Planning a New Actuarial Science Major at Iowa State University, Study notes of Mathematics

Download Planning a New Actuarial Science Major at Iowa State University and more Study notes Mathematics in PDF only on Docsity! 1 FORM A Board of Regents, State of Iowa REQUEST TO IMPLEMENT A NEW BACCALAUREATE, MASTERS, DOCTORAL, OR FIRST PROFESSIONAL DEGREE PROGRAM August 24, 2017 THE PURPOSE OF ACADEMIC PROGRAM PLANNING: Planning a new academic degree program provides an opportunity for a Regent university to demonstrate need and demand as well as the university’s ability to offer a quality program that is not unnecessarily duplicative of other similar programs offered by colleges and universities in Iowa. Institution: Iowa State University CIP Discipline Specialty Title: Actuarial Science CIP Discipline Specialty Number (six digits): XXXXXXXXXXXX Level: Bachelors Title of Proposed Program: Major in Actuarial Science Degree Abbreviation (e.g., B.S., B.A., M.A., Ph.D.): B.S. Approximate date to establish degree: Month: August Year: 2018 Contact person: (name, telephone, and e-mail) Dr. Rahul A. Parsa, 515-243-2593, raparsa@iastate.edu College that will administer new program: Students majoring in Actuarial Science will be College of Business students and they will get a degree in business. The College of Business will partner with the Departments of Mathematics and Statistics in the College of Liberal Arts and Sciences to offer and manage the courses for the portion of the curriculum directly related to actuarial science. S17-5 2 Please provide the following information (use additional pages as needed). Do not use acronyms without defining them. 1. Describe the proposed new degree program, including the following: a. A brief description of the program. If this is currently being offered as a track, provide justification for a standalone program. The proposed major in actuarial science will provide the initial training for students to become an actuary. According to the Society of Actuaries (SOA) website (https://www.soa.org/future-actuaries/what-is-an-actuary/), “Actuaries measure and manage risk. Actuaries have a deep understanding of mathematics, statistics and business management. With this, they help businesses grow and provide value to their customers. Actuaries help leaders make strategic decisions and consumers prepare for their future. Actuaries are in demand. They work for and with businesses with a financial focus. Businesses including insurance-life, health, property-casualty, even pet insurance. Also, banking, investments, government, energy, e-commerce, marketing, employee benefits, product development, enterprise risk management, predictive analytics, consulting and more.” No program currently exists at Iowa State University that provides the full set of coursework desired by industry. The Departments of Mathematics and Statistics currently offer some of the courses needed to become an actuary, but students majoring in either of these two disciplines don’t get the business background that is also desired by industry (see comments from employers in Appendix A). Insurance products are by definition financial products that are sold and as such, actuaries need knowledge of accounting concepts, finance and financial investments, marketing concepts, etc. Currently, the only way a student can get this business knowledge is to add a double major in business, which is costly and time consuming. Creating an actuarial science major within the College of Business would eliminate this problem. In addition, several courses needed to provide the knowledge necessary to pass the preliminary exams given by the Society of Actuaries (SOA) and the Casualty Actuarial Society (CAS) are not currently taught at Iowa State University. (Loss Models, Life Contingencies, Risk Management Derivatives, and Credibility Theory). These courses are part of the proposed major in actuarial science. Thus, students will be better prepared to pass the SOA and/or CAS exams, which enhances their prospects for a successful career as an actuary. Students majoring in actuarial science will be students of the College of Business. The admission requirements to the College and to its professional program for students wishing to major in actuarial science will be the same as for all other majors. The curriculum will require 31 credits of general education coursework, 23 credits of foundation coursework, 21 credits of supporting courses, 24 credits of core coursework, and 25 credits of major coursework (124 total credits). The general education, 5 The foundation, supporting, and core business classes required for the actuarial science major are already being taught in the College of Business, as are most of the finance courses required for the program. The statistics courses required are currently being taught, as are most of the required mathematics courses. Five new courses specifically needed to prepare the students for the SOA/CAS preliminary exams will need to be developed. Three of these courses will be taught by College of Business faculty in the Department of Finance and two will be taught by faculty from the Department of Mathematics. Descriptions of these new courses can be found in Appendix E. It is possible that students currently majoring in finance, mathematics, or statistics may