The path to becoming an actuary involves going through a well-structured education plan. This involves university-level education and post-university examinations, as well as other requirements. Typical questions always raised by school leavers interested in actuarial science are what is the next step, and what’s up with the different societies/institutes? Currently, in ASM, we have many actuarial graduates in the midst of examinations from the major professional bodies stated below. Apart from passing the examinations, there are also practical experience requirements and residential courses to be attended. These ensure that actuaries are not only technically capable, but are also aware of other professional requirement such as Code of Conduct and ethical workplace behaviour. We hope the short description here would help school leavers to understand more of the different options they have. The road to being a qualified actuary is long, but incredibly rewarding!
Major professional bodies are:
- Society of Actuaries – United States
- Casualty Actuarial Society – United States
- Institute and Faculty of Actuaries – United Kingdom
- Institute of Actuaries of Australia
SOCIETY OF ACTUARIES (SOA) – United States
Preliminary Education Component – Consists of five papers:
- Exam FM Financial Mathematics (same as CAS Exam 2)
- Exam MLC Actuarial Models – Life Contingencies Segment
- Exam MFE Actuarial Models – Financial Economics Segment (Completion of MLC and MFE will entitle candidate credit for CAS Exam 3)
- Exam C Construction and Evaluation of Actuarial Models (same as CAS Exam 4)
Validation by Educational Experience – Validation of these topics is required in addition to the four Preliminary Education examinations (P/1, FM/2, MCL, MFE and C/4). The SOA, CIA, and CAS have implemented VEE requirements for the following topics:
- VEE – Applied Statistical Methods
- VEE – Corporate Finance
- VEE – Economics
The VEE topics are no longer tested on the preliminary exams. Candidates with credit for Course 2 earned prior to 2005 have been given credit for VEE – Economics and VEE – Corporate Finance topics.
Candidates with credit for Course 4 earned prior to 2005 have been given credit for VEE – Applied Statistical Methods.
NOTE: VEE topics are not prerequisites for the preliminary examinations. They need not be completed prior to writing any of the preliminary exams and may be fulfilled independently of the preliminary exam process.
Credit for VEE can be obtained through various courses completed from colleges or other education programs. Within Malaysia, candidates can gain credit via the following Universities:
- Universiti Malaya
- University Kebangsaan Malaysia
- University Tungku Abdul Rahman
- University Teknologi MARA
Fundamentals of Actuarial practice (FAP) – Web-based course comprising eight modules and two assessments:
Modules:
a) Module 1 – Introduction / The Role of the Professional Actuary
b) Module 2 – Core External Forces
c) Module 3 – Risk in Actuarial Problems
d) Module 4 – Actuarial Solutions
e) Module 5 – Actuarial Models
f) Module 6 – Model Selection and Solution Design
g) Module 7 – Selection of Initial Assumptions
h) Module 8 – Monitoring Results and Completing the Control Cycle
Assessments:
a) First Assessment upon completion of Modules 1 to 5
b) Final Assessment upon completion of Modules 6 to 8
Associate Professionalism Course (ACP) – Half day course covering professionalism, ethics and legal liabilities. Upon completion of the Preliminary Education Component, VEE, FAP and ACP, the candidate will obtain the title of Associate of the SOA (ASA).
To proceed from Associate to Fellow in the SOA, additional courses have to be completed:
- Two FSA Modules in one specialty track
- One Company / Sponsor Perspective (CSP) paper and One Design and Pricing (DP) paper from one of the following areas:
a) Finance: Advanced Finance and ERM (CSP) / Financial Economic Theory (DP)
b) Enterprise Risk Management (ERM): Advanced Finance and ERM (CSP) / Financial Economic Theory (DP)
c) Investments: Advanced Portfolio Management (CSP) / Financial Economic Theory (DP)
d) Group and Health: Group and Health CSP Exam / Group and Health DP Exam
e) Individual Life and Annuities: Individual Life and Annuities CSP Exam / Individual Life and Annuities DP Exam
f) Retirement Benefits: Retirement Benefits CSP Exam / Retirement Benefits DP Exam
- Decision Making and Communication (DMAC) Module
- Fellowship Admissions Course (FAC)
CASUALTY ACTUARIAL SOCIETY (CAS) – United States
In general, CAS has a similar preliminary exam structures as SOA. Candidates are required to complete the following three VEE subjects:
- VEE – Applied Statistical Methods
- VEE – Corporate Finance
- VEE – Economics
Credit for VEE can be obtained through various courses completed from colleges or other education programs. Within Malaysia, candidates can gain credit via the following Universities:
- Universiti Malaya
- University Kebangsaan Malaysia
- University Tungku Abdul Rahman
- University Teknologi MARA
There are 9 exams to be taken with the first three (Exam 1, 2 and 4) being equivalent to SOA.
