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Department of Mathematics & Statistics


Actuarial Science at Texas Tech University

Introduction

Actuarial Science (AS) is an interdisciplinary field combining knowledge and methods from: statistics, mathematics, finance, and economics. The core function of an actuary's job is to assess and quantify financial/economic risk.

AS is increasingly viewed as a desirable career by students in the mathematical sciences. The high starting salaries, which reflect the rigorous and lengthy training demanded of the prospective actuary, are part of the reason for this interest. This training requires one to pass a series of established (society) exams, leading to the two major milestones of: Associateship (at least 5 exams), and Fellowship (several more exams). For life, health, and pension actuaries, exams are given by the Society of Actuaries (SOA). For property and casualty actuaries, the exams are administered by the Casualty Actuarial Society (CAS). Candidates will need to specialize their training early on in their career path, either SOA or CAS.

The purpose of this site is to concisely describe the options available to TTU students in order to prepare for a career in AS. Links to other sites that more fully explain the functions and other details of the profession are provided.

Preparing for a Career in Actuarial Science (U.S.A.)

In order to secure an entry-level position, a candidate is currently expected to have passed at least one of the preliminary exams, as well as have acquired validation through education experience (VEE) credits in 3 areas (required by SOA). The exams are offered at appropriate times (twice each year in the Spring and Fall) and locations (most major cities and college campuses). The VEE credits can be acquired by taking appropriate college courses.

CAS exams 1,2, and 4 are the same as SOA exams P, FM, and C, respectively. But CAS exam 3F-3L does not correspond exactly to SOA exam MFE-MLC, so at this point the candidate may already have to choose a specialty, either SOA or CAS.

Undergraduate Preparation

The Mathematics & Statistics Department now offers a minor in Actuarial Science; these students are advised by Dr. Alex Trindade. The minor requirements can be satisfied by taking any 6 courses from the following list, where boldface courses are required (prerequisites are shown for quick reference):

Notes. ECO 2301 and AAEC 2305 cannot both be counted. Similarly with ECO 4305 and AAEC 4302. The ACCT 2300-2301 prerequisite for FIN 3320 is waived for MATH majors. Keep in mind that any given course cannot simultaneously be counted toward the major and the minor (i.e. there must be no overlap between the major and minor lists of courses).

As an example, a typical MATH major, after picking up all the necessary prerequisites, might satisfy the minor by taking the following (not necessarily in this order): ECO 2301, ECO 2302, MATH 2356, FIN 3320, FIN 3322, MATH 4342.

In order to fit the minor into your graduation plan, note/check carefully the prerequisites for each course, and when these courses are offered. MATH 2356 (Quantitative Theory of Interest) is a new course that will be offered for the first time in Spring 2010. In fact, AS-aspiring students should plan to take all of these courses, since:

To officially obtain VEE credit for a given subject, the student may have to apply for it through SOA after taking the courses.

Graduate Preparation

For those that are serious about AS but are not in a hurry to start working, or perhaps have not been able to secure an entry-level position, completing a Masters degree in Statistics is good idea. Here are a few compelling reasons:

For those undergraduates wishing to pursue the Masters option, the Mathematics & Statistics Department offers a 150-hour combined B.A.-M.S. or B.S.-M.S. degree program, as well as a stand alone M.S. in Statistics.

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