Actuarial Science Option
How to prepare for a career in Actuarial Science
The primary goal of an undergraduate program in actuarial science is to prepare students to be successful on the actuarial exams of the SOA and CAS and to complete the three validation by education experience (VEE) requirements. For example, at a Center of Actuarial Excellence designated by SOA, the curriculum is usually available for the three VEE subjects and four of the first five actuarial exams.
Students in the actuarial science option at WSU must complete a set of common math courses to meet the math major requirement. The goal of the option is to provide students with an opportunity to complete the three VEE requirements and prepare students to complete the first two actuarial exams (which means a student may pass the exams by studying on their own and not necessarily through required courses). Students with a solid background in mathematics are usually successful in passing subsequent actuarial exams whether through self-study or additional training. Note that probably the single most important qualification for an entry-level candidate is exam progress. Entry-level candidates should be prepared to pass two exams before being seriously considered for employment. However, a candidate with one exam and excellent internship experience is just as desirable as a candidate with two exams and no experience. The market generally discourages candidates from passing more than three exams without experience.
Since the selection of related courses at WSU is limited, students are strongly encouraged to learn the exam material and study additional subjects through self-study. Practice exams for P/1 and FM/2, as well as information on local and international summer internships may be obtained from the adviser.
Economics: The introductory micro and macro economics (Econ 101 and 102) are appropriate to meet this requirement. While Acctg 230 and 231 are not required for actuarial exams, an overview of accounting is extremely helpful. The intermediate courses such as EconS 301 and 302 were necessary when this material was tested on the former Exam 2.
Corporate Finance: Fin 325 and one of Fin 421, 422 or 425 are sufficient to meet this requirement. Students are strongly encouraged to become certified with a minor in business in order to get into these courses. To be eligible to apply for certification as a business minor, a student must have a cumulative GPA of at least 2.5, and have earned at least 60 credit hours. If a student's schedule is flexible, a double major in math and finance is encouraged.
Applied Statistical Methods: Math/Stat 423 and Stat 516 may be used to meet this requirement. Math/Stat 456 covers a more theoretical side of statistics and is helpful for Exam 3L.
Computing Skills: The required Math 416 (Simulations) is helpful for Exams MFE/3F and 4C. Math 448 (Numerical Analysis) may be used to substitute for Math 416. Some of the most highly sought after computer program and language experience in today’s market is in Excel (i.e., macros, pivot tables and vlookups), Access, Visual Basic/VBA, SAS, SQL and C++. Note that simulation methods are extremely useful in practice, and the advanced Exams 7, 8, and 9 all test some aspects of simulation methods. Math 300 provides some introduction to SQL and Python (although R is a great statistical application for one file, Python should be used for more complex data analysis and text mining on many datasets).
The First Two Actuarial Exams
Exam 1P-Probability This is covered in WSU Math/Stat 443.
Exam 2FM-Financial Mathematics Interest Theory and Financial Economics (Applications of discrete and calculus-based methods to simple and compound interest, force of interest, bonds, annuities, amortization and sinking funds).
The Other Actuarial Exams
Exam MFE/3F-Actuarial Models: Financial Economics Segment. Related WSU courses: Math 416, Math 490 (Introduction to Stochastic Calculus).
Exam M (SOA)- Actuarial Models. Related WSU courses: Math/Stat 443, Math 416, Math 490 (Introduction to Stochastic Calculus).
Exam 3L (CAS)-Actuarial Models: Life Contingencies and Statistics Segment. Related WSU courses: Math/Stat 443, Math/Stat 423, Math/Stat 456.
Exam 4C-Construction and Evaluation of Actuarial Models. Related WSU courses: Math 416, Math/Stat 456.
Exam 5-Basic Ratemaking and Reserving
Exam 6-US Regulation and Financial Reporting
Exam 7-Advanced Techniques in Unpaid Claim Estimation, Insurance Company Valuation, and Enterprise Risk Management
Exam 8-Advanced Ratemaking
Exam 9-Financial Risk and Rate of Return