Actuarial Studies Guide

Actuaries manage risk. They frequently work in the insurance industry, but may work for other types of corporations, in consulting, and in government or non-profit jobs. Professionals trained in this area may also work in related fields such as predictive modeling, statistical consulting, or data consulting. The Actuarial profession is attractive because it does not require a graduate degree, and starting salaries for actuaries are fairly high. Additionally, actuaries tend to work reasonable hours, unlike similar jobs in finance or banking. Actuaries should receive support from their employer to pursue professional development in the field, including studying for exams.

Although some institutions offer an actuarial science major, IU Bloomington does not. Pursuing a specific major related to actuarial science is not required to enter the field, and having a diverse academic background can be valuable according to alumni. However, most students interested in actuarial studies at IUB pursue a major in Mathematics, Economics, Statistics, or Finance. Because Actuarial Science refers to a discipline of study that IUB does not offer, we refer to this professional interest area as Actuarial Studies.

Students who discover actuary as a field later in their undergraduate career may struggle to fit in the necessary coursework. Students in this situation will likely need further education, in the form of non degree coursework and self-study, after graduation. Emphasis should be placed on passing at least one actuarial exam as soon as possible. The visual pathway near the bottom of this SOA website gives a good summary of what elements are most important early on. Other institutions may offer Master’s degrees in actuarial science specifically aimed at career changers and recent graduates who lack the background necessary to self study for actuarial exams. These types of graduate degrees can be useful for transitioning to the field, but are also expensive and unnecessary for motivated, independent learners. Graduate study is not encouraged for actuaries unless they intend to pursue teaching at the university level or research.

Recruiters in this field have said that students need to succeed in three main areas:

1. Actuarial exams: Passing at least one exam, or ideally two exams, prior to graduation.
2. Coursework: Earning a strong GPA, including strong grades in the necessary coursework in mathematics, statistics, economics, accounting and finance as an undergraduate. Computer programming skills are valued. Completion of VEE credits is encouraged but not required for a first job.
3. Relevant Experience: Participating in activities outside of coursework (such as student clubs, internships, competitions, part time jobs, and volunteer work) is important for demonstrating one’s overall development as a professional and developing soft skills like teamwork. Also, candidates must demonstrate a clear understanding of and firm interest in the field. This may require that students look up information about the field, talk with professionals or reach out to alumni, and complete informational interviews. Students are encouraged to work with a career coach on developing this area.

Undergraduates may complete between one to four preliminary actuarial exams before graduation. Most IU students aim to complete one or two exams. The first two exams may be taken in either order. Typically at least one exam is necessary to search for a job. One exam is recommended to search for an internship, but not strictly required. Students are encouraged to take preparatory coursework and plan between 6 months to a year of self study before sitting for an exam. However, independent learners may successfully prepare for an exam without the recommended coursework. Coursework alone is not sufficient for success. Professionals recommend approximately 400 hours of self-study per exam.

Resources for studying: The SOA websites linked below include exam syllabi and textbook recommendations. Successful students report that sample problem practice is a crucial part of their study routine, to speed up problem solving. Unsuccessful students often report running out of time on the exam and being unfamiliar with the applied problems presented on the exam. IU coursework teaches the foundational knowledge necessary for exams, but not the applications. Students may purchase sample exam books or subscribe to online services for access to large sample problem sets. However, students should exhaust the free resources linked by the SOA before subscribing to a service. The free Wisconsin videos receive high praise from students. Collaborating with peers who have similar goals is also recommended.

• Probability Exam: The best preparation for topics covered by Exam P is Math-M 463 Probability Theory. However, MATH-M 365 covers much of the material for this exam and may be sufficient when combined with self study of some missing multivariate material. See course prereqs.
• Finance Exam: The best preparation for topics covered by Exam FM is ECON-E 425. However, other intermediate or advanced finance courses such as MATH-M 451 or BUS-F 305 may be useful if appropriate for student’s major. See course prereqs and restrictions.

Undergraduates are advised to satisfy all VEE categories, if they are able, prior to graduation. This is not a requirement to search for a job, but will be necessary later in the career. VEE includes three categories, and each category may require one or two courses with strong grades. A Directory of IU courses approved in past may be found online. Students may, with the help of faculty, propose a different IU course for inclusion in the directory or renew a previously approved course option.

• Accounting and Finance: Both BUS-A 200 and ECON-E 425 are recommended for College of Arts and Sciences majors. Other options exist. See course prereqs.
• Economics: Both ECON-E 251 and E 252, or the intermediate sequence (E 321 and E 322), are available.
• Mathematical Statistics: Either ECON-E 370 or STAT-S 350 is recommended. ECON-E 371 is also a great option. See course prereqs.

Not all courses listed here are strict requirements to prepare for the profession. But, together, these recommendations provide students with the knowledge necessary to study for exams, satisfy VEE credits, and demonstrate valuable skills to employers. Students are advised to consider at minimum pursuing a Math minor and an Econ minor. The Statistics minor is also valuable. Some students find value in the Financial Literacy minor, but the financial coursework required there is too general to provide strong preparation for Exam FM.

Sequencing: Each student should design an individual sequence of coursework depending on their major, preparation, and long term goals. However, you may wish to consult the Economics/Mathematics Interdept BA degree map in iGPS for a good example of an appropriate sequence of the mathematics and economics coursework listed below.

• Mathematics courses, take all:
  • M/S 211 Calculus 1
  • M/S 212 Calculus 2
  • M 365 Probability and Statistics (optional, if taking ECON-E 370 and M 463)
  • M/S 303 Linear Algebra
  • M/S 311 Calculus 3
  • M/S 463 Probability Theory – best fit for Exam P
• Economics courses, take all:
  • E/B 251 Fundamentals of Economics 1
  • E/B 252 Fundamentals of Economics 2
  • E 370 (optional, if taking MATH-M 365 and STAT-S 350)
  • E 321 Intermediate Microecon
• Accounting, take one:
  • BUS-A 200
  • BUS-A 304 (formerly A 201) – restricted to BUS majors only
• Finance, take one:
  • ECON-E 425 –best fit for Exam FM
  • MATH-M 451
  • BUS-F 305 – restricted to BUS majors only
• Econometrics, take one option:
  • ECON-E 371 Intro to Applied Econometrics
  • ECON-E 471 and E 472 – appropriate for mathematically sophisticated students
  • BUS-G 350 – restricted to BUS majors only
• Computer Programming, take one:
  • CSCI-A 201 - non major programming course w/Python
  • CSCI-C 200 - major programming course w/Python
  • CSCI-C 211 - major programming course w/Scheme
• Statistics, recommended but not required:
  • STAT-S 350 Intro to Statistical Inference
  • STAT-S 352 Data Modeling and Inference
  • STAT-S 470 Exploratory Data Analysis
• Other possible courses of interest:
  • CSCI-A 110
  • BUS-K 201 – restricted to BUS majors and minors
  • ECON-E 305 Money and Banking
  • ECON-E 344 Health Economics
  • BUS-L 201 – restricted to BUS majors and minors

• Beanactuary.org
• Society of Actuaries
• Exam P Materials
• Exam FM Materials
• VEE Directory of Approved courses
• 2022 SOA podcast interview with the winning team of the International Case Study Competition, IU Bloomington.
• 2021 SOA podcast interview with the winning team of the International Case Study Competition, IU Bloomington.
• Wisconsin Actuarial Exam prep videos
• IU Actuarial Student Club