Undergraduate information
Actuarial Studies Actuarial modelling Actuarial statistics Financial mathematics Models for insurance and finance
Actuarial Studies
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Contents What is actuarial studies?
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Majoring in actuarial studies Specialist areas Double majors Sample course plan
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Focus on first year actuarial studies
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Bachelor of Commerce graduate pathways 6 Honours 6 Careers 7 Professional accreditation 8 Graduate study in actuarial studies 8
“The actuarial studies course encourages in-depth analysis and the application of theory to the real world. This is important because the jobs which only demand calculation of data are becoming increasingly outsourced to computers. The way to position yourself above other potential employees now requires the ability to think critically and apply one’s knowledge to day-to-day business events. The students in my classes come from a variety of places across the world. This diversity of experiences means that every discussion can challenge or change my views, and means I can make global contacts for my future career.” Bradley Tjandra Bradley is completing his first year of the Bachelor of Commerce’s actuarial studies major.
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Bachelor of Commerce
What is actuarial studies? The work of an actuary involves the assessment, evaluation and management of the financial risks faced by individuals, companies and governments as they plan for the future. These risks vary from an illness, disability or death to the effects of a cyclone, earthquake or major economic or social change. The actuary’s work is based upon a multi-disciplinary background of mathematics, statistics, demography, finance and economics. As a result of this multi-disciplinary background and their strong analytical skills, actuaries serve as financial advisers to a wide range of commercial organisations including life, general and health insurance companies, superannuation funds, banks, other financial institutions and governments. In most cases they are asked to tackle a wide range of problems, most of which involve some uncertainty about the future.
Five reasons to choose actuarial studies at Melbourne 1. Teaching excellence
3. Professional accreditation
The Centre is committed to the highest standards of teaching. You will be taught by experts in their fields. The approach to teaching balances the theoretical and practical aspects (one does not go without the other). We devote significant resources to teaching, for instance: all material online, qualified tutors and small tutorial groups.
The University of Melbourne is one of only six universities in Australia to be fully accredited by the Australian actuarial profession. As such, our students are on a fast track to a professional actuarial qualification.
2. Research excellence
The Centre is a leading international research group. Our teaching is research led so that our students are exposed to current developments in the field.
4. Strong industry links
Staff bring a wealth of industry experience to the program. Additionally, leading practitioners contribute to the teaching of the program, exposing students to the latest developments in their fields. 5. Active Students’ Society
The Actuarial Students’ Society provides support to students and encouragement to enjoy university life outside of studies.
“I enjoyed the challenges offered by the course. The core technical subjects for the actuarial major were relevant and well structured. Breadth subjects allowed me to expand in areas that were not immediately within the scope of my major. I have made many good friendships that I am sure will be valuable to me for many years into the future.” Viola Chan Viola completed her Bachelor of Commerce in 2011, after moving down from Brisbane in order to pursue her major of actuarial studies. She currently works as an actuarial graduate at Deloitte.
Actuarial Studies
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Majoring in actuarial studies Students who complete a major in actuarial studies will have a firm grounding in the traditional actuarial skill set of probability and statistics, financial mathematics, and life insurance mathematics. Specialist areas Financial mathematics
Life insurance mathematics
Actuarial statistics
Studies in financial mathematics cover the basics of the theory of interest, investment mathematics and stochastic models for asset returns. These skills are relevant to all actuaries and have wide applicability throughout the financial sector.
Studies in life insurance mathematics involve building probability models of human mortality and morbidity, and combining these with a financial model in order to price and reserve for life insurance policies. This is called the “valuation� of insurance policies, and is performed by all actuaries working in life insurance. It is also important in superannuation, in which case the valuation is often undertaken by firms of consulting actuaries.
The analysis of actuarial statistics is important in all areas of actuarial work, perhaps most so in the field of general insurance. General insurance refers to any type of insurance that is not insurance on a human life and includes common forms of insurance such as motor vehicle insurance. Actuaries calculate quantities such as premiums and the appropriate level of no claims discount for different types of general insurance. Actuaries working in general insurance are usually employed either by general insurance companies or by firms of consulting actuaries.
1st year
Introduction to Actuarial Studies Financial Mathematics I
2nd year
Financial Mathematics II Probability Statistics
3rd year
Financial Mathematics III Models for Insurance and Finance
1st year
Introduction to Actuarial Studies Financial Mathematics I
2nd year
Financial Mathematics II Probability Statistics
plus advanced study at honours level 3rd year
1st year
Introduction to Actuarial Studies Financial Mathematics I
2nd year
Financial Mathematics II Probability
Actuarial Modelling I
Statistics
Contingencies (double subject) 3rd year
Actuarial Modelling II Actuarial Statistics plus advanced study at honours level
Natasha is a second year actuarial studies major from Tasmania. She is a First in the Family Scholarship recipient, and is a resident at Ormond College.
