Challenges and Successes in Launching a New Actuarial Science Program - - PDF document

Challenges and Successes in Launching a New Actuarial Science Program Austin Peay State University (APSU) Talking Points Slide 3

APSU mission statement: Austin Peay State University is a comprehensive university committed to raising the educational attainment of the citizenry, developing programs and services that address regional needs, and providing collaborative opportunities that connect university expertise with private and public resources. Collectively, these endeavors contribute significantly to the intellectual, economic, social, physical, and cultural development of the region. APSU prepares students to be engaged and productive citizens, while recognizing that society and the marketplace require global awareness and continuous learning. Tennessee has only one actuarial science program which covers more than two preliminary actuarial exams and only three universities (including APSU) which cover at least one actuarial

• exam. The capital of Tennessee: Nashville is a regional hub for actuarial firms

(https://www.tn.gov/commerce/insurance/captive/how‐to‐form/actuarial‐firms.html), with insurance companies such as AIG and banks. Thus an actuarial science program is a regional need which comes under the APSU mission statement. For APSU, a short term goal is set to obtain UCAP‐AC status and our long term goal is set at

• btaining UCAP‐CAE designation. What other qualitative and quantitative goals are appropriate

for a new program? APSU offers an actuarial science concentration and a minor (https://www.apsu.edu/mathematics/concentrations/index.php) with the concentration offered starting in fall 2017 and the minor starting in fall 2019 Offering a BS or MS depends on size of university Senior Administration’s focus is on growing enrollment and graduation rates. Our chair had found that in other programs, a new Actuarial Science program actually increased enrollment in both the AS and Math degree programs and did not take students away from existing programs.

Slide 4

The APSU actuarial science program is hosted in the Department of Mathematics and Statistics. We understand that the department hosting the program can change the flavor of the program. What are advantages/disadvantages of each?

Challenges:

• 1. APSU applied for UCAP‐AC status and application was rejected because some topics in

IFM syllabus were not covered and VEE accounting was not approved (which it now is)

• 2. Getting VEE classes approved.

Successes:

• 1. APSU currently holds UCAP‐IC status.
• 2. APSU offers all VEE classes and they have now been approved.

Slide 5

The accreditation agency for APSU is SACSCOC(http://www.sacscoc.org/). As far as we know, there are no program accreditation agencies for actuarial science programs. (To be a BS degree program we must graduate around 10 students per year. Accreditation by a governing group would audit a program and take a deeper look at curriculum, student learning outcomes, student experiences, faculty, etc….. With 10,954 students (enrolled in Fall 2018), Austin Peay is Tennessee’s fastest‐growing state

• university. As of spring 2019, at APSU we had 146 undergrad students who had declared math as

either a major or a minor. Out of these 146 students, 11 students declared actuarial science as their first concentration. We have 16 graduate students majoring in mathematical finance who will take at least two cross‐listed actuarial science classes. Success: APSU offers a MS in computer science and quantitative methods with mathematical finance as a concentration (http://www.apsu.edu/csci/masters_degrees/index.php). Students in this graduate program take financial mathematics (FM) and financial derivative (IFM) classes which cover two of SOA exams with the option to take other classes as electives. Challenge: Cross listed courses complicate things with the need for different learning objectives for undergrad vs grad. Currently, we expect grad students to write papers, give presentations, or complete projects in a course where the syllabus is already very full due to SOA curriculum requirements. Under the current program, undergrad students don’t engage in actuarial science courses until year 3 or 4. Challenge: How can we build interest earlier? A freshman 1‐hour Intro course? What might this look like? We also plan to provide information during department seminar series that all students attend. Offering a BS or MS depends on size of university. Offering a MS degree allows students to continue their education without changing schools. We are considering a 4+1 masters program.

Slide 6

APSU tries to cover the Exam P and FM syllabus exactly. However, APSU tried to cover more financial derivatives topics when it was offered for the first time in Fall 2018. When this syllabus was submitted to SOA to get approval for IFM exam, it was rejected. The reason for rejecting the application was missing coverage of some SOA syllabus topics. Challenge: Covering all of SOA syllabus and teaching topics in depth or covering chapters not listed on SOA syllabus. Challenge: Consistency between instructors. Challenge: covering SOA syllabus in one semester (students at a small school with only a minor or concentration cannot take multi‐course sequences.) Challenge: Adapting already approved courses to changes in SOA

• syllabus. Challenge: Administrators (who approve new courses or changes to courses) don’t

understand the subtle differences in syllabi. Program changes are hard to obtain. It seems that if your goal is to achieve SOA UCAP AC or CAE designation, then you need to follow most of the SOA syllabus exactly. Success: APSU created 3 new courses for the actuarial science concentration. These classes are MATH 4140/5140 : Financial Derivatives, MATH 4180/5180: Actuarial Mathematics I, MATH 4280/5280: Actuarial Mathematics II which covers subject content in the IFM, STAM and LTAM

• exams. However, the SOA provided feedback on MATH 4280/5280: it needs to be a two

semester course in order to cover the LTAM syllabus. When we first created a financial derivative(IFM) class, we were targeting the now retired MFE

• exam. This exam didn’t contain topics such as capital asset pricing model. Our course bulletin

says: This course covers introductory financial derivatives, general properties of options, the binomial option pricing model, the Black‐Scholes option pricing model, Greek options, risk management, and interest rate derivatives. This course prepares students for actuarial exam 3F/MFE. Now with the new IFM syllabus we need to change the course bulletin, but that won’t be possible without changing the course number. That means creating a new course. So, the best way to avoid this situation is by not adding the exam name to the bulletin. In order to accommodate new exam changes, APSU is planning to change the syllabus a little bit but keep the same bulletin description. APSU offered exam preparation classes for Exam P and FM. These classes were not official APSU classes and no credit was offered for participation. Exam preparation classes were offered upon the request of students. Challenge: Compensation for faculty leading prep courses Challenge: Instructor willingness to do prep courses at night or on weekends. (For small groups) Challenge: Lack of students to make a credit‐giving exam prep course.

