1. 6PM, WEDNESDAY, AUGUST 24, 2016 110 BUSINESS Actuarial Science Major Forum Last edited 7.17.16

2. Topics Introductions Career Opportunities Penn State Courses Actuarial Exams & VEE (& transition rules) Actuarial Science Club Internships Questions

3. Penn State Actuarial Program # 1 Job in US (per WSJ )per WSJ # 1 School for Recruiters ( per BusinessWeek)per BusinessWeek Largest actuarial program in US  About 150 exam passers per year  About ½ from Smeal and 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, choose another major  Students with A’s in Calculus and Probability: pass exams, get jobs  Only 7% of students without exams, got a job last year.  Some employers (& grad schools) only look at students with GPA > 3.5  Take STAT 414 & SOA Probability Exam in Third Semester & RM 410 & FM in Spring  Eberly students can transfer to UP early to take STAT 414  We enforce the STAT 414 prerequisite for RM 410  Poor grades in Calculus can hurt your GPA. If GPA< 3.20, it can block you from getting into any Smeal Major, so only try Actuarial Science if you are really good in Math

4. Faculty & Club Officers 4 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 410 (Financial Math) in Spring  Teaches RM 412 (Pricing Life Insurance) in Fall Zhongyi Yuan, PhD & ASA  Teaches RM 410 (Financial Math) in Fall  Teaches RM 420 (C Exam = P&C and Health) in Spring Nan Zhu, PhD & 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, PhD & Dave Cather, PhD  Teach Insurance and Risk Management

5. The Good We Do For the World 5 Mutual Benefit Societies cared for Widows & Orphans Captains could build new ships & continue commerce Banks can make loans for tall buildings after 9/11 Actuaries’ project future so Insurers can fulfill promises, stay solvent, & create products so:  You needn’t worry about needing an expensive operation  Parents needn’t worry about the financial consequences to their kids of parents dying early or becoming disabled  Car owners can get a new car if someone crashes into them  Homeowners needn’t worry about home burning down, or floods  Retirees don’t outlive their assets  Companies won’t go under if sued

6. Club Officers OfficerPositionInternship Steve Kowalski sjk5439@psu.edusjk5439@psu.eduPresidentAon Hewitt – Chicago, IL Max Guo axg5403@psu.eduaxg5403@psu.eduVice PresidentAIG – New York, NY Jiaxin Liang jxl5730@psu.edujxl5730@psu.eduTreasurerFalls Lake Insurance – Raleigh, NC Tarek Kerbag txk5136@psu.edutxk5136@psu.eduSecretaryCIGNA – Philadelphia, PA John Miller jzm5886@psu.edujzm5886@psu.eduCorporate LiaisonCIGNA – Bloomfield, CT John Gilinger jdg5498@psu.edujdg5498@psu.eduCorporate Outreach OfficerCIGNA – Philadelphia, PA Terron Graham tcg5103@psu.edutcg5103@psu.eduStudent Relations LiaisonBuck Consultants – New York, NY Tong Guo ​ tvg5155@psu.edu ​ tvg5155@psu.edu Social ChairPwC – New York, NY Cathy Wang lyw5228@psu.edulyw5228@psu.eduInternt’l Student ChairTowers Watson – Washington DC Christa Chen dqc5314@psu.edudqc5314@psu.eduWebmasterKPMG – New York, NY Zekun Zhang ziz5124@psu.eduziz5124@psu.eduDatabase ManagerExcellus BC/BS – Syracuse, NY Please feel free to email officers after talking to your mentor. You can get a mentor by using Google doc of Mentors or emailing Terron Graham.

7. Where Do Actuaries Work? Insurance 12-18 Month Rotational Programs Competitive study programs Clear reporting structure (one boss), Reasonable hours Consulting, Investment, and Accounting Firms May have longer hours – especially during busy season Dynamic work environment Government & Academia Industry Life/Annuity Health Retirement Property/Casualty Reinsurance Finance/Investment Practice Area

8. Get Started Early!

9. Success in the Classroom and the 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)

10. International Students International students get jobs in US  CPT/OPT/H1-B/Green cards/Eb5 really help  If citizen or permanent resident, put near top of resume Communication as important as exams  Join HW groups with US students  Talk English all the time!  Having US roommates has worked well Important to pass Exam P & FM in Sophomore year 3 exams to get Full-Time Job Attend upcoming meeting for International Students If can’t get internship or FT job  Try grad school (need good GPA), and then easier to get job PSU has Masters in Applied Statistics (MAS), and then you can be a TA with us

