INTERNATIONAL DEVELOPMENTS IN ACTUARIAL EDUCATION

INTERNATIONAL DEVELOPMENTS IN ACTUARIAL EDUCATION : INTERNATIONAL DEVELOPMENTS IN ACTUARIAL EDUCATION Chris Daykin Chairman, Education Committee European Actuarial Consultative Group

ROUTES TO ACTUARIAL EDUCATION : ROUTES TO ACTUARIAL EDUCATION exams offered by the profession university education professional exams allowing for exemptions university education + professional exams university education + experience

EUROPEAN ACTUARIAL CONSULTATIVE GROUP : EUROPEAN ACTUARIAL CONSULTATIVE GROUP Consultative Group established in 1978 mutual recognition agreement in 1992 Education Committee established in 1992 core syllabus adopted in 1998 endorsement by member associations in 2001 implementation by 2005 further evolution planned

MUTUAL RECOGNITION : MUTUAL RECOGNITION mutual recognition of higher education diplomas a requirement of EU legislation from 1992 agreement between actuarial associations in 1992 full mutual acceptance of fully qualified actuaries …subject to adaptation period of one year common code of conduct requirement coordination of syllabus for actuarial education

OBJECTIVES FOR EACG : OBJECTIVES FOR EACG strong actuarial education throughout EU firm basis for mutual recognition clarity for regulators in definition of actuary development of common educational materials increasingly European education process European actuaries

EDUCATIONAL APPROACH : EDUCATIONAL APPROACH

GC SYLLABUS STRUCTURE : GC SYLLABUS STRUCTURE Stage 0: Preliminary Stage Stage 1: Actuarial Foundation Stage Stage 2: Generalised Applications Stage Stage 3: Country/Practice Area Stage

PRELIMINARY STAGE : PRELIMINARY STAGE mathematics probability & statistics stochastic processes computing economics accounting & reports structure of EU communication language

ACTUARIAL FOUNDATION STAGE : ACTUARIAL FOUNDATION STAGE financial mathematics survival models and simple applications risk mathematics investment and asset management

GENERALISED APPLICATIONS STAGE : GENERALISED APPLICATIONS STAGE actuarial control cycle life insurance general insurance pensions and social security health insurance & living benefits

PRACTISING STAGE : PRACTISING STAGE country specific terminology commercial environment legal & accounting environment practical applications in this context advanced applications professionalism & standards continuing professional development

WHAT NEEDS UPDATING? : WHAT NEEDS UPDATING? bibliography non-life statistical methods more on financial maths, financial risk management and solvency methods keep up with modern thinking reflect convergence of practice areas proposal to introduce finance subject

ACTUARIAL FOUNDATION STAGE (revised) : ACTUARIAL FOUNDATION STAGE (revised) financial mathematics survival models and simple applications risk mathematics investment and asset management finance and financial economics

INTERNATIONAL ACTUARIAL ASSOCIATION (IAA) : INTERNATIONAL ACTUARIAL ASSOCIATION (IAA) new constitution in June 1998 adoption of core syllabus and guidelines applies for students starting from 2005 onwards requirement for Full Member Associations transitional arrangements permitted

PURPOSES OF GUIDELINES AND SYLLABUS : PURPOSES OF GUIDELINES AND SYLLABUS to help establish new education systems for reviewing existing education systems to underpin bilateral mutual recognition for accreditation as Full Members of IAA

NATURE OF GUIDELINES AND SYLLABUS : NATURE OF GUIDELINES AND SYLLABUS not prescriptive for associations leaves structure of actuarial education open emphasis and packaging may differ additional requirements permitted overall balance of depth and breadth indicative reading provides guidance

IAA CORE SYLLABUS - 1 : IAA CORE SYLLABUS - 1 financial mathematics probability and mathematical statistics economics accounting modelling statistical methods

IAA CORE SYLLABUS - 2 : IAA CORE SYLLABUS - 2 actuarial mathematics * life insurance * general insurance * pensions * health care investment and asset management principles of actuarial management professionalism

STRATEGIC REVIEWS : STRATEGIC REVIEWS IAA Syllabus and Guidelines (by 2005) Groupe Consultatif Core Syllabus (by 2005) Faculty and Institute of Actuaries (for 2005) Society of Actuaries (with CAS) (for 2005) Institute of Actuaries of Australia (Parts 2/3) Joint Education Task Force 2005

