Education Program unlocked: Fellowship Program

About the Chief Examiner for Data Analytics Applications (DAA)

Amanda Aitken has over 20 years of actuarial experience, initially in life insurance before she successfully switched to injury compensation schemes. Amanda and a colleague set up a small boutique consulting firm focusing on general insurance and data analytics. 

Amanda has served on the General Insurance Practice Committee, the Code of Conduct Review Panel, and is currently an active contributor to the Data Analytics Practice Committee (DAPC). She has also led the successful development of the DAA Fellowship subject which was launched in Semester 2, 2021 with 56 students.

What is DAA?

The aim of DAA is to teach students how to apply a range of data analytics skills such as neural networks, unsupervised learning, natural language processing, and optimisation to solve complex and challenging business problems.

As part of the assessments, students learn to:

1. predict share price movements with tweets;

2. perform ‘analytical autopsies’ using neural networks and decision-trees;

3. detect assignment cheating with natural language processing and clustering; and

4. decide who to release from jail using a risk scoring model.

Many students were learning Python for the first time, and comments from the Chief Examiner and Fellows noted how far students advanced in their programming and data analytics skills in only one semester. An Insights session is being planned by DAPC to showcase the impressive work.

What students can expect

This subject is made up of modules and weekly in-depth tutorials that host guests working in data analytics, and discussion forums to share further questions and insights.

The sample business problems presented in this subject are drawn from a wide range of industries, to help students broaden their thinking about future career opportunities as an actuary.

The subject consists of one assignment and one exam. Feedback from the 14 Fellows and Chief Examiner is that the top students were able to:

• demonstrate a sound understanding of the subject materials;

• have excellent structure and clarity in their writing, coding, and presentations;

• show strong links between their answers and the given context;

• provide good explanations of each modelling step being undertaken and why it was being performed; and

• include a range of detailed and holistic checks on each step in their analysis.

Overall, 77% of DAA students passed this semester due to their preparation and participation in tutorials, discussion forums, and investing sound time into their assignments and examination preparation.

Comments from students

• “The assignment was a great way to use the skills learned in the subject.”

• “It was really awesome to implement natural language processing from end to end in the assignment.”

• “The subject was very well structured.”

• “The subject was extremely practical and gave a lot of opportunities to learn about industries and products outside insurance.”

• “I really enjoyed learning how to code in Python.”

P.S. If you are already qualified and want to expand your career potential, then we have some exciting news! The Institute will be launching a CPD version of DAA in 2022. It is likely that the first part will involve helping Fellows understand the Python language before joining Amanda’s subject in 2023. If you would like to register your interest, then please forward your name, and contact details to michelle.gavri@actuaries.asn.au and we will be in touch with you in the new year.

About the Chief Examiners for General Insurance and Health Pricing and Portfolio (GIHPPA)

This subject is managed by two Chief Examiners:

Richard Mayo has over 30 years’ experience in reinsurance and insurance, as an insurer and consultant. He has worked as a portfolio manager, Appointed Actuary, and recently led the consumer valuation team at IAG. As a member of the Institute’s Education team, he has been involved in writing and delivering the subject work for the General Insurance and Health Valuation, Pricing and Portfolio Management and Applications subjects.

Elaine Pang has over 15 years of experience in insurance and finance, having accumulated experience in reserving, financial reporting, developing pricing tools, pricing multinational insurance programs, administering a group reinsurance program and implementing compliance monitoring mechanisms as part of the underwriting process in Australia and Hong Kong.

What is GIHPPA?

GIHPPA is the second part of the new Fellowship course in general insurance. In this subject, students learn how to complete the technical aspects of pricing and portfolio analytics and understand the various conflicts that arise across different groups of stakeholders. At the end of this subject, students are equipped to:

• select and implement appropriate pricing techniques;

• understand the main general insurance products and the main reinsurance products; and

• understand and be able to work with and support the various stakeholders such as product managers and underwriters involved in managing a general insurance portfolio.

What students can expect

This subject is made up of weekly tutorials, substantial written resources, and an active discussion forum. The tutorials go through real life examples and exercises, with students encouraged to ask questions and answers along the way.

It consists of one assignment and a three-hour exam. Students are required to apply their knowledge to a specific context and communicate their reasoning in a clear and considered way. The assignment focuses on aspects such as complex Excel modelling, which are not effectively tested by an exam.

50% of students passed this subject, and those who receive a strong result have shown that they can:

• present an objective assessment of the information provided;

• propose ways that would achieve the stated objectives and were clear about the advantages and disadvantages of each;

• carry out technical work correctly; and

• articulate details of the process they would adopt to solve a specific problem.

About the Chief Examiner for Investment

James Purvis qualified in 1976 and has held actuarial, investment and management roles in Sydney, Melbourne, London, Brussels, and New York. He has served as Chief Executive of four investment management firms, and of two life insurance companies. He has also served as the Chief Investment Officer of a firm specialising in investment and financial advice for high-net-worth clients.

His work in investment management covered managing portfolios of fixed interest, listed equities and commercial real estate as well as multi-asset class portfolios where the asset class portfolios were managed by selected investment managers. The advisory work has included advising major superannuation funds on asset allocation as well as assessing and rating fund managers.

What is the Investment subject?

The Investment subject aims to provide students with an understanding of the principles and practices relevant to investment management, advice, and consulting in a range of commercial and business environments.

After successfully completing this subject, students can:

• evaluate investors’ needs and design an appropriate set of investment objectives for an investment portfolio;

• explain the main principles and methods of investment portfolio management, evaluate the relative merits of different methods, and understand how they can be applied in practice;

• explain the methods used to assess the performance of investment portfolios; and

• review and critique the methods used for the selection of investment managers.

