Introductory Seminar on Actuarial Science Aimed at Freshman and - - PowerPoint PPT Presentation
Introductory Seminar on Actuarial Science Aimed at Freshman and Sophomores Course Description and Objectives : A seminar for students interested in actuarial science. Topics include career information and examples of problems that actuaries work
Course Description and Objectives: A seminar for students interested in actuarial science. Topics include career information and examples of problems that actuaries work on. Meetings will include guest presentations from working actuaries and group projects. Seminar students will hear about other experiential opportunities with the insurance industry.
Genesis of the Introductory Seminar
Semester Conversion Started offering courses covering material for exams P and FM.
Exam Support
Created 1 credit hour exam prep course for exams P and FM. Began reimbursing fees for students who pass exams.
Title 04
Ohio Actuarial Science Consortium Scholarship program developed with targeted academic enhancements. Proposal submitted to the Ohio Department of Higher Education.
Proposal Funded
Advisory board created; first meeting held. Scholarships offered. Attended SOA ATC 2017. Fall activities planned.
Actuarial Seminar Begins
Seminar offered to incoming math majors and others. 20 students enroll.
2012 2014 2016 2017 (Fall) 2017 2013 2015
Help students assess actuarial science as a career option Describe the requirements to become an actuary. Explain how to apply for an internship. Incorporate active learning using mini‐ projects involving actuarial concepts Develop Excel skills in the context of problem‐solving Include presentations by local actuaries Be accessible to entering freshman (calculus not assumed)
SOA Actuarial Teaching Conference 2017 Actuarial Advisory Board Old (2006) Excel Labs from Purdue University’s MA/STAT170 Adam Butt’s Introduction to Actuarial Science course on edX CAS Case Studies (access requires CAS Academic Central membership) Senior capstone student Katelyn Evans
Brief instructor presentations on actuarial concepts and examples Mini‐projects on actuarial problems (most done entirely in class) using Excel Presentations by actuaries working at local companies (occasional remote presentations) Internship panel (students who had actuarial internships over the previous summer) Advice on actuarial exams, required and recommended courses, VEE requirements
The actuarial profession and its impact on society Introduction to life insurance: an actuarial perspective The analytics of pricing insurance My career as a pension actuary Of reinsurance and reserving A very brief introduction to property insurance Life as a health actuary Actuarial science: a career worth considering
Setting Premiums
Project: Pirate Peril
Random Frequency
Project: Randomized Pirate Peril
Random Severity of Loss
Project: Cell Phone Warranty
I liked how you made this concept simple I liked how the 2nd project took the 1st one deeper Easily understood context The warranty project gave me a good understanding
used to predict losses The 1st project was a good intro I learned a lot about data analysis with Excel through the warranty project
Pivot Tables
Instructions: Using the data in the Insurance Data spreadsheet (fictitious data), create the Pivot Tables called for below. The final product will be a report that incorporates and discusses these tables. Your report should be written in complete sentences and designed as if you are an actuary communicating findings to your manager.
Issue State and by Agent.
Independent Homework Project
Company Product Face Amount Rider Face Amount Issue Age Issue State Gender Risk Class Agent ID Summit Life Variable Annuity 750000 28000 35 CA M Standard Smoker 41 Summit Life Variable Annuity 130000 249000 23 NC F Preferred Nonsmoker 16 Horizon Life Term Life 790000 64000 50 OH M Standard Nonsmoker 12 Horizon Life Immediate Annuity 540000 29000 42 KY F Super Preferred Nonsmoker 42 Summit Life Term Life 100000 206000 42 TX M Standard Nonsmoker 49 Summit Life Immediate Annuity 550000 95000 31 OH F Super Preferred Nonsmoker 1 Summit Life Whole Life 790000 294000 37 FL F Super Preferred Nonsmoker 31
Loss
Development
Starting with this table, students
Pivot table
selected loss development factors
reserve estimate
(This was a challenging project for the students)
Project: Computing Total Reserves
Accident Year Paid Year Amount 2011 2011 $403,082 2011 2012 $285,460 2012 2012 $229,968 2011 2013 $119,560 2012 2013 $137,501 2013 2013 $175,320 2011 2014 $109,156 2012 2014 $34,367 2013 2014 $128,599 2014 2014 $226,710 2011 2015 $152,280 2012 2015 $25,442 2013 2015 $44,567 2014 2015 $99,574 2015 2015 $275,881 2011 2016 $54,924 2012 2016 $1,072 2013 2016 $8,001 2014 2016 $38,556 2015 2016 $129,815 2016 2016 $137,245 2011 2017 $42,754 2012 2017 $0 2013 2017 $36,699 2014 2017 $2,858 2015 2017 $40,164 2016 2017 $101,023 2017 2017 $140,913
* Loss Development Factors Accident Year 12 to 24 24 to 36 36 to 48 48 to 60 60 to 72 72 to 84 2011 2012 2013 2014 2015 2016 Simple average Last 3 Average Average X Hi/Lo ighted Average 12 to 24 24 to 36 36 to 48 48 to 60 60 to 72 72 to 84 84 to ultimate Selected 12 to ult 24 to ult 36 to ult 48 to ult 60 to ult 72 to ult 84 to ult Cumulative Loss Reserve Estimate Accident Year 2011 2012 2013 2014 2015 2016 2017 Total
Paid losses @ 2017 Cumulative Loss Factor Indicated Ultimate Loss