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Bachelor of Commerce
“I intend to become a well-qualified actuary. Studying the actuarial studies major through the Bachelor of Commerce is a huge opportunity to realise my dreams. Not many universities offer this course.� Sakshi Aggarwal Sakshi is in her first year of the Bachelor of Commerce. She was awarded an International Undergraduate Merit Scholarship in 2013.
Sample course plan
1st Year
2nd Year
3rd Year
Semester 1
Introductory Microeconomics
Accounting Reports and Analysis
Accelerated Mathematics 1
Commerce elective
Semester 2
Introductory Macroeconomics
Introductory Financial Accounting
Accelerated Mathematics 2
Introduction to Actuarial Studies
Semester 1
Organisational Behaviour
Probability
Financial Mathematics 1
Business Finance
Semester 2
Intermediate Macroeconomics
Statistics
Financial Mathematics 2
Breadth (non-maths)
Semester 1
Actuarial Modelling 1
Actuarial Modelling 2
Financial Mathematics 3
Breadth (non-maths)
Semester 2
Contingencies (double subject)
Actuarial Statistics
Models for Insurance and Finance
Compulsory subjects
Actuarial subjects
Accounting subjects
Finance subjects
Commerce elective subjects
Breadth
The above example shows how you can major in actuarial studies, meet honours entry and professional accreditation requirements. Students pursuing accreditation in actuarial studies (defined as those students who successfully complete Actuarial Modelling I) are not required to complete at least 75 breadth points (six subjects). However they must take at least 75 points outside the core program including two mathematics subjects, probability and statistics and two non-Maths breadth subjects.. Each subject is usually worth 12.5 points.
Double majors
Students choosing the actuarial major with the intention of pursuing full professional accreditation cannot complete a double major in the Bachelor of Commerce. Actuarial Studies
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“I have loved the breadth of experience that I have been exposed to. In my actuarial studies major I have been given an invaluable quantitative toolkit. From my core commerce subjects to my breath subjects, studying at the University of Melbourne has given me a truly rounded education that is useful beyond simply getting a job. I intend to pursue a career in the management consulting industry. I am confident that the knowledge that I have gained from my degree, the practical skills I have honed through a range of opportunities, as well as the networks I have formed with my peers places me in an excellent position to launch myself into the career of my choosing.� Daniel Tram Daniel is in his final year of the Bachelor of Commerce, completing an actuarial studies major. Throughout his degree he has been involved in case competitions, student societies and internships. In 2014 he will commence work at management consulting firm A.T. Kearney as a business analyst.
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Bachelor of Commerce
The Basement Lecture Theatre in the Business and Economics building
Focus on first year actuarial studies Subject name: Introduction to Actuarial Studies Contact hours
3 hours per week, comprising 2 lectures and one tutorial Topics covered
The subject provides an introduction to four main areas of study: financial mathematics, demography (the study of populations), actuarial practice, and the valuation of contingent payments. In financial mathematics, you will learn about compound interest and how to place a value on payments to be made in the future – for example, how much money do we require now to make a payment of $1 million five years from now? In demography, you will learn about human populations and the key factors of fertility and mortality. Using mathematical models of human mortality, you can answer questions such as: what is the probability that an individual aged 25 will live to age 60?
In actuarial practice, you are given a broad overview of the main areas of actuarial practice and the problems faced by actuaries working in these areas. You will be exposed to real insurance and superannuation products and will be able to perform calculations. For example, from information given on the UniSuper website (UniSuper is the superannuation fund for Australian university staff), you can work out the amount of superannuation benefits a person would receive on leaving the superannuation fund. In contingent payments, you combine ideas from financial mathematics, demography and probability theory to place a value on a payment, or set of payments, to be made in the future. For example, if a person retired from work at age 60 and wanted an income of $50,000 throughout their remaining lifetime, what sum of money should the person save before retirement to secure this income?
Skills developed
You will develop your mathematical modelling skills and learn the techniques required to price basic financial contracts. You will also develop an awareness of the environment in which actuaries operate and of the problems they face. Assessment
The subject is assessed by a midsemester test (10%), an end of semester exam (70%) and two assignments (10% each). The assignments are usually computer based and are designed to test skills that cannot be examined in a traditional examination. Please check the Course and Subject Handbook to confirm subject details.
