New CAS exam - Modern Actuarial Statistics

[JMO]

Originally Posted by Colymbosathon ecplecticos

There is a life contingencies study note on exam S; presumably there will be something similar on one of the new exams.

There really is no long term equivalent. This is because the nature of the risks that life insurers face and the risks that property and casualty insurers face is fundamentally different. Human lives are subject in increasing mortality with age; creating a level premium product for this (long term) risk requires taking premiums from one year and using them to cover occurrences (deaths) in future years. Since typically P&C risks have decreasing or constant hazard rates, there is no need for this. Also, P&C products typically don't have level premiums.

This implies that health insurance ought to be a P/C product. (I already think of it as a hybrid.)

[Colymbosathon ecplecticos]

Originally Posted by JMO

This implies that health insurance ought to be a P/C product. (I already think of it as a hybrid.)

I think that a good clustering algorithm would classify it as such.

[BlakeAustin25]

Originally Posted by willel2338

When I started taking exams you could practically be an ASA before you really had to choose which society.

Now, you have to choose after MFE.. LOTS of college students and prospective career changers have (at least) exams through MFE these days. Going forward, will those students stop at that point and seek employment? Will they take MLC and pursue SOA? MAS-I and pursue CAS?

I had this same thought cross my mind. Some potential solutions from troubleshooting with a colleague the other day:

1) As stated, switch to VEEs and other non-exam items. This presents a problem if the student is in a program that has coursework to correspond with the VEEs.

2) Pick a society and go all in. In this case, I suspect the SOA would see a boon in the short term. Most students and career changers will want to maximize their opportunity for employment while avoiding swapping societies and incurring additional exams. Right or wrong, they might lean toward and early SOA selection due to the General Insurance pathway option.

3) Obtain earlier internships, or begin doing an internship "rotation" to determine which practice area you are interested in. This could decrease employment options, but it would let a student avoid changing societies mid-stream.

4) Companies either do away with internships completely, or wait until a candidate has made a society choice before hiring an intern/entry level person.

Note these are from the US point-of-view. Other countries with their respective societies and/or industry culture could be vastly different.

[Colymbosathon ecplecticos]

Originally Posted by BlakeAustin25

2) Pick a society and go all in. In this case, I suspect the SOA would see a boon in the short term. Most students and career changers will want to maximize their opportunity for employment while avoiding swapping societies and incurring additional exams. Right or wrong, they might lean toward and early SOA selection due to the General Insurance pathway option.

Or a student could learn some statistics, a topic that is now central to both societies' syllabi. I think that this would be preferable to many students, actively advancing their progress towards either societies' credential, while at the same time opening other possible career paths outside of strictly actuarial ones.

[kadsura]

Originally Posted by Colymbosathon ecplecticos

There is a life contingencies study note on exam S; presumably there will be something similar on one of the new exams.

There really is no long term equivalent. This is because the nature of the risks that life insurers face and the risks that property and casualty insurers face is fundamentally different. Human lives are subject in increasing mortality with age; creating a level premium product for this (long term) risk requires taking premiums from one year and using them to cover occurrences (deaths) in future years. Since typically P&C risks have decreasing or constant hazard rates, there is no need for this. Also, P&C products typically don't have level premiums.

Thanks for the insight.

This has nothing to do with what we are discussing, I was just curious - looking at your user ID, were you a biologist?

[Arlie_Proctor]

Originally Posted by Avi

Perhaps, but a CLEP-like knowledge of Macro, Micro, and corporate finance was deemed sufficient, so VEE can provide that (as opposed to in our day when it was part of Part 2 ).

That level of knowledge is not sufficient for time series or regression. Now, under MASI/II, regression takes on much more weight as LM, GLM, and basic GLMM will be part of the syllabus.

Part 2? Geez, kids these days. Econ/Finance was Part 5 back in my day.

[whoanonstop]

Originally Posted by Avi

Now, under MASI/II, regression takes on much more weight as LM, GLM, and basic GLMM will be part of the syllabus.

Thank goodness. More material to learn that 90% of actuaries won't even use.

-Riley

[NormalDan]

Originally Posted by JMO

This implies that health insurance ought to be a P/C product. (I already think of it as a hybrid.)

Speaking of the LC study note on S, it feels bit odd. Basically two sections out of the 50 on the exam are life related, yet those two sections cover an incredibly deep area, far deeper than any other two sections.

My take is that the CAS wants P&C actuaries to have exposure to the specialty without getting too bogged down. Sorta feels like swimming across a trench and glancing down before swimming on.

[Vorian Atreides]

Originally Posted by NormalDan

Speaking of the LC study note on S, it feels bit odd. Basically two sections out of the 50 on the exam are life related, yet those two sections cover an incredibly deep area, far deeper than any other two sections.

My take is that the CAS wants P&C actuaries to have exposure to the specialty without getting too bogged down. Sorta feels like swimming across a trench and glancing down before swimming on.

IIRC, part of that is to satisfy IAA requirements for credentialing.

[Avi]

Originally Posted by whoanonstop

Thank goodness. More material to learn that 90% of actuaries won't even use.

-Riley

Even if these techniques are not used by a majority of actuaries NOW, part of the process which started years ago was to consider what the actuary of the NEXT 25 years will use, not the actuary of the LAST 25 years. These tools & techniques are just entering the exponential phase of their growth and adoption. If we don't teach them NOW, we won't be preparing candidates properly and they wont have jobs 5/10 years from now.

That's the reactive argument. Of course there is the equally as important proactive argument which is that these tools just ARE better for much of the work we do (specifically reserving and class ratemaking) and we should be teaching them so that 90% of the next generation of actuaries (who are starting their hazing exam journeys now WILL use them and bring the profession more actively into the 21st century.