Actuarial Science Major Forum 6 PM Thursday August

Actuarial Science Major Forum 6 PM, Thursday, August 24, 2017 110 Business Last edited 7. 5. 17

Discussion Topics I. Introductions II. Career Opportunities III. Penn State Courses IV. Actuarial Exams & VEE (& Transition Rules) V. Actuarial Science Club VI. Internships VII. Questions

Penn State Actuarial Program Stats • # 1 Job in US (per WJ) • # 1 School for Recruiters (per Business. Week) • Largest Actuarial Program in US • About 150 exam passers per year • About ½ from Smeal & ½ from Eberly (Math & Stat) • Center of Actuarial Excellence – only 15 in US But It’s A Very Difficult Degree • • • If not taking Actuarial Exams, it is best to choose another major Students with A’s and high B’s in Calculus and Probability: pass exams, get jobs Take STAT 414 & SOA Probability Exam (P) - 3 rd Semester Take RM 410 & SOA Financial Math Exam (FM) - 4 th Semester Take RM 415 & SOA Financial Economics Exam (MFE) - 5 th Semester Internship + 3 Exams to get a job Intro Career Courses Exams Club Internships

Faculty • Ron Gebhardtsbauer, FSA • • Worked in Insurance, Pensions, Head of Retirement @ Mercer in NYC Spokesperson for US profession from 1996 to 2008, Actuary in Congress Teaches RM 412 (Pricing Life Insurance) & RM 297 (Probability) in Fall Teaches RM 410 (Financial Math) RM 415 (Pricing Derivatives) in Spring • Zhongyi Yuan, Ph. D & ASA • Teaches RM 410 (Financial Math) in Fall • Teaches RM 420 (C Exam = P&C and Health) in Spring • Nan Zhu, Ph. D & FSA • Teaches RM 415 (Pricing Derivatives) in Fall • Teaches RM 411 (Pricing Life Insurance) in Spring • Lisa Weaver, LLD • Retirement Consultant, Teaches RM 401 (Pensions) each Spring • Lisa Posey, Ph. D & Dave Cather, Ph. D • Teach Insurance and Risk Management Intro Career Courses Exams Club Internships

The Good We Do For the World Mutual Benefit Societies helped Widows & Orphans Captains could build new ships & continue commerce Banks can make loans for tall buildings after 9/11 Actuaries project future & create products so that you needn’t worry about the high cost of: • • Intro Career Needing an expensive medical operation your kid’s financial needs if you or your spouse die early becoming disabled Needing a new car after someone crashes into you Your home burning down, or being flooded by a hurricane Outliving your assets in retirement Your company going under if sued, etc. Courses Exams Club Internships

Club Officers Officer Position Internship President Aon Hewitt, Philadelphia Vice President NY Life, NYC Mitch Yerk Treasurer Global Indemnity, PA Kylie Krout Secretary Aon Hewitt, NYC Corporate Liaison Cigna, CT & Liberty Mutual, Boston Corporate Outreach Officer Liberty Mutual, Boston Student Relations Liaison BC/BS, NY Social Chair Northwestern Mutual, Milwaukee F, S, J Liaisons Aetna, Transamerica, AIG (PA, GA) Webmaster Voya, West Chester, PA Database Manager Voya, West Chester, PA John Miller Shelley Shen Ethan Frederick & Ivan Yen Paul Birch Yalan Yu Noah Blake Grace, Katie, Harry Christina Chen Di Fan Zheng **Please feel free to email officers after talking to your mentor. **You can get a mentor by using Google doc of Mentors or emailing Yalan Yu or Shelley Shen. Intro Career Courses Exams Club Internships

Where Do Actuaries Work? Insurance Practice Area • Insurance • 18 -24 month rotational programs • Competitive study programs • Clear reporting structure (one boss), Reasonable hours • Consulting, Investment, & Accounting Firms • May have longer hours – especially during busy season • Dynamic work environment • Government & Academia Intro Career Courses Exams • Life/Annuity • Health • Retirement • Property/Casualty • Reinsurance • Finance/Investment Club Internships

Get Started Early! Three ways to get into RM 410 in 4 th Semester: 1. Take a calculus course in summer 2. Take MATH 231 and STAT 414 concurrently (MATH 230 for Eberly students) 3. Take MATH 141 in first semester (see footnote on slide 9) You must be in Major to register for RM 410 Smeal students must have 44 credits are PSU & FIN 301 to enter major Take RM 297 with STAT 414 – very helpful in passing 414 and the P Exam Intro Career Courses Exams Club Internships