Slide 7

Interdepartmental collaboration with Economics, Accounting and Finance is needed for VEE courses. Success: APSU offers all VEE courses. Success: APSU utilized existing courses for VEE requirement. Challenge: Obtaining syllabi from other departments may be challenging. From our experience, if we had to create a new course (in another department) to satisfy the VEE requirements it would be almost impossible. Challenge: Keeping up with changes to SOA’s VEE requirements.

Slide 8

Success: APSU used existing faculty to teach courses. We also had a visiting professor for one year. Challenge: One of the main challenges APSU is facing is not having faculty who had industry

• experience. When developing the curriculum, APSU faculty used the SOA syllabus as the

guideline. Challenge: Getting new faculty lines is not easy in a small school – our recent request for a new faculty line was declined. Challenge: Finding opportunities to engage existing faculty in real‐world actuarial activities. Challenge: At our university faculty teach a 4:4 load, leaving faculty with little time to study for exams or engage in research. Challenge: No funding or release time is available to faculty to obtain additional Actuarial Science designations. Challenge: Obtaining Actuarial Science designations is not part of our faculty RTP guidelines.

Slide 9

Success: Designing a new department brochure to include the new actuarial science concentration.

Challenge: Students are advised by faculty who are not from math department. These faculty members may not be aware of the newly developed actuarial science program. Current students who are not majoring or minoring in mathematics may not get the information regarding the newly developed actuarial science program. Challenge: Can current students change their major and graduate within 4 years with the new actuarial science concentration? What is the impact to financial aid when changing to new concertation?

Slide 10

Success: APSU created the actuarial science minor for students who are majoring in computer science, business, finance, accounting, physics, economics or engineering. This is very useful for existing students who do not have time to complete the full requirements of an actuarial science concentration. Challenge: Others departments may not advertise the actuarial science program at the department level or encourage their students to pursue a minor in actuarial science.

Slide 11

Success: CASE grant from Casualty Actuarial Society. The grant proposal included funds for:

• 1. Actuarial Science Awareness Programs for High School Students in Montgomery county

(where APSU is located) (Eight high schools)

• 2. Actuarial Science Seminar Series for the University Students
• 3. Establish an Exam Preparation Material Library for Preliminary Exams
• 4. Exam Fee Reimbursement for exam P and FM

Challenge: Bringing the awareness of actuarial science program to students in other counties of TN and to out‐of‐state students. Working professionals prefer weekend classes/online classes or evening classes. Conducting these classes is challenging with limited faculty members. Challenge: Building a new webpage with university constraints.

Slide 12

Challenge: APSU does not have an advisory board for actuarial science yet. One of the main challenges we are facing is getting in contact with working actuaries. We would like to have people with industry expertise to be in our advisory board. Also not having an alumni base for an actuarial science program makes it harder to make a good advisory board.

Success: Use the existing advisory board for mathematical finance and add two actuary professionals – we will be doing this in the fall. Success: We have submitted a request to CAS for a university liaison. Will request a liaison from SOA soon.

Slide 14

Most of APSU students are not taking SOA/CAS exams as of now. The main concern is cost (we do not have any reimbursement program for Exam P or FM). Most students want to get a job or internship and then take the exams. Around 10 students participated in exam preparation classes but only a few registered for the exam. Thus motivating students to take exams is one of the main challenges we face right now. Challenge: Cost to students of exams. Challenge: Student motivation to take exams. Challenge: Obtaining UCAP‐IC Status – benefits include some reimbursement for exam fees and materials for students. Success: Case grant will cover exam reimbursement for 3 students per semester (total of 6) for 2019‐2020 academic year. Success: In our first year, two students have passed Exam P and two have passed exam FM. One student is taking FM this summer. We had around 4‐7 students who attempted but did not pass exams in the first year.

Slide 15

Success: Two students got summer internships at Tennessee Treasury. Success: APSU received access to eight Bloomberg terminals last semester. This fall, these terminals will be utilized in the financial derivative class and the financial mathematics class. Success: Undergraduate research projects:

• 1. Katherine, K., Summarizing 2007/2008 financial crisis, Senior Project, Spring 2019
• 2. Austin Strickland, Deterministic and Stochastic mortality models, Senior Project, Spring

2019

• 3. Brewer, M., Population projection for Clarksville‐Montgomery County, Senior Project, Fall

2017 and presentation at Tennessee Academy of Science annual meeting (third place)

• 4. Five students submitted intent to compete in SOA Research case Study challenge in 2018.

However, students were not able to complete the task by the submission due date. Graduate presentations:

• 1. Tinchie Fogne, Stevye, A Comparison of Interest Rate Models ,presentation at Tennessee

Academy of Science annual meeting, Fall 2018

• 2. Tinchie Fogne, Stevye, Modeling yield rates on US bonds, Fall 2017

Challenge: Connecting students with actuarial firms for internship opportunities.