be interested in these new courses as well. The major in actuarial science is expected to draw additional high quality students from high schools in Iowa and other Midwestern states to study at Iowa State University. It is also expected that companies in the insurance industry will come here to recruit these high quality actuarial science students. This should enhance the reputations of the College of Business and the Departments of Mathematics and Statistics. f. The relationship of the proposed new program to existing programs at other colleges and universities in Iowa, including how the proposed program is different or has a different emphasis than the existing programs. The University of Iowa has an actuarial science program located in the Department of Statistics and Actuarial Science and the University of Northern Iowa has a program located in the Department of Mathematics. Both programs lack the broad based foundation in business that our conversations with the insurance industry indicated is strongly desired. Drake University in Des Moines does have an actuarial science program located in the College of Business. However, Drake University is a private university with high tuition (currently $19,458 per semester for students entering in the 2017-18 academic year), making it unaffordable for many students. The College of Business and the Departments of Mathematics and Statistics are well- positioned to deliver high-quality actuarial science students who can complete their degree in four years of study. The College of Business has an excellent reputation with both industry and students and does well in national rankings. The Departments of Mathematics and Statistics have excellent reputations and are highly ranked as well. In all cases, most of our tenure track faculty are active researchers and continue to contribute to their field of expertise, which ensures they stay up-to-date with current trends in industry. g. Special features or conditions that make the institution a desirable, unique, or appropriate place to initiate such a degree program. Iowa State University is the perfect home for the proposed Bachelor of Actuarial Science program. We are close to Des Moines, which is the second largest insurance center in the United States. This creates a ready and easily accessible market for our students. The close proximity of this market makes it easy to maintain contact with the companies 6 hiring our students and to stay up-to-date on current changes in the industry which might affect our program. As already mentioned, the program would draw on the existing strengths of the College of Business and the Departments of Mathematics and Statistics. As indicated below, the College of Business and the Departments of Mathematics and Statistics already have most of the necessary faculty and required expertise to provide an excellent program (although some additional faculty will be required to handle growth in the program). The program fits in well with the College of Business’ educational mission and with that of Iowa State University as well. h. Are the university’s personnel, facilities, and equipment adequate to establish and maintain a high quality program? Most of the courses required for the actuarial science major already exist at Iowa State University and are being taught by highly qualified faculty in the College of Business and the Departments of Mathematics and Statistics. The College of Business hired Dr. Rahul Parsa in the fall of 2015. Dr. Parsa was formerly the Director of the Actuarial Science Program for five years at Drake University. He has over 15 years of experience in teaching actuarial science courses and was recently asked to be on the examination committee for the Casualty Actuarial Society (a position he accepted). He will be the lead faculty member for the actuarial science major. Five new courses will be required for the Actuarial Science program, three of them will be taught by faculty in the College of Business Finance Department, and two by faculty in the Department of Mathematics. Dr. Parsa will be teaching two of the three new courses in the College of Business while the remaining College of Business course will be taught by an existing faculty member in the Department of Finance. The Department of Mathematics may need to hire a faculty member to teach the two new Life Contingency courses. This is dependent on the load of their existing faculty, which could change due to anticipated student growth at the university by the time the major is implemented and the two Life Contingency courses that are required. The Department of Mathematics has indicated their willingness to staff these courses. As demand for the actuarial science major increases, additional sections of courses may have to be opened to accommodate growth. The tuition revenue received from the program should be adequate to hire the needed faculty. The College of Business is housed in the thirteen year old Gerdin Business Building. The Gerdin Business Building has state-of-the-art research and instructional technology. Other than faculty and classroom space, the main resources needed to teach the program are computer hardware and software. These resources are already available in the Gerdin Business Building. i. How does student demand for the proposed program