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Actuarial Science

This is an archived copy of the 2021-2022 catalog. To access the most recent version of the catalog, please visit http://catalog.iastate.edu.

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Actuaries have a deep understanding of finance, business, mathematics, and statistics. With this knowledge, they help businesses measure and manage risk, develop new products, and make strategic value-enhancing decisions. In high demand, actuaries work for and with businesses engaged in many different types of activities, including life-, health-, and property-casualty insurance, banking, investments, financial services, government, energy, e-commerce, marketing, and consulting.

Students studying actuarial science will acquire the knowledge base and skills in finance, mathematics, and statistics needed to pass the preliminary actuarial exams offered by the Society of Actuaries and Casualty Society of America, while acquiring essential business skills to be successful in the field.

Undergraduate Major:

The Department of Finance in the Ivy College of Business offers a major in actuarial science.  Students will complete the business general education requirements (including business foundation courses), supporting courses/major prerequisites, business core requirements for the bachelor of science (B.S.) degree, and 29 additional credits in the major.

The actuarial science major, intended for students with strong quantitative backgrounds and interest in business, has the goal of educating students in business and risk management, while providing the background and training needed for certification as an actuary (via the 5 preliminary exams of the profession). The major is an excellent opportunity for individuals who want to use advanced technical and analytical skills to solve important business problems.

Certificate:

The certificate in actuarial science is available from the College of Liberal Arts and Sciences for non-actuarial science majors at Iowa State. The certificate requires 23 credits from a designated list of courses, of which 9 credits must stand-alone. There are 9 prerequisite courses required for the certificate's required courses.

The certificate in actuarial science is intended for students studying mathematics, statistics, or other STEM disciplines at Iowa State (or who hold a baccalaureate degree from an accredited institution) who wish to prepare for a career in the field while obtaining the advanced technical and analytical skills in their chosen major. Students completing the certificate will have sufficient background to pass the first 4 preliminary exams of the profession, along with applying actuarial mathematics to problems in finance, investments, and risk analysis for a broad range of businesses and consumers.

Undergraduate Major in Actuarial Science

For undergraduate curriculum in business, major in actuarial science.

The Department of Finance offers a major in actuarial science.  Students will complete the general education requirements (including business foundation courses), supporting courses/major prerequisites, business core requirements for the bachelor of science (B.S.) degree, and 29 additional credits in the major.

Actuaries measure and manage risk and work for and with businesses with a financial focus, such as finance and insurance. The actuarial science program provides a background in probability, statistics, finance, and actuarial mathematics to enable students to pass the 5 preliminary exams offered by the Society of Actuaries and Casualty Society of America.  After completion of this program, students will acquire the business-related skills needed to be a successful actuary. These include the ability to: understand how a business is organized and functions; communicate effectively in written, oral, visual, and electronic modes; work in teams; make ethical choices; use quantitative and analytical methods to address unstructured business problems; think critically; understand financial statements; and understand markets and investments.

Areas of study in the field of actuarial science include interest theory, theory of probability, financial futures and options, loss models, credibility theory, and mathematics of life contingencies. 

The instructional objective of the Actuarial Science program is to provide a well-rounded professional business education in actuarial science. Such a program will provide the student with:

  1. a mastery of actuarial concepts and methods of analysis
  2. a basic understanding of insurance operations in a global setting and of the role of financial institutions in the economy
  3. an ability to effectively communicate and work with others as an actuary
  4. an ability to demonstrate leadership capabilities in actuarial, financial analysis, and portfolio management.

Students are limited to three business majors/degrees within the Ivy College of Business, or a total of three business majors/minors within the college.  This limit is on business majors/degrees/minors only, and does not apply to multiple majors/degrees/minors taken outside the Ivy College of Business.

