ACAS will be scrapped. Near Associates please read!

[MNBridge]

Originally Posted by DogBoy

This is getting off topic, but why should it be forbidden and regulated. Figuring out rate change submissions is not rocket science, and most states have some sort of review process anyway. An FCAS is probably qualified to fill out the form, but so could many BA's.

The mistake you are making here MNPoker, is to assume that the FCAS is a requirement to do this kind of work. It isn't. The more hoops the CAS tries to throw out there to make it more difficult for people to enter the career (like getting rid of the ACAS), the more people will go to other careers, and the more likely it becomes that companies hire alternative people to do actuarial work. See how much value and respect you get when companies realize they can hire MBAs that are as or more qualified to do this work at 75k per year than an FCAS at 100k+.

First to clear up something that may have been missed in my post.

I do not think one should have to be an FCAS to file rate changes with the DOI. I think that exams 1 through 5 would suffice for that. (As my first post reads) -- Any less than that absolutely NOT!

Second I think it is very very sad that someone who has choosen this profession believes that someone who has not would be as qualified to do the job

I have an MBA and there is no question in my mind that the taking of exams was critical to my understanding of actuarial analysis.

To say that many people could do the work is a very old and very weak argument. (Change that to many people with MBA's and training could do the work of an actuary and I'll buy it -- WAIT that's me!!) (The exams are exactly that training tools, could they be better? YES. But to say you aren't learning anything from taking exams or that they are all memorization is crazy and if you are trying to bull through these things without any understanding but pure memorization I bet it is a frustrating and very arduous(sp?) task.)
Sure if someone gives a BA an excel sheet and says plug in losses here and premium here and boom the rate indication will kick out!
Is it possible to make this worksheet, I would guess yes and quite easily. But there are other considerations that a person who hasn't taken exams will miss.
For example was there a massive shift in where the book of business was written? Has the social / judicial enviornment changed? Are the triangles showing that claims are being paid faster than in the past and what affect does that have?

How about classification factors? Should they be looked at every 5 years? Or is there something in the rating analysis that will trigger a classification analysis to be done? In your classification study are you considering correlations and making sure that you aren't just charging for the same characterisitic twice? What's you take on GLM's and how can error be reduced? Should we use 2 or 20 variables at once? And will a trained monkey catch it?
Consider this a company like State Farm who writes a lot of auto policies a 1% change will result in millions and millions of dollars in revenue change. If I'm running these companies this is not where I'm cutting corners and saving $25,000.

Our career is no easier than being a doctor or lawyer or accountant (and is probably harder but I'm none of those things so I can't say for sure) But I am an MBA and that was MUCH MUCH easier than these exams.

[MNBridge]

I think the person who quoted my second post above did not catch that I had written this first and was not implying that only FCAS's should be able to file rate changes.

Originally Posted by MNPoker

Here is what I would propose - and I haven't given it that much thought so there may be some serious holes. (like it matters what I think)

After 1 - 4 you become a Assistant Actuary
After 1- 4 and 5 -- Assistant Actuary (Ratemaking designated) with the benefit that you are allowed to send in Ratemaking things for the DOI's in each state.
After 1- 4 and 6, 7 -- Assistant Actuary (Opinion designated) with the benefit of doing Opinions.
After 8, 9 -- Actuary

Maybe use some word other than Assistant / paraActuary ?

[roger]

I think it's a shame that those with the authority to vote consistently favor dropping the ACAS designation without adding any other mid-way milestone on the path to fellowship. As a candidate who hasn't reached associateship yet, not only would such a milestone give me a shot in the arm and a raise, it would ensure that I wouldn't lose any exams when requirements inevitably change in the future.

The requirements have already changed a number of times the last few years, and not necessarily based on educuational experts' recommendations. It seems to me that the real goal in this is to make it needlessly harder to achieve fellowship to keep the supply of fellows low and hence their salaries high. Making the process so much more burdensome (not necessarily more intellectually challenging) would also discourage the unusually large mass of people who've sat for preliminary exams in the last couple of years from staying in this line of work.