Sample Schedule with Stat Minor Yr Fall Spring 1 st MATH 140 or MATH 141* (Calc II) ECON 102 (Micro) - VEE MATH 141 or MATH 231* (Calc III – MATH 230 for Eberly) ECON 104 (Macro) – VEE ACCTG 211 (Accounting–FIN 301 Pre-req)-VEE 2 nd MAT 231 and STAT 414* (Prob Theory) RM 297 P Exam in Jan FIN 301 (Corp Finance) –VEE R M 410* (Financial Math) Excel Take FM Exam in June MATH 220 (Matrices) helps in 412/415/MLC 3 rd R M 415 (Derivatives Markets) Take MFE in late November STAT 415# (Math Stat) helps C/S/MS R M 411* (Life Contingencies) VBA STAT 483# (better SAS class) STAT 416# (Stochastic Processes) helps CAS Exam S 4 th R M 412* (Life Contingencies) Take MLC Exam in late October STAT 462# (Regression Analysis) RM 420* (P&C/Health) Stat allows as substitute or RM 401*(Pensions) STAT 463# (Applied Time Series) R Take C Exam in June or CAS S Exam in Oct If 5 on AP exam, place out of MATH 140 (to take 231 & 414 sooner). If you got a 4, see Math Dept Advising website on whether to place out If you pursue this plan, there is a risk that your ETM & Overall GPAs could be hurt beyond repair, making it impossible to pursue other Smeal Majors. Please make your decision carefully, taking into account your abilities & commitment to this rigorous plan. Students with 44 PSU credits & FIN 301 can apply to Act. Sci Option & if admitted may schedule RM 410 (if have STAT 414). Take ACCTG 211 and SCM 200 in in 2 nd semester so you can take FIN 301 in 3 rd semester. P&C and Health insurers tell us that STAT 483 and other Data analytics courses help you get a job * C or better required. If C’s, consider other options or majors # for STAT minor; 462/463 needed for VEE & S Intro Career Courses Exams Club Internships

Smeal Major Required Courses RM 320 W* (Fall Only) Risk Management and Insurance * C or higher required RM 430* (Fall Only) Life and Health Insurance * C or higher required RM 301 gone Intro Career Courses Exams Club Internships

reference Smeal’s Business Core SCM 200*: Statistics for Business Or STAT 200 MIS 204*: Business Information Systems Act Sci students can skip Supply Chain 301 FIN 301*: Finance *C or higher required ACCTG 211*: Accounting MKTG 301*: Marketing MGMT 301*: Management BA 411: Analyzing Business & Industry B LAW 341: Business Law BA 342: Business Ethics Intro Career Courses Exams Instead of majoring in Finance & Eberly’s Act Sci option (a) take Smeal’s Act Sci Option with RM 415, (b) sign up for Penn State’s Asset Mgmt Club, Investment Assoc, Finance Society, or Econ Assoc, (c) read FIN 414 handouts at sites. google. com/site/lougattis/financial-modeling-files Club Internships

reference Stat Major - Actuarial Option • • Additional Statistics & Mathematics courses: MATH 230 instead of MATH 231 MATH 220: Matrices (good course for RM 412) STAT 415: Mathematical Statistics (good course for C exam) STAT 461: Analysis of Variance STAT 470: Problem solving in Applied Statistics STAT 483: SAS (better than STAT 480) STAT 462/463: Applied Regression/Time Series Analysis-VEE 1 from CMPSC 101/102/121/200/201/202: C++, VB, Matlab, Fortran • • Select 9 credits from: • STAT 416: Stochastic Modeling • RM 420: Loss Models (needs a petition, which will be accepted) • • • Intro STAT 440: Computational Statistics STAT 464: Applied Nonparametric Statistics STAT 466: Survey Sampling MATH 436/441: Linear or Matrix Algebra MATH 451/455: Numerical Computations & Numerical Analysis IE 434/436: Quality Control/Industrial Engineering Career Courses Exams Club Internships

reference Math Major - Actuarial Option • Additional Mathematics & Statistics courses: • • • MATH 230 instead of MATH 231 MATH 311 W & 312: Discrete Math & Real Analysis MATH 251: Ordinary & Partial Differential Equations MATH 220: Matrices (definitely take) MATH/STAT 415: Mathematical Statistics (definitely take) MATH/STAT 416: Stochastic Modeling (definitely take) MATH 486: Game Theory or MATH 451: Numerical Computations MATH 484: Linear Programming CMPSC 101, 121, 201 C: Computer Programming IE 425: Operations Research RM 415: Pricing Derivatives or 420: Loss Models (ask) Intro Career Courses Exams Club Internships

