A Bachelor of Science in Actuarial Science prepares students for actuarial careers, whether they plan to work for financial institutions, insurance companies or government organizations. Actuaries frequently work in high-level positions or as consultants, so great emphasis is put on communication and writing skills as well as breadth of knowledge. In addition to courses that help students prepare for the business elements of an actuarial career, the requirements for such a degree include many key prerequisite classes in actuarial science, economics, mathematics and statistics, and computer science.
Knowledge of calculus is an integral part of actuarial science because it is applied in many other courses and exams. Many bachelor’s degree programs break the study into three classes. Students learn about elementary analytic geometry, antiderivatives, continuity, definite integrals, derivatives, functions and limits in the first course. The second class introduces cylindrical and spherical coordinates, elementary transcendental functions, integration techniques and applications, parametric equations, and series, sequences and power series with applications. In the final course, students study line and surface integrals, multiple integration, several variables of calculus functions, solid analytic geometry and vectors.
Probability, Statistics or Both
Probability and statistics are also core elements of actuarial science studies and careers. Sometimes these courses are introduced together; other times they are broken into multiple classes. A course that introduces probability and statistics may teach the theory and applications of probability as well as counting techniques, mathematical expectation, moment generating functions, normal distributions, random variables and distributions, and sample spaces. A probability class might only cover addition and multiplication rules; combinatorial and conditional probability; events, expectations and moments; set and moment generating functions; and continuous, discrete and multivariate distributions. A statistics course could use elements of probability to teach students to develop, interpret and use models from real-world occurrences to understand how they happened and to learn how to solve problems.
While some B.S. in Actuarial Science degrees have just one course that covers actuarial methods, others split the course into two parts. Actuarial methods helps students develop their knowledge of the hypothetical basis of specific actuarial models and apply those models to financial risks such as insurance. This coursework is essential to completing the actuarial science degree and prepares students for the Models for Financial Economics exam with the Society of Actuaries, which is the third of five examinations. The MFE exam requires knowledge of calculus, interest theory, probability and risk management.
Fundamentals of Computer Science
An introductory course to computer science is integral to actuarial science because it teaches methods of solving computational problems through the study and practice of algorithm design and programming. Some of the main topics include control-flow statements, data types, data structures, exception handling, expressions, flowcharting, functions, recursion, variables, and documenting numerical and non-numerical problems. Other aspects of the syllabus include an introduction to computer science concepts such as computer applications, hardware and terminology. Computer science also helps students build skills such as understanding the memory usage and time efficiency of programs and understanding incomplete or imprecise problem descriptions.
Principles of Microeconomics
Aspiring actuaries need be able to analyze the economy to create reports and give sound recommendations to their employers. In a class for fundamentals or principles of microeconomics, they gain a basic understanding of the economy at the company, consumer and market levels. The course may use algebra and geometry to introduce these concepts. Students also analyze how the economy works using simple economic models and learn about costs, the effects of government intervention, market efficiency, game theory, the importance of free trade, trade gains and how the market responds to negative events.
Actuaries help businesses and organizations gather and analyze data to estimate the risk and potential costs of certain events such as death, disability, injury, loss of property and sickness. About 60 percent of actuaries work for insurance companies, and along with being one of the highest-paying professions, it is a secure job even through economic downturns.