Teaching methods
The subject is taught by a mixture of lectures and tutorials. The lectures have a fairly formal structure, whilst tutorial classes are much more interactive, where you are expected to contribute to solving problems.
Actuarial Studies
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Bachelor of Commerce graduate pathways Upon completing your Bachelor of Commerce with a major in actuarial studies, there are a number of graduate pathways to employment, further study and research. Bachelor of Commerce Duration: 3 years full time Choose from the following major areas of study: Accounting, Actuarial studies, Business, Economics, Finance, Management, Marketing www.bcom.unimelb.edu.au
Honours Duration: 1 year full time Available in: accounting, finance, actuarial studies, economics, management or marketing or a combination of two areas. An honours year enables you to extend your knowledge of your major or area of specialisation through higher level honours subjects and by undertaking an independent research thesis in a single area of study under the guidance of an academic supervisor.
Graduate research degrees1 Duration: 2-3 years full time Melbourne Business School offers a range of Masters by Research and PhD programs. See www.mbs.unimelb.edu.au for more information.
Graduate professional development degrees1
Graduate professional entry programs1
Duration: Generally 1.5-2 years full time
Duration: Generally 2-3 years full time
Melbourne Business School offers a full suite of graduate business and economics programs with an emphasis on career entry programs for recent graduates and specialist education for professionals. Our expertise spans the fields of accounting, actuarial studies, business administration, economics, finance, human resource management, international business and marketing. See www.mbs.unimelb.edu.au for more information.
Title: Master of, unless otherwise specified: Including: Engineering, Forest Ecosystem Science, Information Systems, Juris Doctor (Law), Teaching, Urban Horticulture, Urban Planning. See www.futurestudents. unimelb.edu.au for more information.
Employment Melbourne Commerce graduates enjoy careers both locally and abroad in areas such as accounting services, finance, insurance and superannuation services, banks, mining, manufacturing, utilities and transport services, business, management, advertising, market research and statistical services, legal services, retail and wholesale, and computing and telecommunications services. See www.bcom.unimelb.edu.au/pathways/careers.html for more information. 1 Selection into these programs is based on performance in an undergraduate degree and additional selection criteria may also apply. Note this information indicates many but not all the possible pathways to graduate study.
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Bachelor of Commerce
Honours
Careers
An honours year provides an advanced knowledge of actuarial studies and the opportunity to develop your research and communication skills through either a research essay or a set of research projects.
The fast-growing actuarial profession provides employment opportunities throughout Australia and the world. There are currently over 1,500 qualified actuaries in Australia. More than 25% work in life insurance, where the actuarial profession has its foundations. Nearly 20% work in superannuation, with the remaining actuaries typically working in general insurance, investment management, asset consulting, financial planning and in government.
The honours year also fulfils all the requirements for Associateship of the Institute of Actuaries of Australia. In this fourth year of study you will take advanced coursework in the areas of risk theory and financial mathematics. Importantly you will also develop your business and academic writing skills and your communication skills by producing some research into an area of actuarial science that has not been widely considered previously. Employers of actuarial graduates are becoming increasingly interested in students who can demonstrate an ability to learn, to adapt to changing situations and to work well within a team. These skills are all honed during the honours year. To be eligible for entry to honours, students must satisfy the requirements of the BCom degree and obtain a grade of H2B (70%) in at least four level-3 actuarial studies subjects.
Demand for qualified actuaries is growing in health insurance, risk management and financial services. Actuaries also work in non-traditional areas, for example information technology and public infrastructure. In recent years actuaries have played a growing role in banking and finance. The analytical skills of actuaries are seen as invaluable in banking activities including security pricing, valuations linked to mergers and acquisitions, project finance and also the development of enterprise risk management programs.
