The Future Actuary - Society of Actuaries

31 Pages·2012·0.16 MB·English

2011 Fall Issue

Advice for Writing FSA-Level Exams
Advice for Writing FSA- By Shirley Song
Level Exams
Mike Carmody of Just Actuarial Materials (JAM) and Eddy Chan of PAK share tips for
prepping for FSA level exams.
How I Passed My Final
Full article >>
SOA Exam
In Canada: To Write or
How I Passed My Final SOA Exam
Not To Write
Study Tips for Conquering FSA-Level Exams
Actuaries Advancing By Michael McDermid
Beyond: Daniel Rachlis,
Recent FSA, Michael McDermid, gives the candidates perspective on to passing FSA
Deloitte Consulting LLP
exams. See what tricks he picked up along the way.
Full article >>
So ... You Want to
Change Careers and
Be an Actuary? Really? In Canada: To Write or Not To Write
Really?!
By Claire Bilodeau
The Fresh New Face of Clair Bilodeau discusses the Canadian Institute of Actuaries' plans to offer candidates
BeAnActuary.org! an alternate route to fellowship in the CIA.
Full article >>
The Society of
Actuaries Candidate
Actuaries Advancing Beyond: Daniel Rachlis, Deloitte
Community is on
Consulting LLP
Facebook!
By Wei Zou Ang
CAS/SOA Education Daniel Rachlis has an affinity for data, but don't write him off as a "number cruncher."
Update Using his actuarial and communications skills, he worked his way up from a back
room actuary to a specialist master with Deloitte Consulting.
Actuarial Foundation
Full article >>
Update
So ... You Want to Change Careers and Be an Actuary?
Really? Really?!
By Jason Bribitzer-Stull
Making a career shift into the actuarial field isn't easy, but it isn't impossible. Jason
Bribitzer-Stull shares his experience as a non-traditional actuarial candidate.
Full article >>
The Fresh New Face of BeAnActuary.org!
We are pleased to announce the launch of the new BeAnActuary.org website! The
new site has a clean and modern design, improved navigation, interactive features
and links to the new BeAnActuary social media pages. Check it out!
Full article >>
The Society of Actuaries Candidate Community is on
Facebook!
You asked, we listened and now you can "like"! Come join our over 2,000 followers at
the new SOA Candidate Community on Facebook.
Full article >>
CAS/SOA Education Update
A new version of FAP is coming your way in January and a Guide to SOA Written
Exams is available now.
Full article >>
Actuarial Foundation Update
Learn about new volunteer opportunities with the Actuarial Foundation and how to
double your donation.
Full article >>
2011 Fall Issue

Advice for Writing FSA-Level Exams
Advice for Writing FSA- By Shirley Song
Level Exams
Interviewer:
Shirley Song, Consultant, Milliman Inc.
How I Passed My Final
I am honored to interview Mike Carmody of Just Actuarial Materials (JAM) and Eddy
SOA Exam
Chan of PAK. Their input is extremely helpful, and I hope candidates can best
In Canada: To Write or reference to their advice when preparing for a FSA-level exam. Good luck!
Not To Write
Interviewees:
Actuaries Advancing Mike Carmody, FSA, MAAA, founder and author of Just Actuarial Materials (JAM).
Beyond: Daniel Rachlis, Eddy Chan, FSA, MAAA, CERA, founder and author of PAK Study Manual.
Deloitte Consulting LLP
Q: Unlike SOA preliminary exams where questions are in the form of
So ... You Want to multiple choice, candidates are exposed to written-answer format
Change Careers and questions for the FSA-level exams. What is your advice in answering
Be an Actuary? Really? both analysis-type and numerical questions?
Really?!
Mike Carmody:
The Fresh New Face of
Answer the question: Too many candidates write about the topic of the
BeAnActuary.org!
question without actually answering the question. Make sure you carefully
The Society of read the question and structure your answer accordingly.
Actuaries Candidate Be thorough: Don't leave out items just because you think they are obvious.
Community is on The grader assumes you only know what you write. If you are not certain a
Facebook! specific comment applies, go ahead and include it. You have nothing to lose.
If it is applicable, you will get credit. If it is not, you will not lose any points. A
CAS/SOA Education shotgun approach is more appropriate than a rifle approach on these exams.
