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Managing risk and identifying opportunityActuarial Studies

business.monash.edu

I was always interested in studying something related to maths, and was considering a science degree. But at some point in Year 12, I was introduced to the field of actuarial science and I knew I had found my career. It sounded like a really interesting combination of technical knowledge, applied skills and mathematics, and it’s been a great area to study.Nathaniel TomasettiBachelor of Commerce (Scholars Program) Majors: Actuarial Studies and Econometrics

The actuarial profession is over 150 years old, and is responsible for the design and pricing of products related to future life expectancy. The principle of using information from the past to forecast and price uncertain future events still remains a cornerstone of the profession, although the role of an actuary has extended significantly in the business world.

Today, actuaries can be found in a wide range of areas from traditional pension and life insurance to general insurance, enterprise risk management, fund selection and modelling the risk profiles of large businesses. Many actuaries can be found at the very highest levels of employment, as chief risk officers or on the boards of large companies.

In these varied roles, actuaries identify, analyse and assess risk. They determine the likelihood of economic or property losses such as those that occur during natural disasters, and design ways to lower the financial implications of these losses. They do this by using information gathered from historic data, and by applying modelling and forecasting concepts from mathematics and statistics to real-life scenarios.

Did you know?To work as a professional actuary you need to be accredited by the Institute of Actuaries of Australia (sometimes referred to as the “Actuaries Institute”).

Our actuarial science degree and units in our actuarial studies major are accredited by the Institute of Actuaries of Australia, which means you may receive exemptions for Part I of the Institute’s accreditation through your university studies.

Careers in actuarial studiesActuaries work across many fields of finance and business. People with actuarial qualifications are traditionally found in life insurance companies and consulting actuarial firms, offering a range of advice in various fields such as finance and superannuation; investment operations for asset managers, stockbrokers, banks; general insurance; health insurance and the broader fields of risk management.

Actuaries also find work in other industries, such as the mining or telecommunications sector, as well as in government organisations and academia. They work across many different types of projects, from carbon footprint modelling to the mathematics of customer loyalty schemes. In these roles, they apply their mathematical modelling techniques and skills to make sense of future uncertainties, and then communicate their findings in a clear and concise way.

Some of the things you may do as an actuarial professional include:

— Defining, analysing and solving complex financial and business problems relating to areas such as insurance premiums, annuities, superannuation funds, pensions and dividends.

— Examining financial projections for general insurance companies, finance companies, government and other organisations.

— Designing new types of policies, assessing risks and analysing investments in life insurance, superannuation funds, health insurance, friendly societies, financial markets and other areas.

— Formulating mathematical models to simulate processes.

— Applying models to experimental observations, and adjusting and recasting the models using numerical analysis methods to develop algorithms and perform computations.

— Liaising with management and clients to determine the subject or area to be surveyed or examined.

— Specifying the data to be collected, and the methodology to be used in collection and analysis.

— Evaluating and describing the reliability and utility of source information analysing and interpreting data, and producing relevant statistics to describe and infer particular trends and patterns.

If you’re interested in pursuing a career as an actuary, Monash Business School has two degrees that can help you get there:

Bachelor of Actuarial Science

Bachelor of Commerce (major in Actuarial Studies)

Why study actuarial science?Actuaries apply their skills in mathematics, statistics, finance, economics and business to address problems in a range of fields such as insurance, superannuation, business and financial services, scientific and social research, and engineering.

Bachelor of Actuarial ScienceThis specialist degree will teach you how you can apply your mathematical talent to the commercial world. Actuaries identify, analyse and assess risk. They use mathematical and econometric models to forecast real-life scenarios, such as the likelihood of economic or property losses and their impacts on insurance premiums, superannuation or other financial investments. Within the Bachelor of Actuarial Science you’ll gain the skills to commence your career as an actuary and may qualify for exemptions for Part I of the Actuaries Institute of Australia professional qualification, which you need to work as a professional actuary.

Location: Clayton campus

Actuarial studiesA major in Actuarial Studies gives you the skills to identify, analyse and quantify risk, using mathematical, econometric and financial models. You will learn about forecasting and econometric modelling tools, and develop the technical skills to apply these tools to a wide range of business settings across the public and private sector.

Offered in: Bachelor of CommerceLocation: Clayton campus

Becoming a fully-qualified actuary with the Actuaries InstituteTo work as an actuary you will need to be admitted as an Associate of the Actuaries Institute. This requires additional study to achieve accreditation. To become an Associate, and be entitled to the designation ‘actuary’ — a fully qualified actuary (FQA) according to the International Actuarial Association — you’ll need to complete Parts I, II and III of the Institute’s education program. However, the Institute does grant exemptions for some of the units you will study at university. Exemptions for Parts I and II of the Institute’s education program are available through our Bachelor’s and Master’s programs. Completion of the Part III exams must be undertaken through the Institute. Further information on Part III is available at: www.actuaries.asn.au

A world of opportunity

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Actuaries Institute Core Technical unit CT1 CT2 CT3 CT4 CT5 CT6 CT7 CT8

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1 Accounting for managers 30%

1 Principles of microeconomics 55%

1 Principles of macroeconomics 45%

1 Business and economic statistics 25%

2 Financial institutions and markets 20%

2 Corporate finance 50%

2 Debt markets and fixed income securities 100%

2 Introductory economics Prerequisite unit

2 Actuarial statistics 65%

2 Probability and statistical inference 75%

2 Statistical methods in insurance 50%

3 Insurance mathematics 50%

3 Contingencies in insurance and pensions 65%

3 Financial econometrics 50%

3 Modelling in finance and insurance 50%

3 Financial mathematics under uncertainty 35% 35%

3 Applied econometrics Required for entry into Honours

Please note: exemption for each CT subject is based on sufficient grades in one or more Monash units, as indicated on the table above. You must take all units relevant to a CT subject, as listed above. Where only one unit is listed you must achieve a Distinction grade in that unit. Where two or more units are listed you must achieve an overall weighted average Distinction grade, with a minimum of a Credit in each unit. Please refer to our website business.monash.edu for more information on the Monash Actuarial Program.

