Educating Today’s Actuary
Educating Today's Actuary
By Peter Hayes
Change, they say, is the only constant. Welcome to the world of the SOA Education Committee, where we can't seem to stand still long enough to catch our breath, smell a rose or two and, oh yeah, find the time to let our clients get to know us.
Let our clients get to know us. What a novel idea! The ever–changing world of the Education Committee (for those of you who are confused, we even changed our name from the Education and Examination Committee earlier this year!) wasn't always ever–changing, and clients, in the form of candidates, members and employers, knew exactly what the E&E system was all about and what it took to become an actuary. Wise, old, 30–somethings knew all too well of the exam writing existence of the green, young, 20–somethings that worked for them: calculus, probability, theory of interest ... parts 1, 2, 3 and 4 ... every student and every actuary before them knew the system, and knew what it took to get through.
What a difference a quarter century makes! Somewhere in that time the line–of–sight between the Education system and a chunk of the clients it was established to serve went missing. We aim to restore that line–of–sight through this and future articles.
Welcome to your opportunity to both engage and re–engage with the SOA's Education system. Remember when knowing what it took to become an actuary was easy? When all you had to do was be able to count to eight? (or nine? or 10?—such was the nature of change back then, when it consisted of nothing more than adding or removing an exam). When you knew what Exams 1, 2 and 3 all meant. Do you wonder what it takes to become an actuary today? Do you wonder if it's easier or harder? Broader or more specialized in scope? Do you wonder if Education is serving your profession well today—through the delivery of relevant syllabus material and rigorous testing—at a caliber that makes you proud and gives you confidence?
WHO ARE WE?
We want to answer these questions, because a lot of Education's clients—indeed, a lot of the SOA's clients—are asking them. So who are we? We are the dozens of staff and hundreds of volunteers who work in the SOA Education system. I have the privilege and the opportunity to try to answer some of these questions and, hopefully, a whole bunch more on behalf of these dedicated workers. I have just finished my term as the Education Committee's general chairperson and have moved on to a wonderful new role, the cleverly titled past general chairperson.
One of my new responsibilities as past general chairperson will be to sponsor a series of articles, like this, that inform our clients about the Education system. Now before you stop reading and turn the page, consider whether there's something in it for you. You are, after all, a client of the SOA, and it's with you we want to establish a line–of–sight—but we also want you to establish a line–of–sight with us. So I invite you to read on, and, if you want, respond. Line–of–sight, after all, is about communication, and I'll boldly assert that there is not a single member of the profession that education doesn't touch in some way—if not directly, then at the very least in terms of how you perceive the profession today and the influence that education and its delivery have on that perception.
I actually remember Education when it was 10 exams. That was the system I started in, and I'll happily admit that Jordan has a meaning for me that it does not have for anyone else in my office. The system got blown up into a hundred little pieces just as I was finishing my fellowship, and it was the hundred–little–exams system of the late '80s in which I started as a volunteer. I was around when the system was put back together in eight (or so) not–all–exam big pieces, and through the redesign that occurred in this decade.
The feedback we've gotten from clients, whether they be students, members or employers, to the changes to the Education system has not always been positive. Some of the criticism has been well–founded. Some, on the other hand, has been borne of a lack of understanding and mistrust. I am often surprised at how reluctant we sometimes are to substitute facts for appearances (or perceptions) when it comes to issues of our own profession.
BECOMING AN ACTUARY TODAY
Which brings us back to educating actuaries, and what it takes to become an actuary today. At its highest level, educating actuaries hasn't changed at all; we've always set a syllabus, determined an appropriate method of delivering the content embedded in that syllabus, and tested whether the content has been sufficiently received. If you look closely at these three key activities, though, you'll see that the detail has changed enormously through the years.
Exam names have become a veritable alphabet soup of acronyms, a far cry from the simple one through eight (or nine or 10 depending on your vintage) of the good old days. But they're still exams, and they're still difficult. In fact, they're still actuarial exams, and the connotation associated with that phrase, to anyone who has ever passed one, has not changed one bit. They're every bit as hard as they ever were.
We've discovered, though, that independent study of a syllabus and sitting for a formal exam is not the only way to deliver the content and measure the skills and knowledge that our profession demands of its members. Part of that comes from the realization that independent self–study—long the bastion of syllabus delivery—is not the only way to develop and transfer knowledge. In fact, it is often inferior to other delivery methods that have evolved over the years, or, in some cases, that have always been there.
Take a university setting, for instance. We have, by now, acknowledged and accepted that calculus and statistics, while critical skills for actuaries, are better delivered in a classroom setting. Does the fact that we no longer have a calculus exam somehow diminish the voracity of other Preliminary Education exams or that calculus is no longer a prerequisite for passing those exams? Of course not!
In fact, I have had the opportunity to sit through the final review of questions that find their way into the Preliminary Education exams. The members who construct these exams are skilled mathematicians who can shape and refine questions through rigorous technical and intellectual discussion and debate. The language they speak is of probability distributions that are a testament to advances in the academic fields of probability and statistics, to modern applications of those advances, and to the "freshness" of both the syllabus and the examiners. Part of becoming an actuary today is successfully completing a series of technical Preliminary Education exams that are at least as rigorous, and perhaps more so, than those of eras past.