justify its development? When our Undergraduate Recruitment Coordinator asks potential College of Business students what they would like to major in, they often mention actuarial science. High school students often inquire whether we have an actuarial science program within the 7 College of Business as well. In fact, on the latest PSAT Test Taker survey, interest in actuarial science has increased by 143% over the last six years. While interest in actuarial science is still lower than most other business majors, interest in the major appears to be increasing. Enrollment in actuarial science at Drake University adds support to this information. Drake University has over 300 students in the program (almost 10% of the student body and 1/3rd of the college). Drake University is a private university with very high tuition which makes it unaffordable for many Iowa students, a group that Iowa State University predominantly serves. Iowa State University undergraduate business student tuition is among the lowest of our peers. The low cost and high quality of the proposed program at Iowa State University should make it very attractive to both in-state and out-of-state students. In addition, Dr. Rahul Parsa, who was formerly the Director of the Actuarial Science Program at Drake University played a major role in the recruitment efforts at Drake University. We believe the success he had at Drake University can be replicated at Iowa State University. Thus, we believe sufficient student demand exists to have a successful program. 2. Describe the state and/or national workforce need and/or demand for graduates of the proposed program currently and in the foreseeable future (provide documentation about the current sources of data used to estimate need and demand). Actuaries are highly sought after and actuarial jobs rank among the best jobs in the country. According to the Bureau of Labor Statistics, the number of jobs for actuaries in 2014 was 24,600. This demand is expected to grow by 18% over the next 10 years, bringing the total number of jobs in the U.S. for actuaries to 29,028. This far exceeds the average growth rate for all occupations of 7%. While the total number of jobs is not large, the demand for actuaries will exceed that amount due to individuals being promoted to upper level management positions or leaving actuarial jobs for opportunities elsewhere. In addition, actuarial jobs tend to be concentrated in cities such as Des Moines that have a high concentration of insurance companies. In order to gauge demand for this type of degree program in Iowa, we held meetings with a number of major insurance employers, most of who are in Des Moines. These employers included Athene USA, EMC Insurance Companies, Principal Financial Group, PricewaterhouseCoopers LLP, Fidelity & Guaranty Life Insurance Company, and LTCG. We outlined the proposed program and asked for their feedback on the perceived demand for such a skill set. The responses ranged from positive to enthusiastic. In fact, one company indicated they had approximately 20 open positions for actuaries at any one time. The company representatives we talked to were also unanimous in their opinion that future actuaries need business skills in addition to passing the exams given by the SOA/CAS, and all were in agreement that an actuarial program integrated into a business curriculum gives students the best preparation to be an actuary. From these meetings we believe the current demand for actuarial science students exceeds the supply and that an actuarial science 10 the program during the first seven years of the program. a. Undergraduate Our proposal is for an undergraduate major in actuarial science and all students in the major would be students in the College of Business. In all actuarial science programs, some students will not be able to handle the coursework and will transfer out of the program to other programs in the university. Most of this attrition is expected to happen between the second and third year of the program. This attrition is taken into account in our estimates. As the table below shows, the program is expected to enroll approximately 170 students once steady state has been reached. Undergraduate Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Total Majors 15 40 80 120 150 165 170 170 Non-Majors 0 0 0 0 0 0 0 0 b. Graduate Since this major is for undergraduate students, no graduate students will be allowed in the program. Graduate Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Majors 0 0 0 0 0 0 0 0 Non-Majors 0 0 0 0 0 0 0 0 c. What are the anticipated sources of these students? We will actively recruit students for the major as part of our normal recruitment process for the College of Business. Details on the actuarial science major will be included in all of our marketing materials and on our website. We will also make sure that high schools, especially those in Iowa, are aware of the new major. Once we make these counselors in these schools aware of the program, we believe students will be attracted to enroll at Iowa State University. Students already at Iowa State University will also be made aware of the program. Many students change majors once they arrive at Iowa State University, primarily because they don’t enjoy their initial choice of a major. For some of those students, actuarial science may be a good alternative choice. 