(ultimate loss minus paid losses)
Sum of cumulative Development Accident Year 12 24 36 48 60 72 84 2011 $403,082 $688,542 $808,102 $917,258 $1,069,538 $1,124,462 $1,167,216 2012 $229,968 $367,469 $401,836 $427,278 $428,350 $428,350 2013 $175,320 $303,919 $348,486 $356,487 $393,186 2014 $226,710 $326,284 $364,840 $367,698 2015 $275,881 $405,696 $445,860 2016 $137,245 $238,268 2017 $40,913 Loss Development Factors Accident Year 12 to 24 24 to 36 36 to 48 48 to 60 60 to 72 72 to 84 2011 1.708 1.174 1.135 1.166 1.051 1.038 2012 1.598 1.094 1.063 1.003 1.000 2013 1.734 1.147 1.023 1.103 2014 1.439 1.118 1.008 2015 1.471 1.099 2016 1.736 Simple average 1.614 1.126 1.057 1.090 1.026 1.038 Last 3 Average 1.549 1.121 1.031 1.090 Average X Hi/Lo 1.628 1.121 1.043 1.103 Weighted Average 1.609 1.133 1.076 1.112 1.037 1.038 12 to 24 24 to 36 36 to 48 48 to 60 60 to 72 72 to 84 84 to ultimate Selected 1.610 1.130 1.067 1.100 1.03 1.03 1.03 12 to ult 24 to ult 36 to ult 48 to ult 60 to ult 72 to ult 84 to ult Cumulative 2.333 1.449 1.283 1.202 1.093 1.061 1.030 Loss Reserve Estimate Accident Year paid losses @2014 2011 2012 2013 2014 2015 $445,860 2016 2017 Total $459,685 $40,913 $238,268 $367,698 $393,186 $428,350 $1,167,216 $454,479.35 $1,202,232.48
Cumulative Loss Factor
1.03 2.333 1.449 1.283 1.202 1.093 1.061 $36,566 $26,129 $35,016
(ultimate loss minus paid losses) Indicated Ultimate Loss
$95,450.03 $345,250.33 $572,038.38 $441,973.00 $429,752.30 $54,537 $106,982 $126,178 $74,275
Loss development was
projects, but very interesting I liked that we did the homework on
me learn more. Very cool aspect of Excel This [Pivot tables] seems like a very important skill based
actuaries. The Pivot table project was my favorite Excel project. The feedback on the homework was helpful.
Interest and Streams of Payments
Present Value (Varying Payments)
A family wants to put aside part of an inheritance to finance a newborn’s future tuition at CINCINNATI COUNTRY DAY SCHOOL (CCDS) from Kindergarten through high school. The fund will earn interest and should be depleted after tuition is paid for 12th grade. a) Project current tuition into the future at a fixed rate of annual increase b) Determine how much money to set aside (invest) NOW to cover these future payments.
Mini-projects to introduce basic concepts
Present Value (Fixed payments)
Set up “financial calculator” spreadsheets in Excel to solve problems such as these: a) Davinder has $3,000 to use as a down- payment on a car. He can afford to pay $300 per month on a 60-month car loan. The advertised interest rate is 0.0474. How much car can he afford to buy? b) Julia wants to save $100,000 for her grandson’s college education. She will deposit money into an account earning interest of 3.5% each year on her grandson’s birthday, starting on his first birthday and ending on his 18th birthday. How much should she deposit each year?
Loan Amortization
Construct an amortization schedule for a loan with fixed payments, and determine the amount of the final payment.
The tuition project was a good way to introduce how money value changes over time I think this project is very useful. Very practical and interesting to me because I could use it in a personal context I liked that these projects applied to real life scenarios The loan amortization project was challenging It was good to learn about the math in loans
EPV and Contingent Payments
Students used British Life Tables ELT‐17 on one tab of their workbook. They used VLOOKUP to retrieve the appropriate quantities from the life table. The quantities in the boxes are inputs for the spreadsheet formulas.
Projects Using Mortality Tables
Find the present value of an annuity that pays $ Policyholder
gender starting with an immediate payment at age Assume the annual interest rate is EPV ANSWER
Assuming a person buys an annuity for $ policyholder gender at age and interest rate The annuity will make fixed payments once a year while the person is alive, starting one year from purchase. How big will the payments be? ANSWER
Applications to Life Insurance More Projects Using Mortality Tables Calculate the EPV of various insurance policy death benefits Calculate the EPV of various insurance policy premium payments Calculate the required premium for a specified life insurance policy, and adjust to account for company expenses.
I liked this because it used tables actuaries might see After we received the sheet with calculation examples, this topic was very manageable Really interesting to see how insurance companies calculate these things I I was confused at first, but now one of my favorite topics in the course
The presentations clarified my understanding of what actuaries do More homework may help just to secure the methods in
I enjoyed the Excel projects. They improved my skills on Excel and with equations. I would have gotten more out of the course if there was a textbook or outside readings It would be helpful if presentations included some interactive work for us The student internship panel was extremely helpful; I suggest you incorporate more student‐given presentations into this class. Have us do some of the projects more independently rather than as a class I feel the course should incorporate more about the basics of insurance (P&C vs Life, what underwriters do, etc.) I didn’t like the remote presentations. They were hard to follow.