reference Eberly Majors - Actuarial Option • Business courses required: • RM 302: Risk & Insurance (Fall is a good time to take it) • Smeal students have to take RM 415/320/430 instead • RM 410*/411*/412*: Actuarial Courses • FIN 301: Corp Finance & Financial Markets - VEE • ACCTG 211: Accounting – VEE (Math Majors need to get into FIN 301) • Business courses not required: • Business Core • B LAW 341 & BA 342: Business Law & Ethics • MIS 204: Intro to Business Information Systems • Eberly students can get Business Certificate by taking a few courses * C or Higher required Intro Career Courses Exams Club Internships

Courses in Predictive Analytics (Data Science) reference P&C and Health Insurers say they’ll hire more students with these courses • Regression with HW in R: STAT 462 (taken for VEE) • Time Series with HW in R: STAT 463 (taken for VEE) in SRM exam • GLM: STAT 511 and someday in STAT 462 (taken for VEE) • Machine Learning (Decision Trees, Clusters) CMPSC 448/DS 310/STAT 557/464 Neural Networks & Classification: https: //www. coursera. org/learn/machine-learning • Principal Components Analysis STAT 505 (Multivariate Stat) prereq MATH 441 DS 310 prereq DS 220 & IST 210 • SAS: STAT 483 much preferred (has some SQL) • Monte Carlo: STAT 440 and 416, RM 411/412/415 (taken for MLC/MFE) • Data Mining/Visualization: STAT 380 CMPSC 448 pre-req = CMPSC 122 Python • Bayesian Comp Tech/MCMC/Bootstrapping: STAT 440 (Computational Stat) pre-req = MATH 220 • Survey sampling: STAT 466 • Survival Tables/Cox/Proportional Hazards: STAT 525 • Design and Validation of Experiments/Outcomes: STAT 461 (Anal of Variance) See http: //www. datasciencecentral. com/profiles/blogs/data-scientist-core-skills https: //www. coursera. org/specializations/jhu-data-science https: //www. udacity. com/courses/data-science STAT Data Science majors take CMPSC 121, IST 210, STAT 380, and DS 220 in 1 st 3 semesters Intro Career Courses Exams Club Internships

Other Good Courses to Take • • • If controls allow (e. g. , Eberly students can’t take FIN 305/408) reference MATH 220: Matrices – great for Markov Chains & MLC MATH 251: Differential Equations with PDEs MATH 412: Partial Differential Equations MATH 451 or 455: Numerical Computations/Analysis MATH 486: Game Theory FIN 305 (2 piece): Financial Mgmt of Business Enterprise FIN 408 (2 piece): Financial Markets and Institutions ECON 302/304: Intermediate Micro/Macro Economics ECON 351: Money and Banking HPA 057: Consumer Choices In Health Care for gym Gen Ed FIN 414 slides: https: //sites. google. com/site/lougattis/financial-modeling-files and sign up for Penn State Asset Mgmt Club, PS Investment Assoc, PS Finance Society, or PS Econ Assoc Intro Career Courses Exams Club Internships

reference Courses with Programming • • • RM 297/410/411/412: Excel & VBA STAT 462/463: some Minitab, R, or SAS may be used STAT 483: SAS & SQL - great for Health and P&C jobs STAT 484/485: R RM 497 with Liang Peng R for financial topics Monte Carlo, hypothesis testing, linear regression, Va. R, optimal portfolio strategy • • CMPSC 121/122 Intro to Computer Programming (Python? ) CMPSC 200: MATLAB CMPSC 203: Excel with some Access MATH 451: MATLAB used Intro Career Courses Exams Club Internships lynda. psu. edu can also help with VBA

Success in Classroom and Business World • Profs and Bosses want students who understand why • Word problems; essay answers • Memorization helps but understanding is most important • Preparation before class or meeting with boss • Read & do synopsis of material before class/meeting • Work with others • Homework teams (plus good friends help after graduation) • Confidence • Class Participation; Teaching HW problems; Be TA’s • Officers organize projects (not just put on resume) • Good at self-study, internship, pass FSA exams • Projects (e. g. , selling insurance to parents, your retirement projection) Intro Career Courses Exams Club Internships