Yes, I've learned plenty about our profession by studying for exams, and I do believe that those who've achieved fellowship (and associateship) should be compensated handsomely for their hard work. But, as posted earlier, I'm afraid that companies are going to notice the rising cost of supporting employees through the exam process (employees lose exams, need to buy newer study materials, need time to study, need to take new exams, and some cases need to go back to school!), that they'll hire at least some people to do the work that aren't looking to attain any credential, and that will lower the demand of credentialed actuaries and eventually salaries at all levels. I fear that these ever-changing, arbitrary barriers to entry are artificial, and they will make the exam process and salary scales houses of cards.

[rafkooch]

What is Exam A?

[BassFreq]

Originally Posted by rafkooch

What is Exam A?

You must be from Canada, eh?

[Basso]

Originally Posted by MNPoker

First to clear up something that may have been missed in my post.

I do not think one should have to be an FCAS to file rate changes with the DOI. I think that exams 1 through 5 would suffice for that. (As my first post reads) -- Any less than that absolutely NOT!

I misunderstood your point, but I still disagree. For many companies, a basic understanding of pricing is all that's needed. There is NO need for exams 3-4 in most pricing applications, and 1 & 2 are just background anyway. If someone passed part 5 and used those principles, I'd assume their work would be pretty good. Then again, take a look at most companies. Who is doing the pricing? I’d bet for most companies, its analysts with 1-6 exams and 0-5 years of experience learning the ropes from others in the company, not the exam syllabus. This is how most jobs are learned, and the exams may help speed it somewhat, or they may just be a barrier to entry since students know the pricing basics before they get to the exam. Pricing work is so judgmental and the indications are so rarely taken, that I ask why someone needs to have passed all of exams 1-5 to submit a rate proposal?

Originally Posted by MNPoker

Second I think it is very very sad that someone who has choosen this profession believes that someone who has not would be as qualified to do the job

I don't think its sad. I think this way because I understand the level of analysis that is required, and despite some claims to the contrary, pricing aint rocket science, and I would guess that most statisticians with a BA would do a better job of class analysis than many actuaries.

I have an MBA and there is no question in my mind that the taking of exams was critical to my understanding of actuarial analysis.

To say that many people could do the work is a very old and very weak argument.

I don't know how old it is, but it isn't really all that weak. Take a look at Progressive and count their actuaries. Aren't they a major player? Now imagine if Allstate or State Farm decided to try the approach of hiring MBA's so they don't have to support the exam system. How many students would that put out of work? I think I heard that Allstate has started hiring Grad students and PhDs for their research area. Maybe its because they are equally/more qualified to do this kind of work than FCASs. Also, I’m familiar with the work required to get an MBA, and its not that different than the work required for an undergraduate business degree.

(Change that to many people with MBA's and training could do the work of an actuary and I'll buy it -- WAIT that's me!!) (The exams are exactly that training tools, could they be better? YES. But to say you aren't learning anything from taking exams or that they are all memorization is crazy and if you are trying to bull through these things without any understanding but pure memorization I bet it is a frustrating and very arduous(sp?) task.)

The exams are absolutely NOT training tools. They contain information which could be useful for training, but there is no question that the exams are barriers to entry. Techniques for learning the material for understanding are significantly different than those used for learning material for exams. Exams focus on formulas and lists, and if you know the formula and the list, you pass. Understanding is gained from an understanding of the fundamentals of a topic, and it is very easy to develop this understanding, but fail the exam because the question takes too long to answer completely. Don’t tell me this is rare, because I’ve seen many students fall into this trap. Most eventually learn not to try to understand the material, and just study for the exam.

Sure if someone gives a BA an excel sheet and says plug in losses here and premium here and boom the rate indication will kick out!
Is it possible to make this worksheet, I would guess yes and quite easily. But there are other considerations that a person who hasn't taken exams will miss.
For example was there a massive shift in where the book of business was written? Has the social / judicial environment changed? Are the triangles showing that claims are being paid faster than in the past and what affect does that have?

How about classification factors? Should they be looked at every 5 years? Or is there something in the rating analysis that will trigger a classification analysis to be done? In your classification study are you considering correlations and making sure that you aren't just charging for the same characteristic twice? What's you take on GLM's and how can error be reduced? Should we use 2 or 20 variables at once? And will a trained monkey catch it?

First, I think you underrate most BA’s that would get hired to do this kind of work. There is no magic elixir that is consumed as exams are passed that make the BA no longer a trained monkey. If someone is interested in the field, they will look into many of the questions you raised, without having had the “exams” to “teach” them. Also, many of your questions are related to statistical knowledge, which I submit is fairly weak for the actuarial profession as a whole. There is a basic knowledge, but as far as statistical analysis skills, I would be much more comfortable giving a GLM project to a Stat BA or Stat Grad student than an FCAS that has only exams as a background in stats.