- Exam 1 Probability (same as SOA Exam P)
- Exam 2 Financial Mathematics (same as SOA Exam FM)
- Exam 3 Statistics and Actuarial Models
- Exam 4 Construction and Evaluation of Actuarial Models (same as SOA Exam C) (At this level, students interested in Life Insurance can opt to continue with the SOA path.)
- Exam 5 Introduction to Property and Casualty Ratemaking
- Exam 6 Reserving, Insurance Accounting Principles, Reinsurance, and Enterprise Risk Management
- Exam 7 Nation Specific: Annual Statement, Taxation, and Regulation (Canada and USA) Course on Professionalism – A two-day course to present candidates with real situations that contain ethical and professionalism issues for an actuary. Candidate must have finished 5 exams and VEE, or 6 exams before attending this course. Upon completion of all the above requirements, candidate will be admitted as an Associate of the Casualty Actuarial Society (ACAS).
- Exam 8 Investments and Financial Analysis
- Exam 9 Advanced Ratemaking, Rate of Return, and Individual Risk Rating Plans
INSTITUTE AND FACULTY OF ACTUARIES (IFA) – United Kingdom
Core Technical (CT) Stage – Comprises of eight papers and a business awareness module:
- CT1 Financial Mathematics
- CT2 Finance and Financial Reporting
- CT3 Probability and Mathematical Statistics
- CT4 Models
- CT5 Contingencies
- CT6 Statistical Methods
- CT7 Business Economics
- CT8 Financial Economics
- CT9 Business Awareness Module: 2 day residential course, addresses business problems and professional responsibilities
Core Applications (CA) Stage – Comprises of two papers and two modules involving attendance at a 2-day residential course:
- CA1 (Paper 1) Actuarial Risk Management: Assets
- CA1 (Paper 2) Actuarial Risk Management: Liabilities and Asset-Liability Management
- CA2 Model Documentation, Analysis and Reporting
- CA3 Communications
Specialist Stage – Require completion of two Specialist Technical (ST) papers and one Specialist Applications (SA) paper:
- Specialist Technical subjects:
a) ST1 Health and Care
b) ST2 Life Insurance
c) ST4 Pensions and Other Benefits
d) ST5 Finance and Investment A
e) ST6 Finance and Investment B
f) ST7 General Insurance: Reserving and Capital Modelling
g) ST8 General Insurance: Pricing
h) ST9 Enterprise Risk Management
- Specialist Applications subjects:
a) SA1 Health and Care
b) SA2 Life Insurance
c) SA3 General Insurance
d) SA4 Pensions and Other Benefits
e) SA5 Finance
f) SA6 Investment
UK Practice Modules – A multiple choice examination testing the candidate’s knowledge in the general principles of UK Financial Services, business practices, regulation, legislation and professional guidance notes.
Work-Based Skills (WBS) – Practical experience requirement monitoring the development of the candidate in several key areas, supervised by an approved mentor.
Candidates may obtain exemptions from some of the above examinations through university courses in UK:
- City University, London
- University of Kent, Canterbury
- London School of Economics, London
- Heriot-Watt University, Scotland
The list above is by no means exhaustive. Please refer to the Institute and Faculty of Actuaries website for more information.
INSTITUTE OF ACTUARIES OF AUSTRALIA (IAA) – Australia
Part I – Identical to the CT1 to CT8 of the Core Technical Stage in the Institute and Faculty of Actuaries – United Kingdom program. They can either be completed by sitting for examinations directly from the Institute or via courses from the following universities:
- Australia National University, Canberra
- Macquarie University, Sydney
- University of Melbourne, Melbourne
- University of New South Wales, Sydney
Part II: The Actuarial Control Cycle – This part comprises of two papers. They can only be completed through courses from the above mentioned universities. Upon completion of Part I and Part II, the candidate will gain the status of Associate of the IAAust (AIAAust).
Part III – Four papers which have to be taken directly from the Institute:
- Module 1 – Investments (Compulsory)
- Module 2 and 3 – Choice of:
a) Life Insurance (Part A and B)
b) General Insurance (Part A and B)
c) Superannuation and Planned Savings (Part A and B)
d) Investment Management and Finance (Part A and B)
- Module 4 – Commercial Actuarial Practice (Compulsory)
Professionalism Course – Two-day residential course, highlighting the obligations, risks and legal responsibilities of being a member of the IAAust.
Practical Experience & Mentor Program – To fulfil the one-year practical experience requirement under the supervision of an approved mentor.