5. If there are plans to offer the program away from the campus, briefly describe these plans, including potential sites and possible methods of delivery instruction. Will off- campus delivery require additional HLC accreditation? We do not currently have any plans to offer this program away from campus. 6. Has the proposed program been reviewed and approved by the appropriate campus committees and authorities? 11 The proposed program has been reviewed and approved by the appropriate campus committees. The program review and approval process is shown below. The Academic Program Approval Voting Record can also be found in Appendix H. a. The Department of Finance in the College of Business voted overwhelmingly in favor of approving the proposal (15 in favor, 1 against, and 1 abstention) on December 2, 2016. b. The College of Business College Curriculum Committee voted unanimously (5 in favor, 0 against) to approve this proposal on February 22, 2017. c. The College of Business Faculty voted (61 in favor, 3 against) to approve this proposal. The voting was done electronically and tallied on March 29, 2017. d. The proposal has been discussed and developed with the cooperation of the Departments of Mathematics and Statistics at Iowa State University. Their letters of support for the major are included in Appendix G. e. The Faculty Senate Curriculum Committee voted unanimously in favor of approving the proposal (7 in favor, 0 against, 0 abstained) on September 8, 2017. f. The Faculty Senate Academic Affairs Council voted unanimously in favor of approving the proposal (8 in favor, 0 against, 0 abstained) on October 3, 2017. 7. List date the program proposal was submitted to the Iowa Coordinating Council for Post High School Education (ICCPHSE) and results of listserv review. (THIS WILL BE FILLED IN BY THE PROVOST OFFICE.) 8. Will the proposed program apply for programmatic accreditation? When? The actuarial science major will be included as part of our business programs to be reviewed by The Association to Advance Collegiate Schools of Business (AACSB) at our next Continuous Improvement Review, which will take place during the 2019-2020 academic year. Once the major is well established, we will discuss with our industry partners and with members of our College of Business advisory councils whether the pursuit of additional accreditations would be worthwhile. 9. Will articulation agreements be developed for the proposed program? With whom? In order to finish the actuarial science major in four years and take the actuarial science preliminary exams as planned, it would be imperative that students start the program as a freshman at Iowa State University. Thus, no articulation agreements are planned with programs at community colleges or other four year institutions. However, we will continue to honor any course level articulation agreements with community colleges that are in place at Iowa State University. In addition, if a student from a community college or other four year institution wants to transfer to Iowa State University and major in actuarial science, they are welcome to do so. However, it is unlikely they would be able to finish the major in a total of four years (i.e., time from when they started their degree elsewhere to the time they finished the actuarial science major at Iowa State University). 12 10. Will there be opportunities for student internships? There should be ample opportunities for internships. Des Moines is the second largest insurance center in the country, making it a likely city for internships. Internships with insurance companies in other cities, with corporations, or with the government are also possible. We have an excellent Career Services Center in the College of Business and they will assist students in their search for internships. The progression of coursework was designed to enable students to compete for internships starting between their sophomore and junior years. 11. Describe the faculty, facilities, and equipment that will be required for the proposed program. As mentioned in 1h, most of the courses required for the actuarial science major already exist at Iowa State University and are being taught by highly qualified faculty in the College of Business and the Departments of Mathematics and Statistics. The College of Business hired Dr. Rahul Parsa in the fall of 2015. Dr. Parsa was formerly the Director of the Actuarial Science Program for five years at Drake University. He has over 15 years of experience in teaching actuarial science courses and was recently asked to be on the examination committee for CAS (a position he accepted). He will be the lead faculty member for the actuarial science major. Five new courses will be required for the Actuarial Science program, three of them will be taught by faculty in the College of Business Finance Department, and two by faculty in the Department of Mathematics. Dr. Parsa will be teaching two of the three new courses in the College of Business while the remaining College of Business course will be taught by an existing faculty member in the Department of Finance. The Department of Mathematics may need to hire a faculty member to teach the two new Life Contingency courses. This is dependent on the load of their existing