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Actuarial Preparation Minor Information

If you are a Cal Poly student interested in pursuing an Actuarial career, there is a PolyLearn page that has more information on the career and respective exams. If you would like additional information about the minor please email Dr. Kevin Ross.

Minor Advisor

Advisory Board

  • Dr. Matt Carlton, Statistics
  • Dr. Lawrence Sze, Mathematics
  • Dr. Jeff Sklar, Statistics
  • Dr. Cyrus Ramezani, Finance

Admission to the Actuarial Preparation minor program requires successful completion of the following classes: ECON 221 or 222; MATH 142 or equivalent; and STAT 252 or 302 or 312 or 313

Minor Description & Requirements

Use the link below to see a general description of the Actuarial Preparation minor and the current catalog requirements.

Minor Application

If you would like to submit a minor application please follow the steps below:

  1. Click on the link below to complete and submit an application via Adobe Sign. Your application will be routed to the minor advisor for review.
  2. Send your minor advisor an email to schedule a time to discuss your application.

If approved, your name will be added to the Actuarial Preparation minor email list and your application will be forwarded to the Registrar's Office for processing. Please allow up to 6-8 weeks for your minor to be posted to your student portal.

    Frequently Asked Questions

    This section of the web page was designed to answer commonly asked questions about actuaries. Read on to see if being an actuary may be the career choice for you!

    What is an actuary?

    You will often hear actuaries described as professional risk managers. Actuaries are risk managers in that they asses the likelihood and impact of future, uncertain events. They use their quantitative skills to prepare businesses for the financial impact of the risk to which they are exposed.

    Actuaries are professionals because they must meet rigorous standards for admittance to professional societies. Before you can be called an actuary in the United States, you must become an Associate or Fellow of the Society of Actuaries (SOA) or the Casualty Actuarial Society (CAS).

    Actuary is continually rated as a top profession. Some reasons for this include low stress, reasonable hours, low unemployment, and good pay. In 2009, the Wall Street Journal ranked actuary as the number one career based on a variety of factors.

    Where do actuaries work and what do they do?

    According to the Bureau of Labor Statistics, most actuaries work for insurance carriers (55%) and consulting companies (16%). A small number of actuaries also work for government agencies.

    Insurance companies usually fall into at least one of the following categories: Property and Casualty, Life, and Health. Property and Casualty insurance is written to compensate the insured from damage to physical property such as homes, businesses and automobiles. Life insurance is written to ease the financial burden assumed by others when a friend or family member passes away. Health insurance spreads the cost of expensive medical procedures and goods across many insured. Although the roles of actuaries vary across these industries, the end goals are often the same. Actuaries strive to provide accurate prices of insurance and ensure that the insurance company can pay all claims resulting from policies they have written.

    Actuaries working in consulting have many different roles. Some consult for insurance companies, some create and maintain custom insurance plans for companies to offer to their employees, and many work in pensions. Pension consultants often work on Defined Benefit pension plans for employers. Defined Benefit pension plans promise employees a certain amount of pay after retirement. Actuaries are needed to advise companies how to fund these plans such that future retirees will receive their defined income.

    In addition, many actuaries are general business managers or financial officers. They analyze business prospects with their financial skills in valuing or discounting risky future cash flows, and many apply their pricing expertise from insurance to other lines of business. Some actuaries act as expert witnesses by applying their analysis in court trials to estimate economic value of losses such as lost profits or lost wages.

    There has been a recent widening of the scope of the actuarial field to include investment advice and risk management. Further, there has been a convergence from the financial fields of risk management and quantitative analysis with actuarial science. Now, actuaries also work as risk managers, quantitative analysts, or investment specialists. Even actuaries in traditional roles are now studying and using the tools and data previously in the domain of finance.

    What types of skills do actuaries use?

    Actuaries are known for their quantitative skills, especially in probability and statistics. A good understanding of economics and finance is necessary to assess financial risk. Computer programming skills are needed to work with large sets of data. As actuaries often communicate their analysis to people of other educational backgrounds, good communication skills are crucial.

    Calculus, probability, and statistics are used very frequently on the actuarial exams. On the job, the use of these tools varies greatly. Some positions will use “simple” analysis methods that do not use much math and statistics. Examples of a role like this include data analyst roles and some management positions. Other positions require a great deal of quantitative skills. Time series analysis may be used to model interest rates; general linear models are used to determine rating variables for auto insurance; parametric models are fit to claims data; and so forth. Solid quantitative skills are absolutely necessary for the exams, and the use of such skills on the job varies greatly.

    What are the actuarial exams?

    Actuaries in the United States are members of the SOA or CAS. Members of the SOA typically work in Life Insurance, Health Insurance or Pensions. Members of the CAS typically work in Property and Casualty Insurance. For both societies, you become an actuary at the Associate level. The second and final level is Fellow.

    In the SOA, Associates must complete five preliminary exams (P, FM, MFE, MLC, C) and a series of learning modules. Fellows are required to pass several more exams and learning modules. In the CAS, Associates must pass 8 exams and several modules and Fellows must pass three more. The exams range from three to six hours and have pass rates around 40%. Reaching the Associate level typically takes between four and seven years; Fellowship is usually reached two to three years after Associate level.

    Four of the preliminary exams (P, FM, MFE, C) are jointly offered by the CAS and SOA. These exams cover probability, financial mathematics, financial economics, life contingencies, and actuarial models. If you would like to pursue an actuarial career upon graduation, passing at least 2 exams, typically P and FM, is advised. A good rule is to study 100 hours for each hour of exam time. For example, studying 300 hours for a three hour exam should be adequate to pass.