CORE TECHNICAL (F&IoA) : CORE TECHNICAL (F&IoA) Financial Mathematics Finance and Financial Reporting Probability and Mathematical Statistics Models Contingencies Statistical Methods Economics Financial Economics + Business Awareness Module (non-examined)

CORE APPLICATIONS : CORE APPLICATIONS broad education in actuarial applications taught and assessed by real practical examples and courses exam on assets and investments exam on liabilities and asset/liability issues modelling course communications paper

CORE APPLICATIONS (F&IoA)ACTUARIAL CONTROL CYCLE (IAAust)ASSOCIATESHIP COURSE (SoA)PRINCIPLES OF ACTUARIAL MANAGEMENT (IAA) : CORE APPLICATIONS (F&IoA) ACTUARIAL CONTROL CYCLE (IAAust) ASSOCIATESHIP COURSE (SoA) PRINCIPLES OF ACTUARIAL MANAGEMENT (IAA) Stakeholders  General Environment Investment and assets • Risk Specifying the problem Input validation Developing the solution Living with the solution Monitoring/feedback  Professionalism

KEY ELEMENTS : KEY ELEMENTS meeting the needs of clients/customers awareness of risk consistency through pricing, valuation, etc measurement of value, profit and return holistic approach based on principles rather than practice area examples from a wide range of applications

ASSOCIATESHIP (F&IoA) : ASSOCIATESHIP (F&IoA) Core Technical + Core Applications + Module 1 of Professionalism Course = Associate of Institute (or Faculty) of Actuaries (AIA or AFA)

SPECIALIST AREAS : SPECIALIST AREAS Life insurance General insurance Pensions and other benefits Finance & Investment Health & Care

SPECIALIST LEVEL : SPECIALIST LEVEL 2 specialist technical papers (ST) 1 specialist application assessment in two parts 1 or 2 STs may be in another speciality dissertation as a possible alternative to one ST other qualifications instead of one ST structured work experience

WORK EXPERIENCE : WORK EXPERIENCE practical application of knowledge development of professionalism mentored experience development of work-based competencies maintenance of lifelong learning log-book start of Continuing Professional Development

ASSOCIATESHIP (SoA) : ASSOCIATESHIP (SoA) Validated by educational experience - Economics (E) - Corporate Finance (CF) - Applied Statistical Methods (AS) Validated by traditional actuarial examination - Probability (P) - Mathematics of Finance (MF) - Models for Quantifying Risk (M) - Construction and Evaluation of Risk Models (C) ASA Course – the Control Cycle

CONTINUING PROFESSIONAL DEVELOPMENT (CPD) : CONTINUING PROFESSIONAL DEVELOPMENT (CPD) lifelong learning philosophy need to maintain currency of knowledge need for personal development and challenge How formal does it need to be? re-certification not yet on the agenda

IAA PROCESS : IAA PROCESS still under discussion self-certification the first step audit by subcommittee of Education Committee difficulty of defining depth challenge of specialist qualifications

MUTUAL RECOGNITION : MUTUAL RECOGNITION IAA process may facilitate mutual recognition… … but at “Associateship” level bilateral agreements most likely exam for exam credit

A&A – DIPLOMA PROGRAM : A&A – DIPLOMA PROGRAM F&IoA programs in central & eastern Europe preliminary actuarial education not necessarily sufficient for IAA accreditation… … but may be a good start needs to lead on to full actuarial education process Basic Diploma Program (1 year) Advanced Diploma Program (1 year) Dissertation and defence (6 months)

BASIC DIPLOMA PROGRAM : BASIC DIPLOMA PROGRAM Financial mathematics Life insurance mathematics Statistics and probability Mathematics for non-life insurance Economics and investment Social security and private pension plans Principles and practice of life insurance Principles and practice of non-life insurance

ADVANCED DIPLOMA PROGRAM : ADVANCED DIPLOMA PROGRAM Demography Advanced actuarial mathematics Investment and asset/liability management Actuarial management of life insurance Actuarial management of non-life insurance Actuarial management of health insurance Principles of accounting in local environment Principles of law in local environment

CURRENT ISSUES : CURRENT ISSUES compliance with GC core syllabus upgrading basic education systems some introductory diploma programs still needed looking for funding partners (USAID?, IFC?) possibility of establishing regional centres seeking IAA Education Committee support

TRAINING THE TRAINERS : TRAINING THE TRAINERS 29 June – 9 July Oxford and London Incorporating Actuarial Teachers and Research Conference