Actuarial Exams • Given in Harrisburg, Philly, Pittsburgh • Or near your home over summer/winter breaks • MLC Exam given at Penn State • Society of Actuaries (SOA) • Life/Pension/Health/ERM/Finance • Casualty Actuarial Society (CAS) • Property/Casualty • P, FM, MFE exams satisfy CAS Intro Career Courses Exams Club Internships

Why Should I Take These Exams? • 2 exams before Junior year Career Fair for internship • 3 exams + internship for FT job • Take exam during break after applicable course • Tough passing FM exam when in RM 411 • We cover all 5 SOA preliminary exams here • Some students pass all before graduation • Almost Associates in the So. A • We pay you $100 if you pass exam ($200 for MLC and C) • Take formal pass slip with score to 355 Business • Request right away; Right before graduation is too late • The Club pays another $200 to students who pass 4 exams! Intro Career Courses Exams Club Internships

reference SOA/CAS Exams Best Manual Use during course too Exam Course(s) Take it when? 1/P - Probability Theory STAT 414 & RM 497 C ACTEX, SOA Q, ADAPT, Actuary Exam 2/FM - Financial Mathematics (with Swaps) RM 410 ASM or ADAPT Sophomores: June Juniors: Dec Intro to Derivatives moved to MFE Summer 17 3 F/MFE – Financial Econ 2018: Investment &Fin. Mkts RM 415 ASM or ADAPT Late November or July 415 done by late Nov Stochastic. Calc→FSAexam MLC - Life Contingencies 2018: Long-Term Act Math RM 411/412 Infinite Actuary Late October Early May Only RM 411 needed for CAS S exam 4/C – P&C and Health Ins 2018: Short-Term Act Math RM 412/420 STAT 415/416 TIA & Mahler ADAPT Q - pick your level SOA 308 Q great June Stan says easy after Zhongyi’s RM 420 former Applied Stat VEE Statistics for Risk Modeling STAT 462/463 GLM, etc. ? ? STAT 462/463 waive Exam thru 7/1/2018 S Exam (CAS) STAT 416, 462, 463 & RM 411 ? October 30, 2015 LC, Statistics, & Probability Models Predictive Analytics ? ? ? Proctored Project, after graduate? Sophomores: Jan Tutor Maybe take first module over summer, if internship pays for it Tutorials at http: //instruction. bus. wisc. edu/jfrees/UWCAELearn/default. aspx SOA policy on calculators: https: //www. soa. org/education/exam-req/exam-day-info/edu-calculators. aspx Some prefer TI 30 X II. BA II Plus preferred for FM exam for its financial keys Intro Career Courses Exams Club Comments Internships

Validation by Education Experience: VEE • Required by SOA, CAS, and Employers • VEE’s ECON 102/104, ACCTG 211, FIN 301 required to graduate • Take ACCTG 211 in Spring, per Head of Acctg Steve Huddart • Also take VEE STAT 415 • Must receive a grade of B- or better • Or 4 or 5 on AP tests • Can’t apply for VEE until pass P & FM • Other Campuses can use University Park VEE codes per SOA • Can also get credit by exam through • ACTEX for Finance & Applied Stat VEE’s • CLEP for Econ VEE Intro Career Courses Exams Club Internships

Applied Statistical Methods: VEE Exam 2018 • Accepted Courses: take one from each • • Applied Regression (must include Generalized Linear Models in 2018) • STAT 462, 501, or 421; or ECON 306 (and maybe STAT 460) • ECON prerequisite can be satisfied by Stat 414 Applied Time Series • STAT 463 (STAT 510 or ECON 483 if available) You can mix and match. ECON 485 may satisfy both – check SOA’s VEE website • Get STAT Minor - if also take: • • • STAT 415 (Mathematical Statistics) VEE in 2018 already required in Eberly STAT 416 (Stochastic Processes) covers material in CAS Exam S STAT 480 (Intro to SAS - 1 credit) STAT 483 is better Some get ECON Minor Take ECON 302/304 & 6 credits of 400 level ECON such as 445 (Health Policy), 412 (Labor), 444 (Corp), & 457 (Banking) Intro Career Courses Exams Club Internships