Update Show all work: Many students think the graders just want an answer for the
numerical question. We are more interested in the process. Also, it is very
Actuarial Foundation
likely the student will make a mistake because some of the problems are
Update
challenging and you are forced to rush due to time constraints. If you assume
you will get something wrong, then your goal should be to make it easy for
the grader to find your error. The grading process is all about partial credit.
Eddy Chan:
Analysis-type questions: read the questions carefully. Often times, the exam
includes two or three sub-questions in one question. For instance, they may
ask: "Describe the XYZ reserve method and compare its pros and cons."
Many candidates then answer the first sub-question (describe the XYZ
reserve method) and move on to the next question without answering the
second sub-question. This is a very common mistake. I highly suggest that
you re-read the question right after finishing answering it. Doing so can help
you identify whether you have missed any sub-questions.
Numerical questions: The calculation questions in FSA exams are very
difficult, especially under the time pressure. It is very common that candidates
do not know how to answer them completely. Many just skip the entire
question and move on to the next one. This is NOT the right approach. Yes, it
can save you some time but you will miss many partial credits. The best way
to approach it is to try your best to answer the question (within the time limit).
Q: What suggestions do you have when practicing past exam
questions? (i.e., should candidates time the exam? etc.)
Mike Carmody:
Unlike the preliminary exams, it is not that useful to spend a lot of time taking practice
tests. The questions will most likely not be repeated on future exams. However, it is
useful to study past exams to better understand the style of questions. You can also
practice answering questions within the time limits.
It is important you read all the applicable prior exam questions so you better
understand how the SOA likes to test parts of the syllabus. You should not just study
the material. Rather, you should study the material with an eye on the exam.
Eddy Chan:
Many candidates have a misunderstanding that they should study the past exam
questions two weeks before the FSA exam so they can test their knowledge and
identify their weak areas. I do not agree with this approach. I highly suggest you read
the corresponding past exam questions right after going over each study note for the
first time. By doing so, you can better understand the materials, identify what you have
missed, and have enough time to re-read the materials if necessary.
When reading the past exam question, you should treat it as a real exam:
write down the answers on a piece of paper and time the exam. See if you
follow the "3-minutes-per-1-exam-point" rule suggested by the SOA. I
suggest repeating this process a couple times so that you can get a better
feeling on how to manage time in the exam.
Review the solution: see what answers you have missed, and try to
understand why your answers are not fully correct and know how to improve
your answers.
Read the question and ask yourself: what will happen if the variables are
changed here? What are the impacts? How to answer it? For instance, if you
have used a mortality rate of 0.0010 to calculate the reserve, then what will
happen if the mortality rate is changed to 0.0012 or 0.0008? What if other
reserve calculation methods are used? What are the potential impacts? This
last step can help you better understand the materials.
Q: Could you provide candidates any general time management tips?
How far in advance should candidates start studying for an FSA-level
exam, and how many hours of studying are expected?
Mike Carmody:
It takes about four months to adequately prepare for these exams. In total you
will spend about 400 hours, but it will not likely be evenly distributed. You will
spend much more time in the last month.
Make a detailed study plan. Outline what you intend to accomplish each day.
This should reduce your anxiety about being prepared.
Eddy Chan:
I also suggest start studying four months before the exam. Since the FSA exam dates
are usually set right after the quarter-end reporting cycle, many candidates do not
have enough time to study during the last month. Therefore, it is better to start
studying early.
The first 2.5 months are used to read the whole syllabus entirely. During these 2.5
months, you should focus on understanding the materials individually. The last 1.5
months are used to practice past exam questions and re-read the materials. This
time, you should understand the big picture, how each reading is related, and how to
link the concepts learnt to the objectives.
Different people have various ways to study the FSA exam. Some study three hours
per weekday and six hours during the weekend; others study 20 pages per weekday
and 40 pages per weekend. I think both works. However, I would like to remind
candidates one key point: once you define the schedule, you should follow it closely;
otherwise, you will not have enough time to finish all the materials scheduled.
Q: A typical FSA exam formula sheet is composed of at least 30+
pages, what's the best way to study the formula sheet so candidates
can well-utilize the material during the exam?