faculty, which could change due to anticipated student growth at the university by the time the major is implemented and the two Life Contingency courses are required. The Department of Mathematics has indicated their willingness to staff these courses. As demand for the actuarial science major increases, additional sections of courses may have to be opened to accommodate growth. The tuition revenue received from the program should be adequate to hire the needed faculty. The College of Business is housed in the thirteen year old Gerdin Business Building. The Gerdin Business Building has state-of-the-art research and instructional technology. Other than faculty and classroom space, the main resources needed to teach the program are computer hardware and software. These resources are already available in the Gerdin Business Building. 12. From where will the financial resources for the proposed program come (list all that apply, e.g., department reallocation, college reallocation, grants, new to the university)? The financial resources for the program will come almost entirely from student tuition. The program is projected to be self-sustaining over time. The tuition revenues shown below are 15 Appendix A: Comments from Employer Interviews Companies Contacted Are part of our proposal development, we talked to employees of Athene USA, EMC Insurance, Principal Financial Group, PricewaterhouseCoopers LLP, Fidelity & Guaranty Life Insurance Company, and Long Term Care Group, Inc. Summary of overall comments: Actuaries were unanimous in their opinion that future actuaries need business skills in addition to passing the exams given by the SOA/CAS. All were in agreement that an actuarial program integrated into a business curriculum gives students the best preparation. Insurance is a business and knowledge of marketing, management, accounting, finance, information systems, etc., and how they interact with each other is vital to contributing to the success of the enterprise. In the case of the insurance industry, knowledge of investments, bonds, stocks, financial accounting and reserves, and dividends is critical. In addition, there was consensus for the need for soft skills – communication (written and oral), team work, public speaking, and leadership. One former senior vice president and chief actuary of a company articulated it well when she said it is not good enough for actuaries to do fancy mathematics; they have to communicate their results to non-technical people. A second vice president of a different company looked at actuarial students as needing both skills and talent. In his view, talent is the ability to perform actuarial work. Skills are acquired and developed and eventually differentiate one student from another. In his view, most schools just focus on knowledge transfer and not at developing skills. Skills are developed only through repeated practice and are essential. Specific Comments: (Note: the specific identify of the individuals have been withheld to protect confidentiality) 1. Company #1 representative, Former Senior Vice President and Chief Actuary, respectively, provided the following comments: a. Communication skills are critical for actuaries. Actuaries should be able to explain their results in non-technical people. b. Finance - Knowledge of investments is very important. c. Internships - Students should have some internship experience before graduation. d. Case Competition - Hosting a case competition for actuaries would provide good experience for students. e. She did not think additional math work does any good for students. She thought other skills like analytics is better. f. She thought a graduate program like an MBA with actuarial preparation will be good for students. 2. Company #2 representatives, Chief Actuary and Casualty Actuary made the following detailed comments: a. Analytics/Data Science. Casualty actuaries use a lot of analytics in their work. More importantly, they thought it will provide access to other jobs. 16 b. Case competition. They thought case competitions would be good for our students. c. Leadership in college organizations is important. d. Communications skills are important e. Team work is important. 3. Company #3 representative, VP Valuation Actuary This individual works very closely with recruitment of interns and training. He had very clear and detailed ideas on what a student should do and have. A summary of his comments is shown below. a. He looked at a student as having skills and talent. In his view, talent is the ability to perform actuarial work. Skill is one that differentiates one student from another. b. In his view, most schools just focus on knowledge transfer and not at developing skills. c. Skills are developed only through repeated practice and are essential. d. Development of most people is accomplished by developing skills. e. Actuarial Skills: Critical thinking, written communication, oral communication, honesty, crisis management, leadership, professional image. f. Other skills: Exam preparation, Accounting, finance, investments, and analytics. g. VEE must be part of the curriculum as actuaries need them but will not receive any credit from employer (extra salary) for passing them. On the other hand, if a student passes the actuarial exams, they will get a permanent bump in their salary. h. He thought the program must be in business school as it prepares students in these skills. i. He was very critical of a program that was located in the statistics department. He thought they were just an exam preparation program and did not provide any skills to the students. 