University Spotlight—University of New South Wales

By Rachel Min

Special thanks to Professor Michael Sherris, Head of Actuarial Studies, The University of New South Wales, for his contributions in making this feature possible.

Located in Kensington, a suburb in south–eastern Sydney, University of New South Wales (UNSW) is about 7 kilometers away from the Central Business District of Sydney and about 10 minutes away from the beautiful Coogee Beach. The campus itself combines open spaces with buildings, and the atmosphere on campus is vibrant and busy most times of the year. It is also a very multicultural campus with about 40,000 students, including more than 7000 international students from over 130 different countries. As a founding member of the prestigious Group of Eight (GO8) research intensive universities in Australia, a culture of high quality teaching and learning is at the root of UNSW.

Actuarial Science Undergraduate Program at UNSW

The Actuarial Science major program at UNSW is offered through Australian School of Business, a constituent body of UNSW and a leading business school in Australia. Thus, UNSW Actuarial majors have an opportunity to gain a strong background in business by completing double majors or minor options with core courses in business. This connection to the business school also means that the students get to benefit from business contacts and Alumni of the school when looking for career opportunities after graduation.

One of the strengths of the Australian School of Business is that there are many major and minor options to select from. All students doing the Actuarial major must complete another major or a minor in another discipline. Popular options are Finance, Financial Economics, Accounting, and Financial Econometrics. There is also a combined Commerce/Science program where students can complete an Actuarial major in Commerce along with Mathematics/Statistics or Computing in Science. Hence, there is a broad mix of other majors and minors that students can choose to combine with Actuarial studies, which is attractive to both students and potential employers.

In addition to the exposure to studies in business, the UNSW Actuarial Studies program is also accredited by The Institute of Actuaries of Australia (IAA) and is recognized by the Institute and Faculty of Actuaries for exemptions from their examinations. Other Australian universities that are accredited with the IAA for exemptions from professional examinations include University of Melbourne, Australian National University and Macquarie University. In order to gain an exemption from the Part I examinations students need a grade above 65 percent which is usually the average mark in the actuarial courses. About 50 percent of students would gain this grade, although the percentage is higher in the later courses.

Impact of Exemption from IAA Exams on Actuarial Science Program

Exemptions from IAA professional exams mean that the Actuarial Science program at UNSW must be of top quality. To meet the standards of IAA, the IAA has an Accreditation Panel that visits UNSW once every two years to review its course syllabus, staff qualifications and assessment standards as well as a range of other requirements. The exemption from IAA exams has positive impact on the learning experience for the students. Since the professional examinations are important to students, the students are more motivated to do well in the courses. The course lecturers benefit from having such strongly motivated students, and they are in turn motivated to provide a challenging and interesting learning environment. One constraint for teachers is that at least 70 percent of assessment must be for the final exam and this exam must be similar in difficulty to the professional examinations. The other 30 percent of assessment is used to provide applied assignments related to real world problems and to develop other skills such as communication, team and presentation skills.

Co–op Program

The Co–op program at UNSW has quite a different structure from most other Co–op programs. It is structured to be a 4 year scholarship program that incorporates school studies with 15 months of work experience with 3 different sponsor companies. There are over 200 applicants for this program each year and the companies provide scholarships of $15, 000 per annum to the chosen candidates to attract the best and brightest students to the actuarial program at UNSW. Every year there are between 15 and 20 new places in the Actuarial Co–op program, which means that about 20 percent of the UNSW actuarial graduates are Actuarial Co–op Scholars. There are around 15 to 20 companies who regularly participate as sponsors to this Co–op program and these include insurance companies, consulting firms and banks. Current sponsors include Allianz, Australian Prudential Regulation Authority (APRA), Colonial First State Investment Management, Ernst & Young ABC, Finity Consulting, KPMG Actuaries, Macquarie Bank (Macquarie Investment Management), PricewaterhouseCoopers, Russell, Suncorp, Taylor Fry Consulting, Tillinghast–Towers Perrin, Tower Australia, Westpac Bank and Zurich. The Co–op Scholars get to spend three months on industry training at the end of the first year of study and then two six month placements in the third and fourth year of study.

Graduate Program

At UNSW there is a Master of Actuarial Studies, which covers the entire syllabus to Associate membership of the IAA. The Master program also offers an Enterprise Risk Management track and options in Finance, Economics and Mathematical Finance. The program caters to students of many different needs. It is a great program for graduates from Math/Stats and other quantitative undergraduate programs who wish to complete the professional actuarial courses at postgraduate level. Also, students who have completed an Actuarial undergraduate degree can complete further professional courses or complete the quantitative risk management stream along with post graduate options in finance and financial mathematics.

As a founding university member of the Enterprise Risk Management Institute International, the actuarial Masters program at UNSW can well prepare students for the new and emerging area of enterprise risk management (ERM). The Master of Actuarial Studies with the ERM stream was first offered in 2005 and has enrollments of about 25 to 30 students in each of the ERM courses. There are four actuarial courses offered in the ERM stream covering Risk and Capital management, Models for Risk Management, Asset–Liability Management and Risk Management Strategies. A number of leading industry practitioners teach in these courses including Dr. Greg Taylor, as well as Dr. Morton Lane who visits UNSW each year from Chicago for intensive teaching sessions. Graduates from this program have the background and preparation for working in ERM and Risk Management areas in banks, insurance companies and other corporations. Actuaries are increasingly involved with ERM within their organizations and employers are recognizing that the actuarial skills along with this stream of courses provide the ideal skill sets for risk management.

Research

The UNSW actuarial research program is most notable for the research program in insurer capital management as well as ERM, and has won a number of major international prizes. It also focuses on risk management and product design for retirement, longevity and health risks, asset–liability modeling and optimal control in insurance, modeling and pricing of insurance, credit and operational risks, and risk theory and financial economics. Longevity risk in particular has become an area of critical research in recent years. A grant of close to $1.3 million from the Australian Research Council over five years was recently won by a team led by Professor Michael Sherris from UNSW Actuarial Studies. The research project will focus on managing risk with insurance and superannuation, longevity risk modeling, product design and regulation including solvency.

Would you like to see your college or university's actuarial science program featured in The Future Actuary? Contact Kathryn Baker, Senior Communications Associate at the SOA at kbaker@soa.org.

The views and opinions expressed in this article belong to the author and interviewees alone. They do not represent the views or opinions of the Society of Actuaries or its staff, nor do they represent the views and opinions of any entity of, or affiliated with, the Society of Actuaries.