For more information on the undergraduate major in Actuarial Science, please visit: https://ivybusiness.iastate.edu/undergraduate/majors-minors/actuarial-science/

Curriculum:

While the General Education Requirements for Actuarial Science majors remains the same as all other Business majors, there are specific changes in the following areas that must be completed in order to receive a Bachelor's degree in Actuarial Science:

Pre-Professional Program – Foundation: (21)

BUSAD 102Business Learning Team Orientation1
or BUSAD 103 Orientation
BUSAD 203Professional Development in Business1
COM S 113Introduction to Spreadsheets and Databases3
MATH 165Calculus I4
ECON 101Principles of Microeconomics3
ECON 102Principles of Macroeconomics3
STAT 226Introduction to Business Statistics I3
ACCT 284Financial Accounting3

Supporting Courses: (23)

ACCT 215Legal Environment of Business3
FIN 320Investments3
MATH 166Calculus II4
MATH 207Matrices and Linear Algebra3
MATH 265Calculus III4
PHIL 230Moral Theory and Practice3
STAT 326Introduction to Business Statistics II3

Professional Program – Business Core: (27)

ACCT 285Managerial Accounting #3
ENTSP 310Entrepreneurship and Innovation3
FIN 301Principles of Finance3
MGMT 371Organizational Behavior3
MGMT 372Responsible Management and Leadership in Business3
MIS 301Management Information Systems3
MKT 340Principles of Marketing3
SCM 301Supply Chain Management3
Above courses are prerequisites and must be taken prior to:
MGMT 478Strategic Management3

Major – Actuarial Science: (29)**

MATH 240Mathematics of Investment and Credit3
STAT 341Introduction to the Theory of Probability and Statistics I4
STAT 342Introduction to the Theory of Probability and Statistics II4
FIN 424Financial Futures and Options3
ACSCI 401Loss Models I3
ACSCI 402Credibility Theory3
FIN 464Risk Management Derivatives3
MATH 441Life Contingencies I3
MATH 442Life Contingencies II3

**Part of the IFM actuarial exam includes material covered in FIN 310 Corporate Finance. Thus, FIN 310 remains highly recommended as an elective, and should be taken sooner rather than later.

NOTE: Actuarial Science majors must take STAT 326 Introduction to Business Statistics II as part of the supporting courses.

Actuarial Science, B.S.

Sample 4-Year Plan (Your plan may differ)

Freshman
FallCreditsSpringCredits
BUSAD 102 or 1031ACCT 284*3
ECON 101*3ECON 102*3
COM S 1133MATH 1664
ENGL 1503STAT 2263
MATH 1654BUSAD 2031
PHIL 2303HUM/SOC SCI3
 17 17
Sophomore
FallCreditsSpringCredits
ACCT 2853Business Core Course3
STAT 3263FIN 3203
MATH 2654STAT 3414
MATH 2403ENGL 2503
FIN 301*3Global/International Perspective@3
(Students should take FM exam during winter break) LIB 1601
 (Students should take P exam summer after sophomore year) 
 16 17
Junior
FallCreditsSpringCredits
FIN 4243FIN 4643
ACSCI 4013ACSCI 4023
SP CM 2123STAT 342*4
Business Core Course3Business Core Course3
MATH 2073US Diversity#3
Natural Science3(Students should take IFM (or STAM) exam summer after junior year) 
 18 16
Senior
FallCreditsSpringCredits
MATH 4413MATH 4423
Business Core Courses9Global/International Perspective@3
ENGL 3023ACCT 2153
(Students should take STAM (or IFM) exam during winter break) MGMT 478**3
 HUM/SOC SCI3
 (Students should take LTAM exam) 
 15 15
Total Credits: 131

Total Credits = 131 if US Diversity and Human/Social Sciences are dual assigned.

Students must be admitted to the professional program in business to major in actuarial science. The requirements to enter the professional program are:

1.  Completion of at least 30 credits, all Foundation Courses, ENGL 150, and all ENGL 101/99 courses if required.

2.  A minimum GPA of 2.50 either cumulative or in the Foundation Courses.  Early admission is allowed for Honors-eligible students. (See your advisor for specific information.)

