Penn State Behrend Actuarial Science

Actuarial Science at Penn State Erie, the Behrend College

Penn State Erie, The Behrend College does not have an official actuarial science program. We have, however, had tremendous success preparing students for a career as an actuary by advising students to major in mathematics combined with appropriate options and minors. Penn State Behrend students who have completed the program described below have found internships or employment with such companies as Erie Insurance, Aetna, Prudential, and Watson Wyatt Worldwide.

What is an Actuary?

(From "What is an Actuary?" at www.beanacturay.org.)

The future is uncertain. Some of the events that can happen are undesirable. "Risk" is the possibility that an undesirable event will occur. Actuaries are experts in:

Evaluating the likelihood of future events
Designing creative ways to reduce the likelihood of undesirable events
Decreasing the impact of undesirable events that do occur.

The impact of undesirable events can be both emotional and financial. Reducing the likelihood of these events helps relieve emotional pain. But some events, such as death, cannot be totally avoided. So, reducing their financial impact is very important. Actuaries are the leading professionals in finding ways to manage risk. It takes a combination of strong analytical skills, business knowledge and understanding of human behavior to design and manage programs that control risk. Average annual starting salaries for actuaries with bachelor's degrees were $53,754 in 2007, according to the National Association of Colleges and Employers.

Recommended Courses at Penn State Behrend

In order to prepare our students for a career as an actuary, we recommend that students pursue the mathematics major with the business option. In order to be prepared for the P/1 actuarial exam and to be competitive in the job market, we also recommend that the students pursue the statistics minor.

In order to find employment as an actuary, most employers are looking for students who have passed one of the first two actuarial exams. The actuarial exams are a series of exams prescribed by the Casualty Actuarial Society (CAS) or the Society of Actuaries (SOA). Exam P/1, which covers probability (and has a pass rate of 30-40%), is typically the first exam taken. Exam FM/2 covers financial mathematics and usually is taken after exam 1/P has been passed.

Exam P/1 (Probability) Preparation

In order to prepare students for the P/1 exam, we recommend the following sequence of courses. All of these courses are required for the statistics minor. Prerequisites for the courses are not listed below, but the links to the Penn State blue book provide more detailed course descriptions and prerequisites.

MATH 230 Calculus and Vector Analysis (the third calculus course)
STAT 301 Statistical Analysis I (Behrend's first course in probability)
STAT 414 Introduction to Probability Theory (Behrend's second course in probability, usually offered in the fall of odd years)

We recommend that students take the P/1 exam as soon as possible after completing STAT 414, regardless of class standing.

Exam FM/2 (Financial Mathematics) Preparation

Students prepare for the FM/2 exam by obtaining a strong background in a variety of mathematics (the mathematics major) combined with a knowledge of finance (the business option). Unlike the P/1 exam, we do not have a recommended series of courses. The Casualty Actuarial Society (CAS) has a list of suggested texts (pdf) that cover the FM/2 exam. The John M. Lilley Library at Penn State Behrend has a number of these texts available.

Job Preparation

Based on the experiences of former Penn State Behrend students who have pursued careers as actuaries, the following courses are recommended in order for students to be competitive in the job market. All of these courses can be used to fulfill requirements for the mathematics major or statistics minor.

STAT 461 Analysis of Variance
STAT 462 Applied Regression Analysis
ECON 481 Business Forecasting Techniques
ECON 485 Econometrics

Internship Opportunities

In addition to coursework, students can prepare for a career in actuarial science by participating in summer internships. The main source for internship information is the Penn State Behrend Career Development Center. They will have information on all the internships available to all Penn State University students. An important on-line resource is Nittany Lion Recruiting. Additional information can also be obtained by contacting Dr. Michael Rutter in the mathematics department.

VEE - Validation by Educational Experience

As one pursues a career as an actuary, additional exams must be passed and competency areas tested. It is possible, based on classes passed in college, to be validated in some topics (validation by educational experience, or VEE). Some courses at Penn State Behrend have been approved as VEE courses. Please visit this page for more information, as the list of courses is continuoully updated.

Further Information

If you would like more information about actuarial science at Penn State Behrend, please contact Dr. Michael Rutter, Assistant Professor of Statistics, Penn State Behrend.