What students can expect

This subject is made up of a series of tutorials that are presented in modules and use a problem-based learning approach. The modules provide students with the knowledge and understanding of investment theory and practice required to fulfil roles ranging from investment analyst, and portfolio manager, to investment consultant.

Case studies and examples are drawn from areas of investment practice to illustrate and establish the underlying principles. Students are asked to address practical questions related to various scenarios e.g. considering the risks in acquiring a commercial property, and what they would propose doing to mitigate those risks. 

Comments from students

“Case studies – good selection of investment topics – modules nicely set out and easy to understand/read – James sharing his insights/knowledge from his in-depth industry experience.”

About the Chief Examiner for Life Insurance Applications (LIA) and Life Insurance & Retirement Product Development (LI&RPD)

Georgina Hemmings is the Chief Examiner for both subjects and has over 20 years’ experience in financial services across Australia and the UK, in corporate and Big4 consulting roles. Georgina has volunteered for many years in the Life Insurance Education Faculty and wrote subject materials and exams for Life 2A. She joined the Institute in 2019 and states:

“I am fortunate to have experience with both the old and new education programs. It means I can help to bring across many of the good bits of the old system while really understanding the drivers for change in the new system.”

What are the LIA and LI&RPD subjects?

The aim of the LIA subject is to provide students with an understanding of how a life insurance company operates in Australia and the legal, regulatory and professional framework that governs the industry.

After successful completion of this subject, students will be able to:

• describe the commercial, legislative, regulatory, prudential and professional environments that apply to Australian life insurers; and

• understand the interactions among product management, valuations, risk management and business planning for business sold by life insurers operating in Australia;

The aim of the LI&RPD subject is to promote the concept of the actuary as an expert advisor in the product development process, covering both technical aspects and managing various conflicts that arise across different groups of stakeholders.

After successfully completing this subject, students will be able to:

• consider whether reasonable customer expectations have been, or will be, met;

• critically evaluate the need for actuarial advice in the product development process;

• construct a profit test and explain the results;

• conduct experience reviews; and

• contribute to the management of financial risks.

The aim of the Life Insurance Applications subject is to provide students with an understanding of how a life insurance company operates in Australia and the legal, regulatory and professional framework that governs the industry.

After successful completion of this subject, students will be able to:

• describe the commercial, legislative, regulatory, prudential and professional environments that apply to Australian life insurers; and

• understand the interactions among product management, valuations, risk management and business planning for business sold by life insurers operating in Australia;

What students should expect

As an actuary with experience writing exam questions for the old and new Fellowship subjects, it is important to me that our assessments are fair. This is aligned with our core principle that a well-prepared student can pass the subject.

This begs the question “What is fair?”. For me, fair means that there is alignment between the:

• syllabus or learning objectives which I refer to as the ‘scope’ of the subject;

• subject materials which include the modules; tutorial content; core readings; case studies or examples; and videos, known as the ‘examinable’ materials; and

• the exam questions.

This means that we examine students on what we teach them in the subject. The scope of their study is defined and students can be confident that if they focus on studying the examinable material they will be rewarded in the exam.

I’m able to achieve this because there is continuity between the development of the subject materials, teaching and the assessments.

It also gives me an advantage when writing exam questions because I can rely on knowledge that I know students have access to in order to test them on their ability to apply their knowledge to a new situation.

In Semester 1, 2021 we introduced guest speakers to our tutorial program for LIA and Life Insurance & Retirement Valuations. This is in addition to running weekly tutorials covering each module and worked examples. We received very positive feedback from students about this approach and so have continued to supplement our tutorial program this semester.

For LIA, we ran guest speaker tutorials with Hoa Bui who discussed the workings of the Actuaries Institute’s Disability Insurance Taskforce and Anthony Brien who shared insights about APRA, the Life Act and product rationalisation.

For LI&RPD, Bruce Thomson talked to students about unit pricing and Mike Callan shared his experience working with participating businesses.

We are extremely grateful to our guest speakers who give up their time to help students.

LIA

A total of 31 students presented sat the LIA exam in Semester 2 2021. The pass rate for the subject was 65%.

This pass rate is somewhat higher than the last two sittings. However, when we look at the pass rate for first attempts versus re-sits, it tells an interesting story. The pass rate for first attempts was 50% versus 80% for re-sits. This is encouraging for students who may be unsuccessful on their first attempt. 

Some examples of what differentiated the ‘highest’ fails from the ‘lowest’ passes include

• application of the Life Act, such as definitions of ordinary and superannuation; requirements for statutory funds; and constrains placed on migration of legacy products;

• implications for profit for different product lines of current issues, trends or recent changes in the Australian life insurance sector;

• lack of awareness or understanding of the definition of total disability in the Disability Insurance Taskforce’s reference product; and

• listing rather than applying knowledge to the context provided so that a piece of actuarial advice was meaningful for the intended audience.

LI&RPD

The pass rate for LI&RPD was 79% for Semester 2 2021. The is a very successful outcome for students.

What differentiated students who passed and failed was whether their answers were generic or specific. In particularly, common issues for unsuccessful students were the lack of application of subject materials such as:

• how an experience analysis is used in assumption setting, performance management and monitoring, and business decision making;

• how the equity principle applies to unit pricing; and

• ways to manage the risk of a tontine effect for closed books of participating businesses.

Comments from students

“The detail in the course notes, which makes it relevant when referring back to it later on during work. Will use it as a reference material for technical aspects of PD and pricing.”

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