Monash Actuarial Program structure

Monash University’s actuarial program is accredited by the Institute of Actuaries Australia, and places a large emphasis on the development of practical, applicable actuarial skills. We engage with actuarial employers on a regular basis to ensure that the skills our students gain are the most relevant to employers, making our graduates highly employable.

If you’re interested in pursuing a career as an actuary we have two options on offer:

Becoming an actuary

Did you know that being an actuary is the best job in the world?

As reported in the Wall Street Journal, CareerCast.com, a US-based career website, ranked 200 jobs from best to worst based on five criteria: physical demands, work environment, income, stress, and hiring outlook.

To compile its list, the firm primarily used data from the US Bureau of Labor Statistics and other government agencies. In these rankings, six careers that require econometrics and business statistics skills were ranked among the Top 50 best jobs, including:

— Actuary (No.1)

— Mathematician (No.3)

— Statistician (No.4)

— Data Scientist (No.6)

— Economist (No. 15)

— University Professor (No. 29)

You can see the complete list of jobs at www.careercast.com/jobs-rated

How do exemptions work? There are several Monash units which cover the relevant syllabus of the CT subject (see table of units on previous page).

— Weighting percentages (as shown in the program structure) are used to determine a weighted average mark.

— For exemption the weighted average mark has to be 70% or more (when rounded to the nearer mark).

— For exemption the minimum mark in any single one of the relevant units has to be 60%.

— Exemption for each CT subject stands alone and is independent of your performance on any other units of the Monash degree(s).

— It is not necessary for you to attempt all of the units relevant for exemption for all eight CT subjects — you may decide to only cover units that are relevant to 4, or 5, or 6, or 7 CT’s.

— Exemptions are normally processed when you graduate. Upon graduation you will complete an application for exemptions. The Institute may charge a fee to register your exemptions, and in some instances exemptions may only be processed for students planning to do further actuarial exams.

How can you achieve Part II exemptions at Monash Business School?You can complete Part II exemptions at Monash in two ways:

— by completing an Honours year in the Bachelor of Commerce, or

— by undertaking a Master of Actuarial Studies.

If you’re planning to complete Part II units as part of an Honours year, you are also advised to complete at least one (or preferably both) of the following units as part of your undergraduate degree:

— Principles of econometrics

— Applied econometrics

For more information on honours and master’s degrees go to business.monash.edu/programs

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The examination system of the Actuaries Institute (Institute of Actuaries of Australia) has three parts:

— Part I requires students to sit the eight Core Technical (CT) exams of the UK Institute of Actuaries

— Part II requires students have to have achieved an “Exemption” from the Actuaries Institute Part II syllabus of studies by completing relevant units (with suitably good results) at an accredited university

— Part III requires students to study by correspondence and sit examinations that are set and marked by professional actuaries.

Part I exemptions can be achieved through the Monash Actuarial Program.

Monash Business School offers an Actuarial Program through our Bachelor of Actuarial Science degree and Actuarial Studies major, which can lead to exemptions for your professional qualifications.

For more information visit our website business.monash.edu

“Monash Business School’s actuarial program inspired me to embark on a challenging and internationally respected profession. As the roles for actuaries are being expanded beyond the traditional areas of practice – into risk management, climate change and public infrastructure – I saw endless job opportunities and a way to make a career out of my passion for mathematics. Because the program is overseen by experienced actuaries you know you are studying contemporary and relevant course content. In addition, the opportunity to network with practising actuaries through the Monash Actuarial Student Society provided insight into actuarial work across various industries. My experience of the actuarial program was very practical and enabled me to acquire the essential skills and knowledge to transition into full-time work as an actuarial analyst.”

“I had a high school teacher who advised me about the different career prospects available for students who were interested in mathematics, and actuarial science was one of them. The Monash Actuarial program included units from across different areas of actuarial science and econometrics – statistics, mathematics, finance and economics – which helped tremendously to apply the theory to practical work situations. The challenges you face and the discipline you learn in this degree gives you an edge at work, and also for future career opportunities in different industries. You’ll learn not only about the mathematical side of the industry, but also develop skills to approach problems in different ways.”

Kiyara Munaweera

Course: Bachelor of CommerceNow: Research Analyst, Transport Accident Commission

Fiona Tsang

Course: Bachelor of Commerce/Bachelor of Economics Bachelor of Commerce (Honours)Now: Actuarial Analyst, Mercer

What our graduates say...

The information in this brochure was correct at time of publication (August 2015). Monash University reserves the right to alter this information should the need arise. You should always check with the relevant Faculty office and Monash website when considering a course. CRICOS Provider: Monash University 00008C