Do we test calculus? You bet we do! And we do it in a way that introduces future actuaries to the work actuaries do, that makes them start to think about problems like actuaries need to think about problems, and to learn to solve those problems. Today's actuarial students might not see a question on l'Hôpital's Rule, but their level of mathematical skill as compared to those of us that did should not be questioned.
The skills an actuary needs today have changed and evolved over the years, too, and at a certain level the Education system has evolved as a response to meeting the demand for this changing set of skills. At another level, though, the evolution of the Education system reflects a proactive approach to today's delivery of education and learning.
Nowhere is this truer than with the introduction of e–Learning. Education is our new name for the system that delivers content and helps students build their actuarial skills and knowledge, and it came about because the old name—Education and Examination, or E&E—was no longer reflective of what we were doing. Education in E&E was largely synonymous with syllabus development or curriculum, and Examination was just what it implied, the construction and administration of examinations. e–Learning is neither of those and both of those at the same time, and the difference it has made in the way we view the education of actuaries has been profound.
e–LEARNING HAS TAKEN US HIGHER
e–Learning has driven us to new heights. It has shaped the entire redesign of the education system. Even those parts that kind of look the same—the early 2.5– and 3–hour Preliminary Education exams to examine basic actuarial skills—have evolved with a different mindset. Preliminary Education was the first part of the redesign, and it set a high standard indeed for the remainder.
To be sure, there have been bumps in the implementation of e–Learning, but by and large the feedback from candidates has been overwhelmingly positive. It is modern in its approach, not just from the perspective of its use of electronic media, but also as an education delivery tool. The SOA is, first and foremost, an education organization. It employs expertise both at the staff level and through its relationships with external consultants to ensure that its methods are modern and relevant. And when it doesn't get something right, it fixes it.
FAP—A SOLID FOUNDATION
The centerpiece of e–Learning has been the Fundamentals of Actuarial Practice, or FAP, course. FAP is a series of eight modules and two written assessments delivered online and available all the time. Candidates can easily match their schedule to working through the course. FAP incorporates automatic feedback mechanisms to allow continuous monitoring of the delivery of the education. The material presented is based on the Actuarial Control Cycle and is not practice–specific, although many of the examples and case studies are related to the current areas of practice. The goal is to provide education that will be useful and relevant for our candidates in the future—not just for today.
FAP itself, although relatively new, has evolved based on the feedback we have received. Early on, for instance, it became clear that evaluating the candidate's learning by way of traditional multiple choice examinations was not consistent with the way in which material was both taught and learned. As a result, the original FAP examinations were replaced with written assessments that are a better fit—that complement the teaching and the learning.
Some have viewed FAP as a lowering of standards. No exams? How can you test actuarial knowledge without an actuarial exam? Surely this lessens the rigor of the process, and therefore diminishes the value of actuarial credentials—including my fellowship!
Such criticism misses the point of what e–Learning allows us to do, what we intended to do with e–Learning, and what we don't purport e–Learning to be. It is a fundamentally different way of transferring knowledge, thoroughly modern in its approach. It delivers new skills that actuaries need in today's world, and it does so in a way that helps shorten the travel time to fellowship without reducing standards one iota. e–Learning is now an expected part of any candidate's educational experience. Don't believe me? Just ask a candidate.
Placed in the larger context of educating actuaries from start to fellowship, e–Learning is helping us build better actuaries for the future. This is something we should all applaud!
The other criticism we have received of FAP is that plagiarism is rampant and it's easy to get through the course, again leading to lower standards. This, too, fails to substitute facts for appearances. Attempts at cheating have, as they always have, been dealt with harshly. In this past year, we have imposed two lifetime bans for serious offenses. These are the first such bans in many years, and we will continue to pursue and investigate—and discipline, where warranted—instances of cheating. This, however, is not a change. Although the vast majority of candidates respect the system, attempts to cheat have always been pursued, investigated, and when warranted, disciplined. Our membership should expect nothing less.
The road to becoming an actuary concludes, appropriately enough, with a combination of traditional fellowship–level exams and modern e–Learning fellowship modules. These are sorted by specialty track, and the alphabet soup of acronyms continues unabated! The fellowship component is the final piece of the redesign, and it culminates in a modernized e–Learning decision making and communication module followed by an updated Fellowship Admissions Course (FAC). Our candidates are asked to practice new skills as part of this process and to challenge themselves. Our experience to date is that they are enjoying the experience. This has become a big event, complete with graduation dinner and presentation of diplomas—a fitting finale to years of hard work.
The clients of Education are diverse, and we must continue to serve them with distinction. This starts with dozens of staff and an army of volunteers, and this will be the focus of our next article. Other articles will feature e–Learning, whose influence on the system cannot be overstated. It has influenced our thinking and has become and integral part of our vision for Education. We'll segue from there to Continuing Education and the Competency Framework, and from there to the value of the credential itself and the importance of Education in maintaining and enhancing that value.
We mentioned earlier that line–of–sight means communication. If we can answer questions, promote discussion—if we can help substitute facts for appearances—we'd like to do so. So ask away, comment away, but please don't disappear! Education touches us all, and it is something about which all of us should care. Thanks for hanging in to the end.
Comments referencing this article may be sent to firstname.lastname@example.org.
Peter Hayes, FSA, FCIA, is a principal with Eckler Ltd. He can be contacted at email@example.com.