4. Company #4 representatives, Senior Actuarial Analyst and Actuarial Analyst, respectively. We spoke to these individuals via a conference call. Both work primarily in long-term care insurance (as health actuaries). Here is what they thought actuarial students must have: a. Business skills are essential b. Communication and presentation skills c. Writing skills d. Math and tech savvy; have to be good at Excel, VBA, SQL, etc. e. Explain the numbers – should be able to take the numbers and tell the story. f. Explain their ideas in laymen terms g. Additional Finance course work is helpful – investments. Know the concepts. h. GAAP and Accounting concepts i. Exams: good to have two exams passed. They felt passing too many exams is not very useful; they didn’t feel it is fair to pay someone a five exam salary when they have no experience. j. They thought students should have two internships – one in consulting and one in the industry k. Prefer a student with 1 exam and two internships over 5 exams and 0 internships. 17 l. Temple University has course in case competition (they don’t know all the details). The students spend first month prepping for the project. Second month they get the case. Second and third month, they work on the case. Fourth month, they make the presentation. m. They were adamant the student should not be a mathematics major. n. Experience with SAS is good o. Use old exam questions in the classroom p. Suggestion: Maintain a resume book of all students 5. Company #5 representatives thought the following things were important for an actuarial program a. Analytics is big and insurance companies need analytical skills b. Traditional Finance is good (embellishment) - Options and Hedging are good topics c. Need students to be more than technicians. Doing math is not enough. They have to understand the business perspective. d. Students should be able to work independently and think on their own e. Strong communication skills are needed f. Students that need sponsorship are a challenge g. Students passing too many exams is bad, 2 or 3 exams is good h. Students should be intellectually curious. i. Make personal insurance class a requirement j. Incorporate analytics into the program k. Writing and presentation skills are critical l. Need computer skills - require computer science course 6. Company #6 representative thought the following things were important for an actuarial program a. Well rounded student is important b. Program must place students into good jobs; good track record for jobs c. Good internships d. Hot area: Data Analytics; exposure to it is very helpful e. Skills: Technically sound with good intuition; work ethic, ownership, pride in their work, team work f. Communication skills, both written and oral. g. Strategic thinking h. Business school gave him the big picture i. Macroeconomic focus j. Start out narrow – just do the work and as they move-up, they need big picture k. One to two exams l. Don’t teach to the exams 20 Appendix C – Sample Four Year Plan without Validation by Educational Experience (VEE) Courses FRESHMAN Fall Spring BUSAD 102/103 (1 cr.) ACCT 284 (3 cr.) ECON 101 (3 cr.) ECON 102 (3 cr.) COM S 113 (3 cr.) MATH 166 (4 cr.) ENGL 150 (3 cr.) BUSAD 250 (3 cr.) PHIL 230 (3 cr.) STAT 226 (3 cr.) MATH 165 (4 cr.) LIB 160 (1 cr.) 17 cr. 17 cr. SOPHOMORE Fall Spring FIN 301 (3 cr.) STAT 341 (4 cr.) MATH 265 (4 cr.) FIN 320 (3 cr.) ACCT 285 (3 cr.) MGMT 372 (3 cr.) STAT 326 (3 cr.) ENGL 250 (3 cr.) BUSAD 203 (1 cr.) GEN ED (3 cr.) MATH 240 (3 cr.) Students should take Financial Mathematics exam during winter break Students should take Probability exam during summer between sophomore and junior year 17 cr. 16 cr. JUNIOR Fall Spring FIN 424 (3 cr.) RISK MGMT DERIVATIVES (FIN XXX) (3 cr.) LOSS MODELS I (ACSCI XXX) (3 cr.) ENGL 302 (3 cr.) SP CM 212 (3 cr.) SCM 301 (3 cr.) MIS 301 (3 cr.) GEN ED (3 cr.) GEN ED (3 cr.) CREDIBILITY THEORY (ACSCI XXX) (3 cr.) Students should take Investment and Financial Markets Exam during summer between junior and senior year 15 cr. 15 cr. SENIOR Fall Spring LIFE CON I (MATH XXX) (3 cr.) LIFE CON II (MATH XXX) (3 cr.) MGMT 370 (3 cr.) GEN ED (3 cr.) MKT 340 (3 cr.) MGMT 478 (3 cr.) GEN ED (3 cr.) ACCT 215 (3 cr.) GEN ED (3 cr.) 15 cr. 12 cr. 124 credits minimum – This assumes students can dual assign the international perspective and U.S. diversity requirements with other general education requirements. 