Catch the Wave I – SOA Curriculum Changes

The SOA recently indicated there would be changes to the SOA (ASA) exam structure sometime in 2018. This was confirmed in late June when the SOA Board announced the approval of the significant changes to the Associate of the SOA (ASA) curriculum. The changes won’t be effective until July 1, 2018. For details on how we’re adapting to the changes, check out Coach Kester’s blog post.

Here is an outline of the changes based on the SOA communication.

The total number of ASA components will be changed from 10 to 12.

Current structure: The 10 Components

  • 5 Preliminary exams (P, FM, MFE, MLC, C);
  • 3 VEE courses (Economics, Corporate Finance, Applied Statistics);
  • FAP
  • APC

New structure: The 12 Components

  • 7 Preliminary exams (P, FM, Investment and Financial Markets, Long-Term Actuarial Mathematics, Short-Term Actuarial Mathematics, Statistics for Risk Modeling (SRM) Exam, Predictive Analytics);
  • 3 VEE courses (Economics, Accounting and Finance, Mathematical Statistics);
  • FAP
  • APC

Summary of Each Component’s Changes

This chart below breaks down the relationship between current and new curriculum components:

SOA Curriculum Changes
SOA Curriculum Changes

 

Preliminary exams

Probability Exam

  • There are only minor changes in learning objectives.
  • It will continue to be assessed by CBT.

Financial Mathematics Exam

  • There are only minor changes in learning objectives.
  • It is similar to the revised FM exam starting in June 2017.
  • A few corporate finance topics pulled from the current Corporate Finance VEE requirement are added.
  • It will continue to be assessed by CBT.

Investment and Financial Markets Exam

  • This is a change from Exam MFE.
  • Remain the changes in revised MFE exam starting in July 2017.
  • Some corporate finance and portfolio theory topics not covered in other finance-related components are added.
  • It will continue to be assessed by CBT.

Long-Term Actuarial Mathematics Exam

  • This is the replacement for Exam MLC.
  • A few topics from current syllabus have been removed (e.g., yield curves and diversifiable risk)
  • Some estimation topics that are on currently on Exam C have been moved here.
  • Universal life coverage details will be moved to FAP.
  • A section on life and annuity products will be added.
  • It will continue to be a combination of multiple choice and written answer responses.

Short-Term Actuarial Mathematics Exam

  • This is the replacement for Exam C and it has the largest change.
  • The basic material on estimation has been moved to the Mathematical Statistics VEE subject.
  • Special material on life table estimation appears in the Long-Term Actuarial Mathematics exam.
  • Above topics are replaced with more product-oriented information relation to short-term insurance (e.g., health, property, and liability).
  • The basics of pricing and reserving will be added.
  • It will continue to be assessed by CBT.

Statistics for Risk Modeling (SRM) Exam

  • This is one of the two components on the new curriculum that is devoted to predictive and analytics education.
  • It provides the transition from mathematical statistics as presented in the Probability Exam and Mathematical Statistics VEE to predictive analytics and its applications.
  • It covers the regression and time series topics formerly in the Applied Statistics VEE subject.
  • The generalized linear model is added.
  • This exam will be CBT and will be a formal prerequisite for the Predictive Analytics Exam.

Predictive Analytics Exam

  • This is a completely new topic for the ASA curriculum.
  • Candidates will use computer packages to analyze data sets and then communicate their findings.
  • To achieve above, there are two elements are required. The first is an e-Learning module that will take the candidates through the modeling process allowing them the opportunity to work through case studies that will illustrate the various methods. The second is an assessment using a fully-functioning computer that will allow for the use of software and the ability to write a report.

VEE Requirements

Economics

  • No changes.

Accounting and Finance

  • Two changes with respect to the current Corporate Finance VEE requirement.
  • One is the addition of accounting, which will ensure candidates have an accounting background for their fellowship work.
  • The finance requirement will be somewhat lighter than the current VEE requirement.

Mathematical Statistics

  • To be better prepared for the more general predictive analytics, the full mathematical statistics has been added to the curriculum.  

FAP and APC

  • The basic structure of FAP will not change. The adjustment of a relatively small number of topics may occur as the rest of the curriculum is developed.
  • The structure of APC is not expected to change.

So what should you do in light of all these changes? The best strategy may be to work to get your ASA before these changes take effect July 1, 2018. If you can manage to complete your ASA by July 1, 2018, there may be no impact on your designation requirements. If you would like to read more details, you may also visit SOA website.

In my next blog post, I’ve included an Excel spreadsheet and detailed strategies designed to help you navigate the best path to becoming an ASA before the changes take place. Please feel free to post your ideas, suggestions or feedback. I will try my best to cover as much as I can.