11. Sample Schedule with Stat Minor YrFallSpring 1 st MATH 140* (Calc I) ECON 102 (Micro) - VEE MATH 141* (Calc II) ECON 104 (Macro) – VEE ACCTG 211 (Accounting–FIN 301 Pre-req)-VEE 2 nd MATH 231* (Calc III) STAT 414* (Prob Theory),RM 297& P Exam in Jan FIN 301 (Corp Finance) –VEE R M 410* (Financial Math) Excel Take FM in June STAT 416# (Stochastic Processes) helps RM415/S 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) MATH 220 (Matrices) helps in 412/MLC 4 th R M 412* (Life Contingencies) Take MLC in late October STAT 462# (Regression Analysis) RM 420* (P&C/Health) Stat allows as substitute or RM401*(Pensions) STAT 463# (Applied Time Series) R Take C Exam in June or CAS S Exam in Oct Or take Math 231 in summer at UP or World Campus Placing out of a course helps you take ACCTG 211 (or 211H) in 2 nd semester & FIN 301 in 3 rd semester * C or better required. If C’s, consider other options or majors # for STAT minor; 462/463 already needed for VEE & S. P&C and Health insurers tell us that STAT 483 and Data Analytics courses will help you get a job

12. Alternate Schedule with Stat Minor YrFallSpring 1 st MATH 141* (Calc II) ECON 102 (Micro) - VEE MATH 231* (Calc III) ECON 104 (Macro) – VEE ACCTG 211 (Accounting–FIN 301 Pre-req)-VEE 2 nd 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 STAT 416# (Stochastic Processes) helps RM415/S 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) MATH 220 (Matrices) helps in 412/MLC 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 RM401*(Pensions) STAT 463# (Applied Time Series) R Take C Exam in June or CAS S Exam in Oct 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 can apply to ActSci Option & if admitted may schedule RM 410 (if have STAT 414 prerequisite). If 5 on AP exam, you can place out of MATH 140 (to take 231/414 sooner). If you got a 4, see this website on whether to place outthis website Can take Math 231 in Summer at World Campus or UP, or concurrent with STAT 414. Placing out of courses helps you to take ACCTG 211 in 2nd semester and FIN 301 in 3rd 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

13. Smeal Major Required Courses Risk & Decisions R M 301* (Fall Only) Risk Management & Insurance R M 320W* (Spring Only) Life & Health Insurance RM 430* (Fall Only) * C or higher required

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

15. 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)  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 reference

16. Math Major -Actuarial Option Additional Mathematics & Statistics courses:  MATH 230 instead of MATH 231  MATH 311W & 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, 201C: Computer Programming  IE 425: Operations Research  RM 415: Pricing Derivatives or 420: Loss Models (ask) reference

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

18. Courses in Predictive Analytics (Data Science) 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) GLM: STAT 511 and someday in STAT 462 (taken for VEE) SAS: STAT 483 much preferred (has some SQL) Monte Carlo: STAT 440 and 416, RM 411/412/415 (taken for MLC/MFE) Machine Learning (Decision Trees, Clusters, Neural Networks, Classification): CMPSC 448 & STAT 557 & https://www.coursera.org/learn/machine-learning Data Mining/Visualization: STAT 380 CMPSC448 pre-req = CMPSC 121/122 Python Survey sampling: STAT 466 STAT 440 pre-req = MATH 220 Bayesian Comp Tech/MCMC/Bootstrapping: STAT 440 (Computational Stat) Principal Components Analysis to reduce dimensions of data: STAT 505 (Multivariate Stat) 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 reference

19. Other Good Courses to Take If controls allow (e.g., Eberly students can’t take FIN 305/408)  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 instead https://sites.google.com/site/lougattis/financial-modeling-files reference

20. Courses with Programming  RM 297C/410/411/412: Excel & VBA & R  STAT 462/463: some Minitab, R, or SAS may be used  STAT 483: SAS & SQL - great for Health and P&C jobs  STAT 497: R  CMPSC 121/122 Intro to Computer Programming (Python?)  CMPSC 200: MATLAB  CMPSC 203: Excel with some Access  MATH 451: MATLAB used lynda.psu.educan also help with VBA lynda.psu.edu reference

21. Actuarial Exams Given in Harrisburg, Philly, Pittsburgh Or near your home over summer/winter breaks, by:  Society of Actuaries (SOA)  Life/Pension/Health/Enterprise Risk Mgmt  MLC Exam is given at PSU  Casualty Actuarial Society (CAS)  Property/Casualty SOA exams satisfy CAS  Except MLC does not satisfy the CAS Exam S