Graduation Requirements:

        1.  Grade of “C” or higher in at least 30 credits of Core and Major courses.

        2.  42 credits of 300+ level courses from a four-year institution.

        3.  50% of required Business courses must be earned at ISU.

        4.  At least 32 credits and the LAST 32 credits must be earned at ISU (exceptions for study abroad and internship may be requested).

        5.  131 Credits minimum and a Cumulative GPA of at least 2.00 with no quality point deficiencies.

        6.  A grade of C or better in ENGL 250 required, and also in one other required ENGL course.

        7.  A grade of C- or better in MATH 166 and MATH 265 required.

        8.  All 300-level and higher business credits must be earned at a four-year college.

        9.  Multiple business majors must have at least 15 distinct credits in each of the major requirements; when applicable, one course can be shared between business majors; see your advisor regarding multiple business degree requirements.

Undergraduate Certificate

For the undergraduate certificate in actuarial science.

Purpose

The College of Liberal Arts and Sciences offers a certificate in Actuarial Science.  The certificate provides students with a major in mathematics, statistics, or other STEM disciplines (or who hold a baccalaureate degree from an accredited institution) with the necessary background in mathematics, statistics, and the basic principles of finance for a career in actuarial science while obtaining advanced technical and analytical skills in their chosen major. Students completing the certificate will have the background to pass 4 of the preliminary exams in the profession, will have obtained the specialized knowledge required for success in the field, and will be prepared to work for and with businesses with a financial focus, such as insurance, banking, and investments.

Learning Outcomes

After completing the certificate in actuarial science, students will:

  • master the quantitative and analytical skills required to obtain an entry-level position in the profession,
  • have sufficient background to pass the first 3 or 4 professional exams offered by the professional actuarial organizations,
  • apply actuarial mathematics to problems in finance, investment, and risk analysis, and
  • demonstrate the ability to communicate the results of quantitative analysis, both in writing and orally.

Requirements

The certificate in actuarial science requires the completion of 7 courses, totaling 23 credit hours.

These courses are:

FIN 320Investments3
FIN 424Financial Futures and Options3
MATH 240Mathematics of Investment and Credit3
MATH 441Life Contingencies I3
MATH 442Life Contingencies II3
STAT 341Introduction to the Theory of Probability and Statistics I4
STAT 342Introduction to the Theory of Probability and Statistics II4

The seven courses in the list above require 9 prerequisite courses. These courses are: ACCT 284, ECON 101, FIN 301, MATH 165, MATH 166, MATH 265, MATH 207 or 317, STAT 226 (or another introductory statistics course: STAT 101, 104, 105, 201, 231, 305, 322 or 330), and STAT 326 (or STAT 301).

In order to be admitted to the certificate program, students must complete ACCT 284, ECON 101, MATH 165, MATH 166, and STAT 226 (or another introductory statistics course) with a cumulative GPA of at least 2.5.

At least 9 credits used for the certificate cannot be used to meet any other department, college or university requirement for the baccalaureate degree except to satisfy the total credit requirement for graduation and to meet credit requirements in courses numbered 300 or above.

Courses for the certificate cannot be taken on a pass/not-pass basis.

A cumulative GPA of at least 2.0 is required in the seven courses for the certificate.

Expand all courses

Courses

Courses primarily for undergraduates:

(3-0) Cr. 3.

Prereq: STAT 341
Probability distributions used to model uncertain events in actuarial practice. Aggregate models, evaluating the effect of various coverage modifications such a deductibles and limits. Construction of empirical models, calculations of common risk measures, and calculations of commonly used severity and frequency models. Various methods for estimating distributional parameters and their properties.

(3-0) Cr. 3.

Prereq: ACSCI 401
Bayesian estimation, including conjugate priors, posterior distributions, and the Poisson-gamma model. Credibility theory, including limited fluctuation credibility, applying Bayesian analysis for both discrete and continuous models, Buhlmann and Buhlmann-Straub models, and their relationship to Bayesian models. Simulating discrete and continuous random variables and the bootstrap method for estimating mean squared error.