Mike Carmody:
Definitely familiarize yourself with the formula sheet so you can quickly find
the ones you need during the exam.
Use the formula sheet when practicing numerical problems.
Eddy Chan:
I agree with Mike. If time is allowed, I also suggest that you look at each formula
carefully, try to explain how it can be used, and what each variable means. This helps
you refresh your memory.
Q: The last two weeks of studying is a crucial part in the long
process of preparing for FSA-level exams. How can candidates best
utilize the last few days right before their exams?
Mike Carmody:
You should stop trying to learn new things about one week before the exam.
Rather, you should focus your time on solidifying what you already
understand.
Continue to review the summary outlines and memorize key lists.
Work practice numerical problems to stay sharp.
Get plenty of rest, exercise, and nutrition. You need to be physically healthy
on the exam day.
Just relax the night before the exam. Cramming is probably detrimental at that
point.
Eddy Chan:
The last two weeks are very crucial. If you utilize the time efficiently, you can
significantly increase your chance of passing. First, I suggest that you schedule most
of your study time in this full two-week period. Then, create an hourly schedule for
two weeks. For instance, how many hours are allocated to review the materials, to
practice past exams, and to read the case study/formula sheet each day. Based on
my experience, many candidates feel nervous about the exam and start panicking on
how many materials they still do not understand. Many times, they get lost and do not
spend their time efficiently on studying. Make sure you define the schedule
beforehand and follow it.
Q: How should candidates approach a question during an FSA exam?
How can candidates get the maximum possible points for any given
question (especially when they do not have a well-defined approach
to the question)?
Mike Carmody:
Slow down and really read the question. Don't try to rush through the reading
just so you can start answering.
Use an outline format when answering the question. Make sure you focus on
the main points first and then fill in the details.
Write as much as you can in the allotted time.
Eddy Chan:
Let's consider two cases: 1) candidates know the question and 2) they do not know
the question.
In the first case, you should answer as much as possible within the SOA-suggested
time limit (3-minutes-per-1-exam-point). Once you finish, re-read the question. Often
times, candidates know the answer but write down the wrong/incomplete one due to
time pressure.
In the second case, you should read the content of the question carefully. Most of the
time, there are some hints embedded in the content. In the worst case scenario, if you
cannot find anything, you should write down something related in order to score some
partial credits.
Q: How do candidates best manage time during an FSA-level exam?
Mike Carmody:
You should definitely wear a watch to the exam. You must monitor your time
closely.
You have three hours for 60 points in the morning and afternoon sessions.
That breaks down to three minutes per point.
When you start a question, write down the time you must be done. For
example, if you start a five-point question at 8:17, then write down 8:32 at the
top of the page. This will keep you on track.
Be willing to move on even if you are not done. You can't afford to spend too
much time on any given question.
Ask yourself if you want to pass the question or the exam.
Eddy Chan:
There is a 15-minute read-though time before each 3-hour exam session. During
these 15 minutes, you can only read the questions, the case study, and the formula
sheet (if any), but you cannot write down anything on the answer sheet.
I suggest that you read through all the questions and understand what each question
is about. If time is allowed, you should search for the case-study/formula-sheet
related information so that you can answer the questions quickly.
Once the 15-minute read-through time is gone, you should start with the question that
they know the best. This helps building up confidence, managing time, and securing
most of the exam points.
The SOA suggests that you follow the 3-minutes-per-1-exam-point rule. That means
for 1 exam point question, you should spend 3 minutes on that question. It sounds
easy but actually it is difficult and requires a lot of practice. Many candidates do not
practice this before exam. If you have taken FSA exams before, you know that 3-
minute-per-1-exam-point rule is only doable if you are very familiar with the materials.
Many candidates have experienced the case that they have left 15-20 exam points
totally blank due to insufficient time.
In the last 10 minutes, you should see which questions you still have not answered.
Then, you should try your best to answer as much as you can.
Shirley Song works in financial risk management at Milliman in Chicago, Ill.
2011 Fall Issue

How I Passed My Final SOA Exam
Advice for Writing FSA- Study Tips for Conquering FSA-Level Exams
Level Exams
By Michael McDermid
How I Passed My Final
Editor's Note: This article originally appeared in the May 2011 issue of Actuary of the
SOA Exam
Future. It has been reprinted here with permission.
