Improve Hard and Soft Skills Through FAP
by Yanran Chen
As one of the academics in statistics who also has great passion for actuarial science education, I self-study in my spare time for actuarial designations. While waiting for the result of the final assessment of Fundamentals of Actuarial Practice (FAP), my last step toward the Associate of the Society of Actuaries (ASA) designation, I feel the need to share my thoughts on the countless benefits FAP has to offer actuarial candidates in improving hard and soft skills. When much of the focus is on the five preliminary exams, I want to remind candidates that FAP, a quiet gem among the SOA’s associateship designation requirements, is well worth earlier attention.
FAP is a self-paced e-course composed of eight modules, six end-of-module exercises, and two assessments (interim and final). Each module is self-contained, with later modules built upon earlier ones, addressing the Actuarial Control Cycle as a practical problem-solving framework with an amazing variety of online and offline readings as well as case studies. Starting FAP parallel to the Financial Mathematics (FM) exam and the Models for Life Contingencies (MLC) exam is absolutely doable since FAP encompasses review of bonds and annuities, life contingencies, and fundamental actuarial formulas for pricing, reserving, and funding. Additionally, an embedded discussion forum facilitates an interactive e-learning community.
The most stunning component of FAP, in my opinion, is the Excel spreadsheet model-based case studies in each module. These case studies expose candidates to workplace situations and suggest solutions to questions arising from a wide range of actuarial practice, including credit insurance, group term life, retirement benefits, structured settlement, and asset-liability management, to name a few. The Excel spreadsheet models are well documented. I suggest candidates not only click on cells to understand the calculations but also think about advantages of certain layouts of those spreadsheet models. It is noteworthy that some case studies incorporate scenario analysis and Monte Carlo simulation, the proficiency of which is required in most areas of actuarial practice, but are difficult to attain from the preliminary actuarial exams. Although candidates are not required to build a scenario testing model or perform a simulation from scratch, exposure to these techniques through case studies does broaden one’s vision and reveals a direction for improvement.
Besides case studies, FAP provides informative online and offline reads such as the SOA’s self-produced study notes, articles, research papers, selected chapters from reference books, and perspectives of practicing actuaries. Topics of those readings range widely from the history of the actuarial profession to broader roles of today’s actuaries, from the professional code of conduct to actuarial standards of practice, from data validation to selection of models and assumptions, from savings and loans crisis to subprime mortgage meltdown, from modeling mortality risks to pricing longevity bonds, and so on.
FAP targets principles and reveals commonalities. It brings together the experience of hundreds of SOA volunteers and related external sources to unveil the multiple facets of actuarial practice—if I was to explore them without the assistance of FAP, it would have taken much longer for me to gain a comprehensive overview of the actuarial profession.
As communication skills top the list of desired skills by many employers, candidates will find FAP an excellent platform to practice attention to detail and business writing. Candidates have the opportunity to polish skills for writing formal and informal memorandums as well as email correspondence for extensive workplace purposes, with or without time constraints, through end-of-module exercises and the interim and final assessments. Detailed directions and sample solutions to end-of-module exercises communicate to candidates the standards and expectations. Thinking through the case studies, plus the dynamics of read–knowledge–write–compare, make the experience of FAP, to some extent, more like taking multiple e-internships. With some or all of the FAP modules completed, candidates interviewing for an actuarial internship or industry job may have the advantage of being able to carry on more actuarial minded conversations with employers, helping them to stand out from the crowd.
Aside from what I have pointed out, I believe candidates will find FAP valuable in other ways depending on one’s background and the effort put into the course. Like many candidates, I started FAP after the five preliminary exams because I thought the five exams would help me most with understanding the actuarial profession. Now I have to say that only after FAP did I feel the knowledge that I gained from the five preliminary exams and Validation by Educational Experience (VEE) courses became connected.
My motive for writing this article is to share my findings and experience with FAP. If you are a candidate working your way through the preliminary exams, I encourage you to start FAP earlier if possible. Take FAP as a gas station of hard and soft skills enabling you to drive with more confidence on the roads of your actuarial career. If you are curious and would like a direct experience with FAP before registering for the course, then go for a 30-day free trial of the first module available on the FAP information page.
Yanran Chen, PhD is an assistant professor at the department of Mathematics and Computer Science, Benedictine College in Atchison, KS. She can be reached at yrchen2007@hotmail.com.