With Institute and Faculty of Actuaries launching its new curriculum in 2019 (definitely, for the better), there is a lot of confusion among the students, in regards to what exactly will these changes be, what will be their impact on the actuarial profession, will the new curriculum be easier or difficult, what will be IAI's course of action and how to turn this transition into an opportunity. So, let’s address these issues systematically:
1. Important Highlights of Curriculum 2019:
a.) The number of subjects have been reduced at the initial level: Instead of the CT series with nine subjects, the new curriculum has the Core Principles (CP) Series, which has three modules, namely: Actuarial Statistics (CS) with two subjects, Actuarial Mathematics (CM) with two subjects, and Business (CB) with three subjects, so, that totals up to 7 subjects only.
b.) Computer based exams have been introduced: In both subjects of CS and the CM modules, you’ll have to take two exams; three hour written exam and a one and half hour computer based exam; involving the application of the concepts taught, on a computer using R (a statistical programming language).
c.) Introduction of Machine learning: In the CS2 exam, concepts of machine learning have been introduced for 10% of the exam weightage.
d.) A few obsolete topics have been deleted and a few topics which are currently included in the ST series, such as: copulas, extreme value theory, and the models for forecasting mortality, have been brought down to the Core Practices level.
e.) CT9- which is currently a practical exam, has been replaced by a three-hour written exam CB3included in the Business module, at the Core Practices level.
f.) CA2 – which is currently a practical exam has been replaced by two three-hour computer based exams; under subject 'Modelling Practices' (Core Practices 2)
g.) At the fellowship level, the Finance and Investment exams: SA5 and SA6 have been merged into a single subject: SA7: Investment& Finance.
2. Impact of Curriculum 2019 on Actuarial Profession in India:
In the current scenario, as the actuarial job market has become really saturated with freshers, companies and employers are facing this particular problem that: even though freshers have sufficient number of Actuarial exam passed (even 7-8 in some cases), they lack the ability to apply the concepts that they have learnt. Realizing that the ability to “apply the acquired knowledge on a computer” is one of the most important and sought-after trait, IFoA has introduced computer-based exams in both Core Principles and Core Practices series. This should increase the employability of freshers in both traditional roles in Insurance and Employee benefits and non-traditional roles in- Data analytics, Finance, Investment and ERM. This might even lead to employers preferring IFoA students over IAI students, till IAI doesn’t change its curriculum in a similar fashion.
3. IAI's course of Action:
The institute of Actuaries of India (IAI) has made no official announcement on its course of action as to, if and when such changes will be adopted into its curriculum. When I tried to contact a senior official from IAI, I was told and I quote "IAI is aware and is in its active consideration". So, all I can tell you for now, is that IAI might consider switching to the new curriculum in the foreseeable future as well, but it should not be anytime soon, because, 2018 is almost here and no announcements have been made yet.
4. Will the new curriculum be easier or difficult?
Well, IFoA says "Students beginning their studies under the new curriculum will not be subject to an increase in the number of study or examination hours from the current system. The curriculum has been developed so that the length of time it should take the average student to qualify will not increase.". But my take on this is a bit different: Since in the exams which are being combined, for the same "100" marks you'll have to study the content of both the exams, the load would definitely increase. Also, you'll have to equip yourself with the software applications of the content studied, which is an extra burden, but I think it would be worth doing; because these skills will make you a better and a more competitive professional.
5. Exemptions and how IAI's stance can be used as an advantage:
The details of how all the exams under the old curriculum will be transferred to the new one are given at the following link
Click here
Click here
The real dilemma of the students is in regard to the following sets of exams which are being merged into one:
(i) CT1 & CT5: which become CM1
(ii) CT4 & CT6: which become CS2
Now, IFoA's guidelines say: "If an exam in the new curriculum has two applicable subjects in the current curriculum you will need to obtain passes or exemptions in both of these to be able to obtain a pass (by December, 2018) or exemption (by January, 2019) in the new subject. If you have a pass or exemption in only one of these applicable subjects by the time the deadlines have passed you will need to sit the new subject as a whole."
So, if you are able to pass only one exam from either of the pairs, it would be totally worthless, and you'll have to sit for it all over again. Oh no! 🙁
But, I have a way for you to get around this, and the way is 'IAI'. Since, we know IAI will keep its curriculum the same, for some time, even if you just pass one IFoA exam from the either of the pairs and are not able to pass the other, if you have IAI membership, you can simply transfer your passed exam to IAI by applying for an exemption with them and thus save your exam. Of course then you will have to appear for the other exam from IAI.
Perfect analysis....nice work
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