In Canada: To Write or
They say that by the time you figure out how to pass the fellowship-level exams,
Not To Write
you're done. And how true that is! In this article, I am going to share a few exam
Actuaries Advancing tricks that I've picked up along the way with the hopes that they can help other
Beyond: Daniel Rachlis, actuaries prepare for the daunting journey to fellowship. And, with the need to
Deloitte Consulting LLP constantly learn new concepts over your career (thank you CPD!), hopefully some of
these tips will be useful for actuaries even after obtaining their FSA.
So ... You Want to
Change Careers and Overview
Be an Actuary? Really? Like most actuaries, I was pretty good at math in high school and university. I was
Really?! also quite successful with the preliminary actuarial exams, even though I found them
challenging. But when I started in on the fellowship-level exams, something happened
The Fresh New Face of
... they were a lot harder to pass!
BeAnActuary.org!
I've had the pleasure of working with some fantastic actuaries who have collectively
The Society of
given me some great advice on what I needed to do to pass the exams. Below is a
Actuaries Candidate
list of tips that I have accumulated from other actuaries, students, and through my
Community is on
own trial and error.
Facebook!
It's the Thought that Counts (Convince Yourself You Will Pass)
CAS/SOA Education
With the sheer volume of material, and pass percentages set where the majority fail,
Update
inevitably you will have moments where you want to throw in the towel. When those
moments come, my advice is to take a few minutes and remind yourself of all the
Actuarial Foundation
hard work you have done and will continue to do. You have to be confident that you
Update
will pass the exam.
Remind yourself that everyone else had to go through the same syllabus as you and
that you are putting in the effort to pass. Reflect back to the feelings you had upon
passing the preliminary exams and think about how great it will feel when you pass
the fellowship-level ones.
Committing months of your time to studying is not fun. Everyone has family/work
commitments. And while it may feel like the days are flying by in the blink of an eye,
these exams can be passed. In a recent presentation to a group of university
students, a fellow AoF council member stressed the dedication required to pass these
exams. There is no substitute for hard work, a positive attitude and a commitment to
passing the exam.
Not Now, But Right Now! (Start Early)
People always ask how many hours they should put in to pass. While I've heard the
rules of thumb (100 hours per hour of exam, three times as many home study hours
as work study hours), I think the amount of time required is entirely a personal
decision. I like to tell people you need to put in as many hours as it takes to pass the
exams. (An extremely useful comment, I know!) Everyone is different, and every exam
is different. You need to put in enough time to know the material cold come exam day.
The best advice, though, is to start early. You've probably heard this point before, but
it really can't be overstated. You must start early.
I was once told by a former boss that in order to finish on time, you have to start on
time. So, when determining when to start, work backwards. How many passes
through the material do you want to do? (two, three, more?) How long will each pass
take? How much time do you want to have at the end to dedicate to old exams?
What about memorizing flashcards? And don't forget about family/ work commitments.
(You've got to hate it when life gets in the way.) Figure out what you want to put in,
and work backwards from the exam date.
It's also good to factor in a few breaks in your study schedule. Another former boss
indicated that she knew she needed a week away from the books with about two
months left to let herself recharge for the final push; otherwise, she would be burnt
out come exam day. So, she factored this into her study schedule. Knowing what
works best for you (and being honest with yourself) is critical when setting up your
study schedule.
To Read or Not to Read, That is the Question (Passes Through the
Material)
When it comes to the 2,500-ish pages of source material, a lot of people question
whether they should read it all or not. My advice is, assuming you have read the
above and started early, to quickly read the source material for your first pass. Don't
try to memorize it or even understand it all, just give it a quick skim to get a sense of
what's on the syllabus (and try not to get too depressed!). Another tip I have on the
first pass is to identify where all the examples in the source material are located.
When setting questions for an exam, what would be more appropriate (or easier) than
taking an example from the book and changing a few numbers? Even though I've
questioned it a few times, question writers are human too.
In recent years, technology (and entrepreneurial actuaries) has made it possible to
have online seminars. Online seminars condense the entire syllabus into 40 or so