Changes Starting 7/1/2018 • Mathematical Statistics (STAT 415) • New required VEE course. Drops Mathematical Stat from C exam • Applied Statistics (STAT 462 and STAT 463) • • Elevated to Statistics for Risk Modeling (SRM) Exam. Take STAT 462/3 before 7/1/2018, as it will waive exam! Must include Generalized Linear Models (GLM) – in STAT 421 instead of STAT 462 And Principal Components Analysis, Decision Trees, and Cluster Analysis in STAT XXX • Predictive Analytics (PA) • New Proctored Exam/Project (using R); SOA thinks students will wait until after graduation • MFE becomes IFM (Investment & Financial Markets) • ½ of MFE exam plus higher level Finance (Portfolio Variance, Efficient Frontiers, CAPM, Efficient Markets, Behavioral Finance, Investment Risk, Semi. Variance, Va. R, TVa. R, Decision Trees, Capital Structures (Miller-Modigliani, Asymmetric information) • MLC (RM 411 and 412) becomes LTAM (Long-Term Actuarial Math) • Estimating qx moves from C to MLC. Add Retiree Medical, LTC, LTD, & other LT products. Drop UL • Exam C (RM 412 and 420) becomes STAM (Short-Term AM) • Reserving and Ratemaking (pricing) being added to Exam C. • Loss Development Factors and Triangles • ASA by 7/1/18, FSA by 7/1/2022: exempt from new rules (e. g. , PA) • Applied Stat & Exams by 7/1/18 transfer to comparable exams • FIN 301 qualifies for Finance VEE thru 7/1/2019. Thereafter, need ACCTG 211 Intro Career Courses Exams Club Internships

ASA Changes Current New (Starting 7/1/2018) Transition Rules 5 Exams 7 Exams • P • FM • MFE • MLC • P • FM • IFM • LTAM • SRM • PA Attain ASA by 7/1/2018 + 3 VEE’s • Economics • Corporate Finance • Applied Stat Career Earn Applied Statistics VEE by 7/1/2018 = counts as SRM exam 3 VEE’S • Economics • Accounting and Finance • Mathematical Statistics Modules & APC Intro FSA by 7/1/2022 = exempt from changes Earn Corporate Finance VEE by 7/1/2019 = counts as new Accounting & Finance VEE Modules & APC Courses Exams Club Internships

Best Practices to Learn & Pass Exams • Read the book • Don’t just read the words. Read them until you understand them. • Take notes on what you read • Create a synopsis to refer to later • Reproduce the calculations in the examples • Ensure they are right. Email author with corrections • Don’t trust what you read, unless and until you agree with it • Take the class on the subject • Be engaged in class • Use recommended study manual on each exam • Do lots of sample exam questions (with required calculators) • Without looking at the answers first • Work on a HW team. Talk to your teammates about the class • Talk to your actuarial mentor about the material • We assign mentors to all rising Juniors. Do you have a mentor? • Meet with prof on lectures points and HW you don’t understand Intro Career Courses Exams Club Internships reference

Actuarial Science Career Fair • Monday 9/11/17 from 5 to 8 PM in Atrium • Over 35 companies • Great place to find Internships • 1 st yr students can get internships if have exam or very good in Math • To attend: • Must do Mock Interview & meet with Mentor for course/exam advice • GPA>3. 20, or A’s in Calculus, or Exam Passed • Pay Club Dues • Some firms (like Met Life and AXA) don’t attend Career Fairs, so apply on their websites Intro Career Courses Exams Club Internships

Club Opportunities • Résumé & Mock Interview Workshop • • Monday 8/28: 6 – 8 PM in 110 Business Bldg Submit resume asap via Club Resume Dropbox webpage Must use instructions on Club’s Resume webpage RM 410 students must do interview ASAP before Career Fair • Mentors for Juniors (& interested Frosh/Soph) • If interested, email Yalan Yu yqy 5207@psu. edu • Special Meeting for Commonwealth/Transfer Students • Wednesday 8/30: 6 – 7: 30 PM in 006 Business • Special Meeting for International Students • Wednesday 9/6: 6 – 7: 30 PM in 006 Business • Ideas for internships, jobs, grad school (e. g. , MAS at PSU) Intro Career Courses Exams Club Internships

Actuarial Science Club • Company Info Sessions (listed on Club’s Home Page) • Exam Review Sessions (Club’s Review Sessions Page) • Tutors for help on exams • Field Trip to Actuarial Employers (Spring) • Speakers Series: Int’l Actuarial Association President on 10/6 at 6 pm; required attendance • THON involvement • Social Events • Panel Discussion of Alums from all Practice Areas Intro Career Courses Exams Club Internships

Actuarial Science Club • Club website: http: //www. psuactsci. com/ • List Serve signup on Club home page – Very Important • Facebook group • Study Manual exchange • Questions about Actuarial Exams & PSU Classes • Social events • Our Internships Intro Career Courses Exams Club Internships

Questions?