21 Appendix D – Sample Four Year Plan with Validation by Educational Experience (VEE) Courses FRESHMAN Fall Spring BUSAD 102/103 (1 cr.) ACCT 284 – for VEE in Accounting (3 cr.) ECON 101 – for VEE in Microeconomics (3 cr.) ECON 102 – for VEE in Macroeconomics (3 cr.) COM S 113 (3 cr.) MATH 166 (4 cr.) ENGL 150 (3 cr.) BUSAD 250 (3 cr.) PHIL 230 (3 cr.) STAT 226 (3 cr.) MATH 165 (4 cr.) LIB 160 (1 cr.) 17 cr. 17 cr. SOPHOMORE Fall Spring FIN 301 (3 cr.) STAT 341 (4 cr.) MATH 265 (4 cr.) FIN 320 (3 cr.) ACCT 285 (3 cr.) MGMT 372 (3 cr.) STAT 326 (3 cr.) ENGL 250 (3 cr.) BUSAD 203 (1 cr.) GEN ED (3 cr.) MATH 240 (3 cr.) Students should take Financial Mathematics exam during winter break Students should take Probability exam during summer between sophomore and junior year 17 cr. 16 cr. JUNIOR Fall Spring LOSS MODELS I (ACSCI XXX) (3 cr.) RISK MGMT DERIVATIVES (FIN XXX) (3 cr.) FIN 424 (3 cr.) ENGL 302 (3 cr.) SP CM 212 (3 cr.) SCM 301 (3 cr.) MIS 301 (3 cr.) GEN ED (3 cr.) GEN ED (3 cr.) STAT 342 – for VEE in Mathematical Stat. (4 cr.) MATH 207 (3 cr.) CREDIBILITY THEORY (ACSCI XXX) (3 cr.) Students should take Investment and Financial Markets Exam during summer between junior and senior year 18 cr. 19 cr. SENIOR Fall Spring LIFE CON I (MATH XXX) (3 cr.) LIFE CON II (MATH XXX) (3 cr.) MGMT 370 (3 cr.) GEN ED (3 cr.) MKT 340 (3 cr.) MGMT 478 (3 cr.) GEN ED (3 cr.) ACCT 215 (3 cr.) GEN ED (3 cr.) FIN 310 – for VEE in Corporate finance (3 cr.) 15 cr. 15 cr. 134 credits minimum including VEE coursework – This assumes students can dual assign the international perspective and U.S. diversity requirements with other general education requirements. 22 Appendix E: Catalog Description of New Courses ACSCI XXX - Loss Models I: Probability distributions used to model uncertain events in actuarial practice. Aggregate models, evaluating the effect of various coverage modifications such as deductibles and limits. Construction of empirical models, calculations of common risk measures, and calculations of commonly used severity and frequency models. Various methods for estimating distributional parameters and their properties. ACSCI XXX – Credibility Theory: Bayesian estimation, including conjugate priors, posterior distributions, and the Poisson-gamma model. Credibility theory, including limited fluctuation credibility, applying Bayesian analysis for both discrete and continuous models, Buhlmann and Buhlmann-Straub models, and their relationship to Bayesian models. Simulating discrete and continuous random variables and the bootstrap method for estimating mean squared error. MATH XXX – Life Contingencies I: Present value determination of random variables associated with benefits and expenses for life insurance and annuities, premium calculation methodologies, parametric survival models, single life state, benefit premiums, and reserves. MATH XXX – Life Contingencies II: Multiple life functions, multiple decrement models, reserving for insurance and annuities, and applications to pension plans and retirement benefits. FIN XXX – Risk Management Derivatives: Advanced models for options and bond pricing. Geometric Brownian motion, risk-neutral pricing, no-arbitrage pricing models, exotic options, pricing options through simulation, and applications of derivatives to hedging market and credit risk exposure. Risk management tools and how they are applied within financial institutions such as banks, insurance companies, mutual funds, and hedge funds, as well as the corporate enterprise. Topics include the Basel accords, volatility modelling, value-at-risk analysis, extreme value theory, credit default swaps, and portfolio simulation. Farm Bureau Firarcic: Sarva: ii FBL Financial Group, Ine. June 29, 2017 Dean David Spaulding Professor of Finance College of Business Iowa State University Dear Dean Spaulding: Tam writing in support of Iowa State University creating a program for actuarial science. As you know, I spent four years as Commissioner of insurance for the state of Iowa. In that role, I took a keen interest in developing the next generation of insurance professionals. Iowa has a large insurance industry with nearly 90,000 Iowans either ‘working directly in the industry or ina business that works with the industry. We need to develop a workforce for the future to maintain our standing in the insurance industry. I believe Iowa State University is uniquely qualified to offer this program given the strong position the university is in with data and business analytics. The actuary of the future will need to merge his or her skills with data and business analytics. By having the opportunity for your students to work directly in both areas during educational training that is a powerful combination. In addition, your students would have abundant internship opportunities in central lowa, which I believe is another significant advantage over other programs. se. I would be happy to assist in any way I can and look forward to continuing. our work together. Respectfully, Js) Wiek Geant Nick Gerhart shief Administrati Fe 25 = AmericanEnterprise GROUP ING David P. Spalding Raisbeck Endowed Dean Professor of Finance-College of Business Gerdin Business Building 1200 2167 Union Drive Ames, lowa S00L1 June 15, 2017 Re: Proposed Iowa State University Actuarial Science Program Dear Dean Spalding: Tiwant fo take this opportunity to lend my support for an Actuarial Science Program at lowa . Asa former Iowa Insurance Commissioner (2005-2013) and Insurance Division staf member for over 20 years I kaow how important its for the mdustry to have well-qualified staff, especially in the area of actuarial expertise. Both as a regulator and now in my current position, I have relied heavily on the knowledge and advice of actuaries to guide my decisions that affect so many consumers. As we continue to see the insurance industry grow in Iowa, it’s important that we encourage and educate men and women in actuarial science. That