Typically, a newly qualified actuary would earn around $95,000-$110,000 per annum, with at least an $11,000 increase per year for several years. More senior, experienced professionals would earn in the vicinity of $200,000 per annum. Career examples for actuarial studies graduates
> Banking and finance > Capital and risk management > Financial planning (retail) > Financial reporting and performance management > General insurance > Health insurance > Investments/asset management > Life insurance: product pricing, design and distribution > Superannuation > Valuation of insurance liabilities and financial instruments Source: Actuaries Institute and Graduate Destinations Survey, University of Melbourne
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Professional accreditation The Centre for Actuarial Studies is fully accredited by the Actuaries Institute, which is the professional actuarial body in Australia. This accreditation means that students can obtain exemption from Parts I and II of the Institute’s professional exams, leading to the designation of actuary and Associate of the Actuaries Institute of Actuaries of Australia (AIAA) on completion of a professionalism course and experience requirements. To qualify as a Fellow (FIAA), you must pass (or be exempt from) three parts of the professional accreditation as prescribed by the Institute. The first two parts can be undertaken as a part of the Bachelor of Commerce (Honours) degree at the University of Melbourne. If you complete relevant subjects at the University of Melbourne, and perform sufficiently well, you will be recommended for exemption from the corresponding subjects offered by the Institute. Should you receive exemption from all corresponding subjects you will be exempt from both Part I and Part II by the end of your honours degree. If you do not obtain the mark needed to achieve exemption you do not need to repeat the subject. As long as you achieve a pass mark or above the subject will still be credited towards your Bachelor of Commerce degree. Part III of the professional accreditation is set by the Actuaries Institute. These examinations are held in May and October
each year and are undertaken after you graduate, while you are working full time. The length of time taken to qualify varies from student to student. The FIAA qualification can be achieved in a minimum of five years, but the average time to gain full accreditation is between seven and eight years (including completion of the four year Bachelor of Commerce (Honours) degree.
Master of Commerce (Actuarial Science) is designed to provide high quality advanced studies in actuarial studies and a research pathway suitable for those with an undergraduate degree in the discipline. Applicants who have completed an Honours degree will eligible to receive credit for up to 100 points (ie. Year 1 of the Masters’ program).
International recognition
Research higher degree programs
Overseas actuarial bodies give recognition for the qualification of Fellow of the Institute of Actuaries of Australia, subject to some supplementary training. There is also partial recognition for exams passed (or obtained through exemptions) under the Institute.
Master of Commerce in Actuarial Studies
Graduate study in actuarial studies Career entry programs
Master of Actuarial Science This 2-year program is designed to provide initial actuarial education for graduates with a first degree that includes a strong mathematical or statistical component, for example commerce, mathematics, physics or engineering. The program enables students who perform at a sufficiently high level in university subjects to receive exemption from all of Part I of the professional actuarial examinations of the Actuaries Institute.
Joyce Au-Yeung Joyce Au-Yeung is a qualified actuary and lawyer by training, and joined Australia Post as Corporate Development Manager in 2010. Prior to that, Joyce spent over five years at Deloitte, where she was awarded National Winner of Deloitte Businesswoman of the Year 2008/09 and was appointed co-chair of Deloitte’s Emerging Leaders Council. Joyce has been passionate about fostering networking opportunities between fellow students since her university days, and was elected President of the Actuarial Students’ Society (2001) and President of the International Commerce Students’ Society (2000). She now leads the University of Melbourne Actuarial Alumni Association (UMAA), in which she was part of the founding team. Joyce is a Fellow of the Institute of Actuaries Australia, and holds Bachelor of Laws and Bachelor of Commerce degrees from the University of Melbourne.
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Bachelor of Commerce
Master of Commerce (Actuarial Science)
This is an 18 month research degree with no coursework component. Candidates are assessed on the basis of their research thesis. The degree is primarily aimed at honours graduates from the disciplines of actuarial studies, financial mathematics, mathematics and statistics. PhD in Actuarial Studies This is a three year research degree with no coursework component. Candidates are assessed on the basis of their research thesis. The degree is primarily aimed at honours or masters graduates from the disciplines of actuarial studies, financial mathematics, mathematics and statistics.
Actuarial Studies
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Actuarial Studies Undergraduate Information brochure Authorised by: Provost Published by: The Faculty of Business and Economics Copyright: The University of Melbourne, July 2013 CRICOS Provider code: 00116K Intellectual Property: For further information refer to www.unimelb.edu.au/Statutes Copyright: Copyright University of Melbourne 2013. Copyright in this publication is owned by the University and no part of it may be reproduced without the permission of the University. Disclaimer: The information in this publication was correct at the time of printing. The University of Melbourne reserves the right to make changes as appropriate. As details may change, you are encouraged to visit the University’s website or contact the University of Melbourne Information Centre to obtain the latest information. Statement on Privacy Policy: When dealing with personal or health information about individuals, the University of Melbourne is obliged to comply with the Information Privacy Act 2000 and the Health Records Act 2001. For further information refer to www.unimelb.edu.au/unisec/privacy/
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Bachelor of Commerce
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