What is Actuarial Science?
Actuarial science is a discipline that assesses financial risks in the insurance and finance fields, using mathematical and statistical methods. Actuarial science applies the mathematics of probability and statistics to define, analyze, and solve the financial implications of uncertain future events. Actuaries primarily work in quantitative business roles related to risk management, insurance, consulting, analytics, and finance.
Examples of Actuarial work (Source: https://www.soa.org/future-actuaries/career-paths/)
“Risk comes in many forms. Everybody and every organization faces risk. An actuary is someone who measures and manages risk"
Actuarial Program at UMass Amherst
The Department of Mathematics and Statistics offers several courses to prepare students for an actuarial career, including courses to prepare for the first two actuarial exams, as well as all of the VEE requirements. We are one of only three institutions in Massachusetts on the 2018 UCAP list maintained by the Society of Actuaries.
The actuarial societies require several courses as part of the process of obtaining certification within the profession. These courses are known as Validation by Educational Experience (VEE). As of July 1, 2018, the areas and courses are:
Economics: Microeconomics (Economics 103) and Macroeconomics (Economics 104)
Mathematical Statistics: Statistics 515 and 516
Accounting and Finance: Accounting 221 and Finance 301.
Math majors who have declared the Actuarial concentration may contact Jacob Lagerstrom to submit a request to be enrolled in Accounting 221 or Finance 301. Requests for enrollment should occur during advising week.
Actuarial Exam Courses
UMASS Department of Mathematics and Statistics offers several courses related to the actuarial exams:
Exam P/1: This is an exam covering probability. Math 536 is a course dedicated to preparing students for the exam. The underlying material is covered in Stat 515 and Math 233 and a few students have taken the exam after completing just those courses by studying on their own.
Exam FM/2: The updated version of this exam covers just the interest rate theory material. Math 437 is dedicated to preparing students for this exam. Some of the material is also touched upon in Finance 301.
IFM/3: Math 537 covers a portion of the subject matter of this exam, but 537 is not an exam preparation course per se. Some topics are covered in Finance 301
Exam SRM (Statistics for Risk Modeling): This is one of the two components of the new curriculum that is devoted to predictive analytics education. It provides the transition from mathematical statistics as presented in the Probability Exam and Mathematical Statistics VEE to predictive analytics and its applications. It covers the regression and time series topics formerly in the Applied Statistics VEE subject. Stat 525 and Stat 535 will be helpful preparation for this exam.