22. Why should I take these exams? To get internships Internship + 3 exams for FT job Take FM Exam right after RM 410  Use breaks to pass exams  Tough passing FM exam when in RM 411 We cover all preliminary exams here  Some students pass all before graduation 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

23. SOA/CAS Exams ExamCourse(s) Best Manual Use during course too Take it when?Comments 1/P - Probability Theory STAT 414 & RM 497C ACTEX, SOA Q, ADAPT, Actuary Exam Tutor Sophomores: Jan 2/FM - Financial Mathematics (with Swaps) RM 410ASM or ADAPT Sophomores: June Juniors: Dec Intro to Derivatives moved to MFE Summer 17 3F/MFE – Financial Econ 2018:Investment &FinMkts RM 415ASM or ADAPT Late November or July 415 done by late Nov StochasticCalc → FSAexam MLC - Life Contingencies 2018: Long-Term Act Math RM 411/412Infinite Actuary Late October Early May Only 411 LC needed for CAS S exam 4/C – P&C and Health Ins 2018: Short-Term Act Math RM 412/420 STAT 415/416 Infinite Actuary or ASMJune 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? Tutorials at http://instruction.bus.wisc.edu/jfrees/UWCAELearn/default.aspxhttp://instruction.bus.wisc.edu/jfrees/UWCAELearn/default.aspx SOA policy on calculators: https://www.soa.org/education/exam-req/exam-day-info/edu-calculators.aspxhttps://www.soa.org/education/exam-req/exam-day-info/edu-calculators.aspx Some prefer TI 30X II. BA II Plus preferred for FM exam for its financial keys reference

24. Validation by Educational Experience: VEE Required by SOA, CAS, & Employers ECON 102/104 & FIN 301 required to graduate  ACCTG 211 (new VEE after 7/1/2018)  Math Majors can take in Spring, per Steve Huddart 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

25. Applied Statistical Methods: VEE → Exam2018  Accepted Courses: take one from each  Applied Regression  STAT 462, STAT 501, or ECON 306  ECON prerequisites can be satisfied by Stat 414  Applied Time Series  STAT 463 (STAT 510 or ECON 483 if available)  You can mix and match.  Must include Generalized Linear Models starting 2018  Get STAT Minor - if also take:  STAT 415 (Mathematical Statistics) VEE in 2018 already required in Eberly  STAT 416 (Stochastic Processes) maybe  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)

26. Best Practices to Learn & Pass Exams 26 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

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

28. Changes starting 7/1/2018  Mathematical Statistics (STAT 415)  New required VEE course. Drops Mathematical Stat from C exam  Applied Statistics (STAT 462/463)  Elevated to Statistics for Risk Modeling (SRM) Exam.  Take STAT 462/3 before 7/1/2018, as it will waive exam!  Exam will include Generalized Linear Models (GLM)  Predictive Analytics (PA)  New Proctored Project (using R?)  SOA thinks students will wait until after graduation  Exam MLC  Creating Mortality Tables moving from C to MLC  Exam C  Reserving and Ratemaking (pricing) being added to Exam C.  Including Loss Development Factors and Triangles?  ASA by 7/1/18, FSA by 7/1/2022: exempt from new rules (PA!)  Applied Stat & Exams by 7/1/18 transfer to comparable exams  FIN 301 qualifies for Fin VEE thru 7/1/2019

29. Actuarial Science Career Fair Monday 9/19/16 from 4 to 7:30 PM in Atrium Over 35 companies Great place to find Internships  1 st yr students can get internships without exams if very good in Math To Attend:  Must do Mock Interview with Mentor  GPA>3.20, or A’s in Calculus, or Exam Passed  Pay Club Dues Some firms (like Met Life, NY Life, and AXA) don’t attend Career Fairs, so apply on their websites

30. Club Opportunities Special Meeting for Commonwealth/Transfer Students  Thursday 8/25: 7:30 – 8:30 PM in 010Business Special Meeting for International Students  Monday 8/29: 6 – 7:30 PM in 107 Business  Ideas for internships, jobs, grad school (e.g., MAS) Résumé & Mock Interview Workshop  Wednesday 8/31: 6 – 8 PM in 112 Forest Resources Bldg  Put resumes on SmealConnect/NLCN soon  Must use instructions on Club’s Resume webpage  RM 410 students must finish mock interview ASAP Mentors for Juniors (& interested Frosh/Soph)  If interested, email Terron Graham TCG5103@psu.edu

31. 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: Academy President on 10/6 at 6pm THON involvement Social Events Panel Discussion of Alums from all Practice Areas

32. Actuarial Science Club Club website: http://www.psuactsci.com/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

33. Questions?