    How do I get started?

    Before someone becomes an actuary, s/he typically works as an actuarial analyst or assistant. For these positions, employers seek candidates with good grades, communication skills, technical skills and exam progress. The weights employers put on these vary greatly. Some employers do not have GPA requirements, while others only interview candidates with GPAs above 3.2. Most require two or more exams, but some only require one.

    What will get my résumé noticed?

    In no particular order, the following are beneficial to a résumé for an actuarial position:

    • High GPA
    • 2 or more passed exams
    • Experience with Microsoft Excel
    • Computer programming experience
    • Actuarial or other quantitative internships
    • Positive results from previous jobs
    • School and community involvement
    • Demonstrated abilities to work on a team
    • Demonstrated leadership abilities
    • Communication skills

    What should I major in if I want to be an actuary?

    Degrees in Math, Statistics, Economics, Computer Science, or Actuarial Science are all traditional routes for aspiring actuaries. These disciplines will help you develop the technical skills necessary for a position as an actuarial analyst and will also help you with the exams. A degree in Actuarial Science is not necessary, but it is helpful for the exams and to show employers your commitment to the profession.

    What is Validation by Educational Experience (VEE)?

    The rationale behind VEE was to incorporate the study of economics, corporate finance, and applied statistics to the process of becoming an actuary. These topics are not tested on any preliminary exams and are considered to be best learned in a classroom environment.

    The VEE topics are not prerequisites for the exams. Rather, they can and must be fulfilled independently of the exam process. However, unlike the exams, VEE credit has certain eligibility requirements. For starters, a B- or better is required for each VEE approved course unless otherwise noted. Further, you must pass at least two actuarial exams before applying for VEE credit though you can complete the courses before taking any exams. After these exams have been passed, a Candidate Credit Application must be submitted to the SOA to start the process. Once this application and documentation of the required grade for the course have been approved, credit for the VEE topic will be granted. After submission of the Candidate Credit Application, a confirmation letter is generally sent out within six weeks.

    The following Cal Poly courses have been approved by both actuarial organizations (SOA and CAS). All five courses are required to fulfill VEE, and all five courses are also part of the Actuarial Preparation Minor curriculum.

    • BUS 342, fulfills the Corporate Finance subject requirement.
    • ECON 221 and ECON 222 fulfill the Economics subject requirement.
    • STAT 324; and STAT 416 or ECON 406 fulfill the Applied Statistical Methods subject requirement.

    What classes at Cal Poly can prepare me for the exams?

    Cal Poly currently offers courses that teach a significant amount of the material on the preliminary examinations. Courses marked with an asterisk (*) also fulfill Actuarial Preparation Minor requirements.

    Keep in mind that while the courses cover material relating to the actuarial exams, substantial independent study is required to pass the exams.

    The following courses cover most of the syllabus for Exam P (Probability):

    • *STAT 305, Introduction to Probability and Simulation
    • *STAT 425, Probability Theory
    • STAT 426, Estimation and Sampling Theory

    The following courses cover most of the syllabus for Exam FM (Financial Mathematics):

    • *BUS 342, Fundamentals of Corporate Finance
    • *BUS 439, Fixed Income Securities and Markets
    • BUS 442, Introduction to Futures and Options

    The following courses cover a significant portion of the syllabus for Exam MFE (Models for Financial Economics):

    • BUS 342, Fundamentals of Corporate Finance
    • BUS 439, Fixed Income Securities and Markets
    • BUS 442, Introduction to Futures and Options
    • BUS 444, Financial Engineering and Risk Management

    The following courses cover a significant portion of the syllabus for SOA Exam MLC (Models for Life Coningencies) or CAS Exam LC:

    Note: You can receive CAS Exam LC credit by passing SOA Exam MLC, but passsing CAS Exam LC does not qualify for SOA Exam MLC credit.

    • *STAT 305, Introduction to Probability and Simulation
    • *STAT 425, Probability Theory
    • STAT 426, Estimation and Sampling Theory
    • *BUS 342, Fundamentals of Corporate Finance
    • *BUS 439, Fixed Income Securities and Markets
    • STAT 417, Survival Analysis Methods

    The following courses cover a significant portion of the syllabus for Exam C (Construction and Evaluation of Actuarial Models:

    • *STAT 305, Introduction to Probability and Simulation
    • *STAT 425, Probability Theory
    • STAT 426, Estimation and Sampling Theory
    • STAT 427, Mathematical Statistics
    • STAT 417, Survival Analysis Methods

    The following courses cover a significant portion of the syllabus for CAS Exam ST:

    • *STAT 305, Introduction to Probability and Simulation
    • *STAT 425, Probability Theory
    • STAT 426, Estimation and Sampling Theory
    • STAT 427, Mathematical Statistics
    • STAT 405, Applied Probability Models (starting Spring 2016)

    Where can I learn more about actuaries?

    The Society of Actuaries website has news on the profession, exam syllabi, past exam results, information on actuarial student programs, and much more. It also has a directory that can be used to find potential employers by geographic area and industry.

    The Casualty Actuarial Societies official website has similar information, with a focus on Property and Casualty information. lists all graduate schools offering a Masters of Actuarial Science.

    Be an Actuary is a little old, but provides information on a career as an actuary. It also discusses the actuarial exams.

    The Actuarial Outpost and are actuarial message boards that have many good questions and answers about the career.

    DW Simpson is a well reputed actuarial recruiting firm; they help employers find appropriate employees and vice versa.

    Comprehensive list of actuarial science resources.

    FAQ answers provided by Dave Evans and Brad Vancho.

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