduate and undergraduate programs in
Actuarial Science are offered throughout the
Actuarial science
is the study of managing economic risk. The field is dynamic, responding to
advances in the mathematical theory of risk management as well as to changing
economic circumstances. Nevertheless,
there is a core of foundational knowledge that must be mastered by the
entry-level actuary.[2]
That knowledge
ranges three disciplines: Probability
and Statistics; Business and Economics; and Actuarial Science. The program exposes students to the mathematical
theory of probability and statistics as well as basic statistical analytic
methods; basic economic theory and methods of finance; and specific models and
analytic tools particular to risk management.
Courses in probability (W4105) and inference (W4107) provide students
with a fundamental background in the modeling and analysis of random
phenomena. Courses in the theory of
interest (W4840), microeconomics (W3211) and macroeconomics (W3213), and
corporate finance (W3003) provide the fundamental background in finance and
business required of all actuaries. Courses in statistical methods—linear
regression modeling (W4315), time series analysis (W4437) and survival analysis
(W4543)—provide the foundation required to master a knowledge of actuarial
models (K4820) and methods (K4825).
The MS program serves two
audiences: individuals who have
completed their undergraduate degree with substantial coursework in
mathematics, statistics, or economics, but who lack the comprehensive
background in these fields or in actuarial science required to enter the
actuarial profession; and, individuals who are already working as entry-level actuaries
and who wish to prepare for the examinations within the context of a structured
academic program.
All students are expected to
enter the program with knowledge of elementary economics, linear algebra, and
multivariate calculus. Students lacking
these prerequisites will be advised to complete the appropriate coursework and
reapply to the degree program.
Those students who come with
the foundational courses in hand will substitute electives in advanced
statistics, financial economics, and risk management.
Students may be exempted from
SIEO W4105, SIEO W4107, ECON W3211, and W3213 if equivalent courses have been
taken prior to enrollment in the program.
Students may be exempted from STAT W4315, STAT 4437, and BUSI W3003 if
equivalent courses have been taken prior to enrollment in the program and the
equivalent courses satisfy the Society of Actuaries requirements for Validation
by Educational Experience (VEE).[3] Under no circumstances will students be
exempted from STAT W4840, ACTU K4820 and ACTU K4825. The academic advisor grants exemptions based
on a transcript review and results on placement examinations, administered when
necessary.
After being exempted from two
courses, students must replace additional courses from which they are exempted with
approved electives chosen from a list that includes STAT W4201, Advanced Data
Analysis; SIEO W4606 Elementary Stochastic Processes; SIEO W4801, Introduction
to Property and Liability Insurance Models; SIEO W4802, Introduction to Life
Insurance and Aggregate Loss Models; SIEO W6501 Stochastic Processes and
Applications; IEOR E4404 Simulation; MATH W4071 Introduction to the Mathematics
of Finance; and BUSINESS B6301Corporate Finance.
The student with a strong
background in mathematics, statistics, economics, and business will be required
to take only the core courses in actuarial methods and find greatest value in
the opportunity to take electives in the areas outlined above. However, it is the rare college graduate,
essentially only the one who set out early on to become an actuary, who will
have covered the whole spectrum of material required to qualify for an
entry-level position in actuarial science.
In addition to coursework,
students are required to enroll for at least one semester on a non-credit basis
and at no additional cost in either an internship or the practitioner seminar
series. Students not working in the
field are strongly encouraged to participate in the internship program, in
which students are placed by
PROGRAM OF STUDY
The proposed MS in Actuarial
Science is 40 pts., with courses drawn almost entirely from the existing
graduate offering of the Departments of Statistics, Economics, and Business. Students may enroll in the program either
full time or part time.
FULL TIME
TERM I
STAT W4109 Probability and
Statistical Inference 6 pts (NB:
combination of SIEO W4105 and STAT W4107)
ECON W3211 Intermediate
Microeconomics, 3 pts
STAT W4840 Theory of
Interest, 4 pts
TERM II
STAT W4315 Linear Regression
Models, 3 pts
ECON W3213 Intermediate
Macroeconomics 3 pts
ACTU K4820 Actuarial Models 6
pts
TERM III
STAT W4437 Time Series
Analysis, 3 pts
STAT W4543 Survival Analysis,
3 pts
BUSI W3003 Corporate Finance,
3 pts
ACTU K4825 Actuarial Methods
6 pts
PART TIME
TERM I
STAT-IEOR W4105 Probability 3
pts
STAT W4840 Theory of
Interest, 4 pts
TERM II
STAT W 4107 Statistical
Inference, 3 pts
ECON W3211 Intermediate
Microeconomics, 3 pts
TERM III
STAT W4315 Linear Regression
Models, 3 pts
ECON W3213 Intermediate
Macroeconomics 3 pts
TERM IV
STAT W4437 Time Series
Analysis, 3 pts
BUSI W3003 Corporate Finance,
3 pts
ACTU K4820 Actuarial Models 6
pts
TERM V
ACTU K4825 Actuarial Methods
6 pts
STAT W4543 Survival Analysis,
3 pts
In addition to their
prescribed coursework, all students may take electives in order to round out
their understanding of business and/or prepare for more advanced
examinations. Moreover students not
working in the field are strongly encouraged to complete an internship to
acquire the work experience required of applicants for entry level professional
positions.
[1] Long regarded as the last great apprenticeship,
actuarial training has historically involved on-the-job mentoring, self-study, intensive professional seminars,
and exam preparation. However, today
that training is gradually involving more and more formal, educational
coursework, particularly at the early stages.
In fact, the SOA Board of Governors recently formed the Accreditation and Implementation
Task Force to establish the rules and procedures whereby academic actuarial science
programs will potentially be accredited.
[2] Actuaries are validated through examination and
experience by the Society of Actuaries (SOA) or the Casualty Actuarial Society
(CAS). The SOA administers exams in life
insurance, health benefits systems, retirement systems, and finance and
investment. The CAS administers exams in
the property and casualty fields (fire, accident, medical malpractice, worker’s
compensation, and personal injury liability).
The SOA and CAS administer jointly the first four examinations, which
test knowledge of calculus, probability, statistics, and other areas within
mathematics. The proposed MS program
will provide students with the foundational knowledge validated in SOA exams P,
FM, M, and C (CAS exams 1-4).
[3] SOA assumes that all students standing for the actuarial examinations have base knowledge and they validate that knowledge either through examination or through VEE, Validation by Educational Experience. The three topics that may be validated through VEE are Applied Statistical Methods, Corporate Finance, and Economics. “Topics appropriate for VEE are those that are either best learned in a classroom environment or are somewhat peripheral to actuarial work. Applied statistics requires analysis of data that is very difficult to validate with a traditional multiple choice exam. While corporate finance and economics are not core topics, they are important enough to have some verification of learning take place.” SOA.org.