is why I am excited to lend my support for the establishment of a program at Iowa State University. Such an additional program in Iowa will ensure that we can attract the best and brightest to lowa to study and, hopefully, to stay and continue to grow this great industry. Thank you for the opportunity to express my support. Sincerely, Susan E. Voss VP/General Counsel American Enterprise Group 515-245-2330 Susan.voss@americanenterprise.com ‘Amarican Fepublk: Ineurance Company Medico Inesrance Comany Rind Hempaske Bt Mints date ee: | Radel tas MERU ue ck See wrenamarleanenterpriee.2om 26 Bruce G. Kelley, CPCU P 515.345.2950 F 515.345.2754 INSURANCE August 28, 2017 Dean David Spaulding Professor of Finance College of Business Towa State University Dear Dean Spaulding: [have spent over thirty years as both a member and a supporter of Iowa's insurance industry. Over that time I’ve developed a deep appreciation for the important role insurance plays not only in our state's economy, but in the role it plays securing the social contract each citizen has with one another, the American Dream. From the businesses to the households that EMC insures, our industry’s unique ability to prevent financial ruin is a key part of the glue that binds civilized society. When I learned of Iowa State University’s intent to create an actuarial science program, I was immediately and enthusiastically supportive. Actuaries play a crucial role in ensuring that insurance carriers succeed in their mission to protect the financial position of individuals and businesses. Whether it is helping to set reasonable insurance rates or helping set aside the appropriate amount of money to cover claims, actuaries are at the heart of every insurance carrier’s success. By training more actuaries here in lowa, we create an environment that supports our children’s’ ability to stay in this great state past their education years and projects our Towa values to other states that may benefit from the program. The program will prepare students for a highly skilled, sought after profession, to meet the industry's demand for analytical talent now and into the future. 1am honored to lend both my own support and EMC's to the success of Iowa State University’s new actuarial science program. Respectfully, tc Brucé Kelley President & CEO 717 Mulberry Street | Des Moines, [A 50309-3872 | P.0. Box 712 | Des Moinas, |A 50306-0712 | www.emeins.com Employers Mutual Casualty Company llinois EMCASCO Insurance Company Union Insurance Company of Providence EMC Underwriters, LLC EMCASCO Insurance Company Dakota Fire Insurance Company Hamilton Mutual Insurance Company EMC National Life Company (affiliate) EMC Reinsurance Company EMC Property & Casually Company EMC Risk Services, LLC 27 IOWA STATE UNIVERSITY Department of Statisties OF SCIENCE AND TECHNOLOGY Snedecor Hall Ames, lowa 50011-1210 Interoffice Communication Phone: (515) 294-3440 Fax: (515) 294-4040 DATE: May 15, 2017 TO: Danny J. Johnson, Associate Dean, College of Business FROM: Max D. Morris, Professor and Chair of Statistics Nop ius SUBJECT: Actuarial Science Program This memo is to formally offer Department of Statistics support for the proposed CoB degree program in Actuarial Science, contingent upon new availability of relevant CoB courses to LAS students. Access to these courses is essential for Statistics majors who wish to participate in the proposed LAS Certificate Program in Actuarial Studies. The combination of the new Actuarial Science program in CoB, and the LAS Certificate program in Actuarial Studies, will create professional opportunities for a wide range of ISU students; we're delighted to support this effort. 30 31 Appendix H: Academic Program Approval Voting Record This document is to be appended as the last page of the proposal for any new or revised academic program to record the successive votes of approval as the proposal moves through its required review and approval steps. Consult Faculty Handbook Section 10.8 or the Faculty Senate Curriculum Committee website for information regarding Committee review and voting requirements for each action. Curricular Action: (check appropriate boxes below) 1. X New Program □ Name Change □ Discontinuation □ Concurrent Degree for: 2. X Undergraduate Major □ Graduate Major □ Undergraduate Minor □ Graduate Minor □ Undergraduate Certificate □ Graduate Certificate □ Other: ___________________ 3. Name of Proposed Change: Major in Actuarial Science (B.S. Degree)_________________ 4. Name of Contact Person: Dr. Rahul Parsa e-mail address: raparsa@iastate.edu 5. Primary College: College of Business Secondary College: 6. Involved Department(s): Primarily the Department of Finance within the College of Business. The Departments of Mathematics and Statistics in the College of Liberal Arts and Sciences will deliver a number of courses for the major. Voting record for this curricular action: Votes Voting Body For Against Abstain Date of Vote Dept. or Program Committee Department of Finance 15 1 1 December 2, 2016 College of Business Curriculum Committee 5 0 0 February 22, 2017 College of Business Faculty Approval Vote 61 3 March 29, 2017 Graduate Council Faculty Senate Curriculum Committee 7 0 0 September 8, 2017 Faculty Senate Academic Affairs Council 8 0 0 October 3, 2017 Faculty Senate [FSCC – November 2013]