Consider this a company like State Farm who writes a lot of auto policies a 1% change will result in millions and millions of dollars in revenue change. If I'm running these companies this is not where I'm cutting corners and saving $25,000.

Our career is no easier than being a doctor or lawyer or accountant (and is probably harder but I'm none of those things so I can't say for sure) But I am an MBA and that was MUCH MUCH easier than these exams.

Okay, it was easier, but why was it easier? Was it easier because the irrelevant crap was not covered and it was stated as such in class, or was it easier because the professor was there to point out the relevant topics, or was it easier because you could see an application of the theory? I think you understand my point. The exams don’t teach, they submit a pile of information, some of which is useful, much of it is not. The time spent learning useless information is money that a company spends that it doesn’t need to.

I don’t foresee companies abandoning actuaries anytime soon, but if the CAS continues to make it more and more difficult for people to enter the profession, there will be a lack of supply. Many FCAS’s think this will be good for salaries, I think it will be good for salaries until companies start realizing they DO have alternatives, and that many of those alternatives can provide equivalent quality with less cost, and no production dip in October and April.

[Bullfrog1220]

I have to admit that this is one of the most irritating threads that I've ever read. Not because of anything that has been written, but because of the apparent disconnect between those making the decisions on the exam process, and those that have ideas to make the process better.

So the CAS is considering the possibility of removing ACAS, despite contrary recommendations from the task force assigned to looking into it. What's the point? Step back and try to give me one reason why the CAS doesn't want associates floating around. It doesn't cost them anything, does it? Citing the system of designation for doctors and lawyers makes no sense. We're not doctors or lawyers (thank God). Doctors are training to save people lives, we are training to set our companies reserves. There is no comparison. As for lawyers, why would we ever want to pattern ourselves after the legal profession? Using other professions as a model is meaningless.

Personally, I have some concerns about the exam process, especially the CAS part of it. It seems to be antiquated. The syllabus really doesn't help a student prepare for the exam. The exams are difficult, as they should be, but in some ways they are needlessly difficult. There just seems to be too much luck required to pass. If a candidate studies hard, and understands the material, they should pass. I just don't believe that the exam process, in its current form, meets that requirement.

As someone who is currently writing exams, I realize that I have very little say in the matter. Getting a 5 on last fall's Exam 6 has probably biased my opinion a bit, as well. I do fill out the surveys on CAS' website when they are available, fully knowing that they probably don't get read.

But, I have always hoped that one day I will finally make it to fellow, and then I can "volunteer" to help with the admittedly difficult job of making the necessary changes. After reading Mr. Mahler's and Mrs. Fisher's testimony, I get the feeling that's not even feasible. So, why should I spend the next couple of years trying to pass three more exams just to become a member of a society that refuses to make meaningful changes, when necessary? Are the politics within the CAS really that bad?

[tommie frazier]

I will re-state why the CAS might be interested:

In order to facilitate mutual recognition, the CAS may want to remove the ACAS and create a single class of members. The foreign groups (from what I was told) do not have a two-tiered membership.

So, to accomodate the big audacious goal of being THE casualty actuarial society in the world, having the rails to MR greased would help.

[Colymbosathon ecplecticos]

DogBoy wrote:

Exams focus on formulas and lists, and if you know the formula and the list, you pass.

This just isn't true and maybe that's what some are upset about. Many focus on formulas and lists like you describe, and then they fail. Understanding the material is the key to passing, trouble is many don't know how to learn a body of material and confuse memorization with learning.

[Bullfrog1220]

This just isn't true and maybe that's what some are upset about. Many focus on formulas and lists like you describe, and then they fail. Understanding the material is the key to passing, trouble is many don't know how to learn a body of material and confuse memorization with learning.

I used to believe this. Personally, I abhor memorizing things, and never did so on these exams until I got to the CAS exams and finally realized that it was a necessary evil. There are too many of those "List 5 ways...." questions that I kept getting 2-3 answers on. You can understand all of the material, and still not come up with all 5 answers listed in the paper under the duress of a 4-hour exam.

If you want to go into an exam with some confidence that you will pass, memorizing the lists is vital.